Is Fulfillment Right for My E-Biz ?
3 Questions to Ask Yourself Before Outsourcing Your Fulfillment
FEATURED COMMENTARY
By Chris Malta Home EBiz Product Sourcing Expert
There are any number of reasons an
online seller might contemplate using a fulfillment center to handle their
warehousing and inventory control. Fulfillment centers provide a
tremendous service in receiving, storing, and shipping out a seller’s
products to their customers. They’ve allowed many e-tailers to reclaim
their time and regain control over their businesses but that doesn’t
mean they’re right for every online store and every situation.
Evaluate Your Options To help you determine whether or not fulfillment is
a good fit for your E-Biz, Joe Walowski, senior project manager for
AmazonServices.com/fulfillment, recommends asking yourself a few questions
about your business:
1. What is my order volume? Most fulfillment firms have minimum monthly
retainer fees. If your order volume is fairly small, then you may find
that some of the fixed costs of using a fulfillment service aren’t
justified for you.
Tip: One notable exception is iBagit.com, a fulfillment service that
caters to small and medium sized businesses, and poses no minimum pricing
or inventory.
2. Where do I want to be spending my time? Think about where you spend the
majority of time in your business operations. Your warehousing and
shipping tasks may be a nominal part of your routine, and not something
that, at present, you need to worry about outsourcing.
On the other hand, simple logistics may be consuming far too much of your
time. If you’re at a place where you have no time to generate new sales
leads and even if you did, you simply couldn’t handle any more sales
orders then a fulfillment solution may be exactly what you need. States
Walowski, Your time should be used on the activities that help you grow
your business and increase your profits not on back-end functions.
3. Do my sales offerings lend themselves to outsourcing? Not every product
is suited for fulfillment. Highly customized products (monogrammed shirts,
for example) need additional work to get them ready for the end user, and
that’s not the kind of service a fulfillment firm provides.
However, that doesn’t mean a firm will only accept ready-to-ship items.
Many offer preparation and kitting, although they’ll charge extra for
those services. Preparation refers to assembling or preparing items that
arrive from the supplier in a dissembled or unready state; and kitting
means gathering separate items, and sending them out as a single product
bundle. Look at the products you sell, and ask yourself if the actions
required to get them in ship-shape can be easily outsourced.
The Customer Component Besides storing and shipping your products, most
fulfillment centers can also take over your customer service duties. If
you decide to utilize the services of a fulfillment center, you then need
to decide if you want to maintain control over your customer interactions.
You may prefer to keep that personal level of contact. But if you’re
spending too much time answering emails, or customer service just isn’t
your strong point, then you’ll want to explore your options in this area.
Two things to consider are the how much those options will cost you, and
whether you’re comfortable with the customer service your firm provides.
Fulfillment centers deliver time and cost savings, but there’s a price tag
involved. Advises Walowski, Fulfillment is a very real opportunity cost.
You have to look at the trade off and what you’re gaining, and determine
if that’s the best course for your business.
