If you run an ecommerce business, you know that inventory management and fulfilling orders can be time-consuming and complex. There are many moving parts, from receiving inventory to packaging and shipping orders. That’s where warehousing and fulfillment services come in.
These services provide a third-party solution for storing inventory, picking and packing orders, and shipping them to customers. In this blog post, we’ll discuss whether a warehousing and fulfillment service is right for your business.
How Warehousing and Fulfillment Works
Warehousing and fulfillment services are third-party logistics (3PL) providers that manage your products’ storage, packing, and shipping.
Once you’ve obtained or created your products and listed them for sale on your website or marketplace of choice, you’ll need a place to store them until customers order them.
That’s where warehouses come in. Warehouses are large storage facilities that are specifically designed to house inventory.
Fulfillment services take things one step further by storing your products in their warehouses and packing and shipping orders as they come in.
This can be a huge time-saver for ecommerce businesses, especially if you lack the capacity to fulfill orders yourself.
It’s also worth noting that fulfillment services often have established relationships with major carriers like UPS and FedEx, which means they can get preferential rates on shipping—something that can save you a considerable amount of money in the long run.
Warehousing vs. Fulfillment
Regarding managing inventory and shipping products, there are two main options: warehousing and fulfillment.
With a warehouse, companies can control their inventory and efficiently manage orders and deliveries. The high cost associated with buying or renting property can be a significant challenge for startups on a tight budget.
Storing large amounts of inventory often requires additional staffing and equipment that can be costly to maintain.
Fulfillment centers are often a more affordable option. These facilities typically operate on a subscription model, with several different tiers of pricing available that make them accessible to businesses of all sizes.
The streamlined order fulfillment process means that staffing requirements are generally minimal.
However, the lack of control over inventory can be an issue for some companies that must carefully plan for production or supply needs.
Fulfillment Center Costs
These are the most common costs associated with order fulfillment:
- Receiving: Costs to receive your inventory into their warehouse, usually based on the number of SKUs in your inventory.
- Inventory Storage Costs: Costs for storing until removing items from inventory, based on how much warehouse space your inventory occupies.
- Product Fulfillment Fees (also known as pick and pack fees): Fees to pick customer orders
- Packaging fees: Some companies may charge a custom packaging picking fee
- Kitting fees: Only charged if the company puts together kits/bundles for you
- Restocking/Returns Management fees: Charged when customers return items and they must go back into your inventory.
Compare these fees to help you decide which companies you prefer to work with.
Top 7 Warehousing and Fulfillment Solutions
ShipBob is a shipping and fulfillment company that strives to make ecommerce logistics simple and affordable. With cutting-edge technology and a stellar team of experts, ShipBob seamlessly handles everything from order processing to global shipping.
Whether you are just starting or are a seasoned ecommerce veteran, ShipBob has the tools and expertise you need to ensure smooth and efficient fulfillment. From streamlined onboarding to specialized customer support, ShipBob takes the hassle out of shipping.
- 23 US Warehouse locations
- Storage with climate control
- Multiple shipping carriers
- Affordable order fulfillment with no monthly minimums
Shopify Fulfillment Network
The Shopify Fulfillment Network is an exclusive option available to ecommerce companies that use the Shopify platform.
It is a powerful shipping and fulfillment tool that enables retailers to streamline their logistics processes and deliver high-quality customer experiences. This robust system is designed to handle large volumes of packages. It includes state-of-the-art warehouses and automated shipping systems, allowing businesses to efficiently manage their inventory, calculate shipping costs, and fulfill orders at optimal speeds.
- Network of fulfillment centers across North America with international shipping options
- It can accommodate small businesses with as few as ten orders per day and high-volume online stores of up to 10,000 orders per day.
- Affordable Two-Day Shipping
- Multiple shipping carriers
Fulfillment by Amazon (FBA)
Fulfillment by FBA, or FBA for short, is a service offered by Amazon that makes it easy and efficient to sell products online.
With this service, retailers can hand the entire process over to Amazon, allowing them to focus on growing their business and increasing sales. In addition to having access to a network of warehouses staffed by highly trained employees, retailers using FBA gain access to millions of Amazon customers worldwide.
All customer inquiries about orders are directed to Amazon’s customer service team. So, retailers using FBA have extra time and resources to focus on marketing and product development. Overall, if you’re looking for a simple and effective way to expand your business online, FBA is an excellent choice.
- Amazon Prime Two-Day Shipping with shipping guarantees
- Amazon handles picking, packing, customer support, and returns for you
- Uses UPS and Amazon Logistics Services for delivery
Red Stag Fulfillment
Red Stag Fulfillment is a leading provider of order fulfillment services and third-party logistics solutions. Founded in 1996, our company has been helping businesses throughout the world streamline their operations, reduce costs, and increase profitability.
Services include everything from warehousing and assembly to handling distribution and transportation. With cutting-edge technology and experienced staff, Red Stag provides comprehensive logistics solutions for even the most difficult fulfillment situations.
- Video monitoring
- Great for heavier/bulkier products
- Same-day shipping available
- 2 US-based fulfillment locations
- 200 orders/month minimum
Ryder E-Commerce by Whiplash
Ryder E-Commerce by Whiplash is an ecommerce fulfillment company based in California. It’s an ideal option for growing businesses with at least 500 monthly orders. Automation rules and lot control make it easy to route packages in the best way for your business.
- 24 U.S.-based fulfillment locations and two international warehouse locations
- Support for dropshipping and wholesale fulfillment
- 2-day shipping for quick deliveries
- Bundling and kitting services are available
- Fulfillment software allows for live order editing
Rakuten Super Logistics
Rakuten Super Logistics is a leading provider of ecommerce fulfillment services and logistics solutions. With a network of warehouses around the country, RSL can handle any volume and meet a wide range of shipping needs. Whether you need to ship individual orders or large pallets, their fulfillment processes can do the job.
- 15 U.S.-based fulfillment locations
- 1-day fulfillment
- 2-day shipping
- Flawless or free guarantee
FedEx Fulfillment is a service from the popular, trusted shipping company that offers warehousing and fulfillment services. It’s best for businesses that can accommodate a 400 monthly order minimum.
- 130+ U.S.-based fulfillment locations
- One international fulfillment location
- 2-day shipping for quick deliveries
- Support for subscription box services (kitting)
- Allows you to use custom packaging
Tips for Choosing the Right Warehousing and Fulfillment Service
Regardless of your B2C fulfillment scale, you need a partner that works well for your business. It’s easy to get quotes from multiple companies and go with the cheapest available fulfillment provider, but that’s not the best way to decide.
To help you, we’ve included these tips for choosing your ecommerce fulfillment solution.
Pay Attention to Industry Experience
Not all fulfillment companies are created equal. Some are better suited to ecommerce than others. It’s best if you work with a fulfillment facility that specializes in the products you offer.
Ask about their experience in your industry, and don’t be afraid to get references from other business owners they’ve worked with. Ask for examples of products they have experience storing, packaging, and shipping.
Go Beyond Price and Storage Fees
Yes, pricing matters, especially if you’re on a budget, but you can’t just go with cost savings alone. Do they offer a variety of shipping methods? Do they have contracts with multiple shipping services so you can get the most affordable shipping rates? Do they offer affordable 2-day shipping?
Consider whether there is an additional charge for fragile items, long-term storage, etc. Does the company lock you in with long-term contracts? What kind of turnaround time do they promise?
Geographic location also matters since you want a partner with distribution centers near where your customers are. This helps keep your shipping rates low and speeds up the delivery time. Sometimes, it’s more cost-effective to go with someone with higher fulfillment costs simply because they can deliver your ecommerce orders faster.
What additional services do they offer? Can custom packaging and inserts be used to provide a unique unboxing experience? If so, is there a custom packaging fulfillment fee? What about gift services?
Can they handle same-day fulfillment? What about international shipping? If you require international shipments, it doesn’t make sense to partner with someone who lacks international fulfillment centers.
What is their overall approach to fulfillment? Do they use outsourced fulfillment or offer in-house fulfillment operations?
What warehouse management technology does the fulfillment company use? Do they have the means to integrate with your ecommerce platform or shopping cart? What about other online marketplaces you use to reach potential customers? Can you manage all your orders from a central dashboard?
If your fulfillment partner doesn’t have integrations with your software, you can’t automate your order fulfillment. You’d be left having to do a CSV upload of orders every day, send an email, or make a phone call. This is time-consuming, even if you have limited product offerings or a low order volume.
What kind of data analytics does the company offer? Does the information update in real time?
Using data, you can make better decisions about inventory, preventing you from having excess inventory costing you money.
Getting Started with Warehouse Fulfillment Services
The bottom line is an ecommerce business needs a good warehousing and fulfillment service to run smoothly. When choosing the right one for your company, it is crucial to consider factors such as industry experience, available technology, data analytics, and pricing.
By taking these things into account, you will be able to find a warehousing and fulfillment service that best meets the needs of your ecommerce business and your fulfillment strategy.
You can take your business to another level using any of the seven options above.