You’re exploring the retail market in the USA, and you’ve decided that you need an e-commerce fulfillment partner. There are many choices and you want to ensure you find the right fit for your business. To do that, you’ll first need to understand what the fulfillment part is and what they do.
What is a fulfillment partner?
A fulfillment partner is a company that assists your business manage the process of order fulfillment. It includes the steps taken in the delivery of products that have been ordered online. This process starts with receiving inventory and ends when the customer receives their parcel.
These organizations provide efficiency and expertise for your company, especially when venturing into large global markets like the US. They specialize in consistently providing excellent service for your customers.
These services typically accommodate both business-to-business (B2B) models or business-to-consumer (B2C) models.
What does a fulfillment partner do?
They provide solutions for companies that don’t have the resources to fulfill orders in-house. There is a varying degree of fulfillment services they offer and a product manufacturer may choose one that matches its needs.
Fulfillment partners provide warehouse storage, inventory management, and delivery services.
Integrated companies will provide sales and marketing strategies to aid in the transition to a new business model.
Whatever your needs might be, here are a few tips that might help you.
What to look out for when choosing a fulfillment partner?
To find the best fulfillment partner for your company, you need to know what you’re looking for. It might be overwhelming but it pays to take time to choose the right one.
Hiring a third-party logistics partner (3PL) should be cost-effective for your business and reduce overhead costs in the long run. You should take time to understand how the pricing model works as large monthly retainers could be costly if sales are low in a particular month.
You want to ensure that you are not substituting pocket-friendly with quality. You should get excellent service and technology at a price that is affordable to your business. The systems in place should add value to your company and improve your current fulfillment process.
Prices should be stated clearly when you agree to hire a company and you should be aware of what you will be paying for.
Transparent companies make prices publicly known so you can make comparisons. Ensure that your partner, the fulfillment company does not impose hidden charges as these can add up to be a significant amount.
2. E- Retail Partners
E- retail partners are companies that help sell your goods to end-users. A well-known retail partner, such as Amazon or Walmart, will give customers a confidence boost when purchasing your products.
When venturing into a new market, working with a company that collaborates with well-known retail partners is beneficial to grow sales and increase profits. Direct access to these large eCommerce brands is often difficult for new brands but can be made possible through the right partner.
Companies that offer sale strategies can evaluate your products to see how well they would do in the US market. They will then help decide which retailer would best suit your product and target market. They can also integrate your product into an online retailer’s website to market and promote them.
3. Location of Warehouses
Warehouses should be located close to your customer base. If your customer base is primarily in the west coast area in the US, you would ideally want to select a fulfillment center that is in that vicinity. Warehouse centers that are far from the customer base would increase the time of transport and also ground shipping costs.
Multiple warehouses would allow you to serve more customer bases at quicker rates and improve customer experience. Some fulfillment companies would also be able to connect you to Amazon fulfillment centers that are reputable and offer 24 hour turnaround times.
Choose a reputable fulfillment company to handle your customer experience. It could be tempting to go with the most budget-friendly option but ensuring the company is trustworthy would avoid tarnishing your brand name.
Experienced companies would be able to guarantee the service that they are offering. Speak to your potential companies about the clients they serve and the products that they ship. Identify key strengths and weaknesses of a company and look for similar clients for your business.
Does this company offer a market niche for your business? If you’re a furniture manufacturer, you would want to look for a partner that has experience in your specific product field. While small items are easy to transport, furniture requires more specialized care during storage and delivery.
Speak to the company to see how much they know about your product and the specialized care you require. Choosing the wrong company can hurt customer perception if products are delivered damaged. Each agency is best equipped to handle specific products.
5. Technology and order fulfillment software being used
Technology should be used to aid the order fulfillment process. Part of the benefits of outsourcing is gaining access to the technology available. Technology streamlines the process, increases efficiency, and reduces human error. Integrating systems together allows a seamless flow as the product moves through the stages.
Almost every step of the process has technology that goes hand-in-hand with it. A good company would be able to integrate your current system into its existing system. It would also be able to streamline inventory and order channels so you’ll be able to see the entire process clearly on one system.
Good systems would increase transparency and visibility in the supply chain process. There is software that manages reports and tracks invoices. Consolidating data empowers you to make more informed choices and adjustments to further increase efficiency and quickly detect problems.
6. Branding Options
In general, fulfillment companies ship out standardized products in standardized packaging. While they don’t brand their own companies, they also don’t brand yours. Working with companies that offer customized services can add a personal touch that makes it seem like packages came directly from you.
Disengaging and impersonal customer experience will not build brand loyalty. Making your packages stand out by using custom packing materials or adding notes to your item will engage with your customer and make your service memorable.
Check to see how your chosen fulfillment company could help you with that.
The main advantage of a fulfillment company is getting better shipping rates than you would have been able to manage yourself. These companies have large volumes of orders and have better leverage in negotiating lower prices. Be sure that you are getting a good deal with shipping prices.
Customers often abandon carts because of high delivery prices so having competitive rates will put you at an advantage.
Next, they are expecting their items to arrive quickly. Shipping speed needs to be quick and this becomes more likely when there are warehouses located close to the customer base or spread out within the country to target more areas.
8. Returns Management
Fulfillment companies should make returning products easily accessible to your customers. Being able to return items that are faulty provides them with an assurance that any issues will be resolved. Returned items need to undergo checks and re-entered into inventory.
It is quite a tedious process if the fulfillment companies does not handle returns and you will have to look into that yourself. Companies that also provide customer support could help reduce the number of returns by helping with any queries customers might have.
9. Flexibility and Scalable
As your business grows, you want to look for a fulfillment service that is able to grow with it.
How much flexibility does your current provider offer you?
Look for a company that is able to be adapt to changes in your volume and growth strategies.
It can be costly to change fulfillment partners when you’re gaining traction and growing. The company you choose should fulfill your future needs and provide the distribution solutions you need in the long term.
Having the flexibility to scale up, you can focus on growing your sales volume without worrying if your distributor can handle it.
10. Ability to integrate with your business
Most importantly, you want to choose a company that can integrate your business into its systems. While agencies offer a variety of shipping solutions, you have to ask yourself what your company needs. Your e-commerce fulfillment partner should also align with the vision of your business.
Note down your short-term and long-term goals for fulfillment before consulting a company. Then, see how they can help you with your plans and how they could offer practical solutions. Strategizing with experts in the industry will give you a competitive advantage when starting in the US market.
There are quite a few criterias to look out for when choosing your e-commerce fulfillment partner in the US. First, you want to know that you trust the right company for the job as it is potentially a long-term collaboration. Reputable companies usually offer a free consultation. Take your time to speak to them and carefully choose the right partner for your business.
The article is a part of our comprehensive series on “ Order Fulfillment Process in USA: Steps Involved”.