Why Should I Use a Fulfillment Center?Posted by Macdonald McGinnis on July 13th, 2021 Most traditional retail outlets use a fulfillment center to handle the packaging and shipping of products. Fulfillment center and fulfillment house are modern terms for a specialized packing warehouse. The terms have been coined around the mid-1990s, and typically "fulfillment center" is used about an out-of-house packing and shipping operation. Many ecommerce businesses begin with traditional methods of shipping and receiving customers, but as the business grows, more floor space is required for increased order volume. Managing a growing order volume requires additional man power. To meet growing order volumes, ecommerce businesses must increase their floor space in order to meet demand and make a profit. Increasing floor space is not always possible; in some cases it is impossible due to floor space restrictions inside of a typical store or warehouse. An online ecommerce business may benefit from using a fulfillment center to manage and warehouse excess inventory. As the number of online orders continue to increase, warehouses filled to capacity will not be able to keep up. If left unchecked, these warehouses will fill up and no longer serve their customers' needs. To meet growing demand, ecommerce businesses often turn to fulfillment center companies to help them with their order fulfillment. Fulfillment centers can store excess products that have been sold, or products that are still being produced, and then deliver the products to the customers that have ordered them. This helps reduce the cost of providing customers with extra products and makes fulfillment center employees more productive. A fulfillment center can be divided into many different departments, depending on its size. Multiple departments are often used within a warehouse to maximize space and efficiency. These departments include stockrooms, receiving areas, packing areas, unpacking areas, flooring, and many more. All of these departments are used for various products, but they also hold inventory. When an order is placed with a fulfillment center it is stored in a warehouse until it is ready to be shipped. The most common type of product that is stored in one large warehouse is perishable goods such as food products. Other types of goods, such as fabrics, are often held in smaller stores until they are ready to be shipped to the customer. In order to meet customer orders, an order must be filled quickly. A fulfillment warehouse must maintain a constant inventory of each item that it holds. This means that the warehouse will constantly monitor its inventory to make sure that none of the items are sold out before the customer receives them. A lot of time is spent physically maintaining inventories and towing merchandise back and forth between storage and shipping locations. This type of warehousing costs much more than other types of warehouse warehousing because the larger the volume of merchandise, the more it is costing the fulfillment center to maintain its stock levels. Because fulfillment companies own their merchandise, they have the right to store it or take it to another destination. If the order is not satisfied within a reasonable amount of time, the fulfillment center may re-store the product until it is ready for shipment. Depending on the nature of the product, sometimes it is not possible to re-store products without re-packing them and sending them again. This is where the importance of an online resource such as our website comes into play. By using an online resource, customers can find out when certain products are out of stock and they can order it there and then. The cost of storing inventory is one of the biggest concerns for many businesses. Fulfillment centers can offer stocking services and expedited shipping in order to help reduce the cost of maintaining an inventory. It is important, however, that customers realize that they will have to pay the fulfillment company for these services. Customers should know, however, that they may save money by taking care of this part of their inventory themselves. If they can ship orders in large quantities, they may be able to reduce the cost of their inventory by stocking larger quantities of a product than they would at a fulfillment center.Like it? Share it! More by this author |