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This article is part of our "Growing Your Business" section.
Full-service fulfillment companies offer up an end-to-end solution - They take your products from warehouse shelves, pack them, hand them to shippers and then send an automated e-mail response to your customers to let them know their packages are in transit. |
Order fulfillment companies
Order Fulfillment Company - a comapny that packs and ships orders for other companies. This is most often done in a transparent manner so your customer never knows someone besides yourself shipped the order. These companies are often called fulfillment houses.
Let's face it - packing and shipping orders is not the most fun in the world. The majority of dealers that we talk with find shipping to be one of the more time consuming aspects of running their own business. But, it's not just time that is wasted - if you're packing and shipping your own order you're business STOPS when you're away. Take a day off and nothing ships. Take a vacation and your customers will actually become angry as they wait for their order.
Building your business
By moving your order fulfillment to an outside company you free your time up for more important matters - building your business. I remember when I was shipping 10 to 40 breast pumps every day. The money was great, but I didn't have time to grow or expand the business. I had $3000 worth of nursing bras sitting in boxes for months because I couldn't find the time to add them to the website. Besides shipping the orders I had to maintain packing supplies, keep my UPS account paid up and clean up a huge mess in my house every day. For all Canadian orders and for some US exceptions I had to use the US Postal service which was much slower to process as I had to wait in a line.
It would have been so much better for me to use a fulfillment house like KD Mailing located only a few miles from my house as it turns out. Why better? Well, since I didn't have the time to expand the business I fell behind many of my online competitors. By the time the margin of profit in the breast pump market fell to it's current anemic levels my competition was offering 10 times the number of products that I was carrying. They had established a strong foothold in the market which left me playing catch-up.
Fulfillment is not the same as drop shipping.
When should you use an order fulfillment house?
Art Avery, principal consultant of Avery & Associates, an e-commerce distribution and logistics consulting firm in Coopers-burg, Pennsylvania, advises -- "When you need every penny, you should do it yourself, When you can earn more doing other things with your time, look outside." Basically, when you have more money than time or know you're losing money by taking time away from building your business - that is when you move to a fulfillment company.
Coming soon - How much does a fulfillment house cost or charge to ship my products?
Mailing lists - Expand your business one name at a time.
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