In this digital age, not everything is as virtual as you might think. Many companies and product owners still need to have a base to store goods and complete orders from. Every time a physical item is ordered through the internet, think about where it has come from and how it has reached the consumer. So many people work from home nowadays and run their own e-commerce sites, it’s not always feasible that their garage or back room can be used to store goods and they may not have the time or inclination to package and distribute everything that is purchased through their website.
So that’s where fulfillment services come in! Warehousing companies will store items in bulk until orders come in and they get the nod from the company owner to package up the item and send it out. Working in tandem, the company owner and the warehousing service team up to offer a complete package to a customer whereby orders are placed, processed and fulfilled, all to the satisfaction of the consumer.
Warehousing companies will offer a variety of different services, which range from the basic storage of goods through to full inventory control, picking, packing and even dispatch. Larger warehousing companies can negotiate good rates with international and national courier firms.
So what are the benefits of using a warehousing company?
Every company would like to be free to concentrate on the most important parts of their business, which is essentially getting customers through the door, whether it is actual or virtual. Sales and marketing play a huge role in establishing a successful business, whilst order fulfillment, whilst obviously important, is not the end point for any commercial enterprise.
By outsourcing warehousing and order fulfillment, a company is free to concentrate on their primary role whilst being sure that this secondary role is being completed in a professional and successful manner.
A fulfillment company is well placed to have better facilities than a small or medium sized company. They will often have thousands of square feet of storage space available and the equipment available to deal with any level and size of stock. And because the cost of the warehousing is spread between all users of the facility, it often makes this a cheaper option than a business renting their own storage space.
It can be tough to negotiate good rates with courier and dispatch companies, such as Fedex and DHL. If a company is small, with a minimum turnover of stock, then a courier will be reluctant to offer any discount since they are not particularly benefitting from a major increase in business. However, a warehousing company that may work for many clients will have a higher power of persuasion with couriers and may even be able to negotiate a flat rate, making the expense of shipping the goods a much easier burden to bear. In some case, offsetting the saving in shipping could negate the cost of employing a warehousing or fulfillment company.
The warehousing company will also be able to use their size to achieve discounts on packaging and shipping materials. Using the services of a warehousing company could help save up to 55% against buying all the packaging supplies separately.
Streamlining operations helps to save money
Bundled pricing on the entire fulfillment process can help a company to maximise their profits by staying on top of the fees that would be associated with each individual order. This means that costs do not need to get away from a small business where any slight increase in costs could impact on the profits. Sometimes placing “all your eggs in one basket” can be beneficial.