Fulfillment as a Service and Software as a Service: Similar Advantages

May 9, 2023 by Amware Fulfillment

Fulfillment as a Service is essentially outsourcing the order fulfillment function to an expert service provider. A recent Amware survey of mid-sized, direct-to-consumer brands (done together with Digital Commerce 360 ) found that about 50% of these brands outsource order fulfillment. Compare that with company usage of the Software as a Service (SaaS) model where, as reported by Zippia, 70% of total company software use is SaaS and 99% of U.S. companies use at least one SaaS solution.

Fulfillment as a service Businesses love the SaaS model, and for good reason. But if you look at the advantages of SaaS that drive near universal usage, you’ll see many of those same advantages in a Fulfillment as a Service model. Let’s take a closer look.


SaaS Advantages

Fulfillment as a Service

Lower costs

Many studies have clearly demonstrated that SaaS solutions costs less than on-premise when you consider the total cost of ownership (software costs plus hardware, network, back-up, security, and development/help desk resources).

We estimate companies that manage their own fulfillment could reduce their costs 10–20% through a Fulfillment as a Service outsourced model. Savings are driven primarily by:

  • Sharing warehouse, systems and equipment costs with many other brands in a multi-client 3PL warehouse
  • More efficient processes, sometimes aided by warehouse automation
  • More efficient deployment of labor to economically manage order volume fluctuations
  • Sharing the lower parcel rates enjoyed by the 3PL’s existing customers, who leverage the 3PL’s aggregate buying power to secure lower parcel rates


Predictable costs

One set subscription fee paid on a regular schedule.


Same with Fulfillment as a Service. A transactional rate is established to handle an order and this rate will apply regardless of how much order volume fluctuates.


There is no need to buy more software and server power.

This advantage certainly can apply to Fulfillment as a Service, but it will depend on the provider. A truly scalable partner will have a national fulfillment network that allows brands to change and grow locations, as needed. And they’ll offer a level of automation capable of ramping throughput to support brands in a hypergrowth mode. Check out our eBook on Flexible Fulfillment.


Improve cash flow

No large upfront costs.

Same with Fulfillment as a Service. Costs for automation, equipment, software, etc are built into the transactional rate. In this way, your costs parallel your order volume and revenue stream.

Low installation costs

Pay your money and you gain immediate access to the platform.

This gets a little trickier when you outsource fulfillment. There is certainly a cost to relocate inventory to the provider’s warehouse/s. But once that is done the right provider will have many of the other key prerequisites in place, like integrations with popular shopping carts to process online orders, integrations with large retailers for B2B sales, in-place systems and automation to operate efficient pick & pack processes, and the trained labor to do the work.

Easy to use and test

Can you say “free trial.”

Not so with logistics outsourcing. There are no two-week free trials. That’s why sales cycles are longer for outsourcing contracts, and should be. Brands want to make sure they are making the right choice.

Access the software anytime, from anywhere

This advantage was really brought home during COVID.

There’s a similar advantage with Fulfillment as a Service. Obviously, inventory can’t be stored in the cloud. But the data can be, and a fulfillment provider should allow you to easily access real-time data on your inventory and orders through a web portal.

Easy, automated back up

Part of the service.



That’s part of the service with logistics outsourcing. For instance, all Amware systems data is backed up on the hour using the latest technology, with disaster recovery servers in place for our primary database and API/Web Service & web gateways.

Data security

Part of the service.

Fulfillment providers service many customers with critical data requirements. As such, data security protocols tend to be very robust and often superior to brands that manage their own fulfillment.

Guaranteed uptime

Many of today's leading SaaS vendors offer 99.5% to 99.9% uptime -- with some caveats around scheduled maintenance.


With Fulfillment as a Service, always-on fulfillment is possible, but it will depend. If you operate out of a single warehouse, an unexpected weather event or other disaster can halt order shipments for a time. However, 3PLs with a nationwide network of facilities can place your inventory in more than one location. When a problem happens at one facility, orders route seamlessly to another facility for fulfillment. See our article on the risks of having a single DC.



Customization is not a strong suit of SaaS

One compelling advantage Fulfillment as a Service has that SaaS can’t replicate is customization and the ability to respond to unexpected requirements. SaaS products deliver defined functionality. If you need something more, you’ll have to see if and when those features will be added.

In contrast, the ability to change and customize on the fly is a fulfillment provider’s superpower.

Here’s an example. An Amware customer’s 5-minute segment on Good Morning America resulted in an order spike 16 times the brand’s usual daily order volume. Amware’s operations team temporarily adjusted processes and staffing to handle the spike seamlessly, creating lots of happy new customers.

Not only can fulfillment 3PLs adapt to changing order volumes, the right partner can customize any and every aspect of your fulfillment program – from system integration to level of automation to how your eCommerce orders are packed.

The customization advantage is not a given across 3PLs. The largest providers, like Fulfillment By Amazon, seek efficiency through uniformity with an “our way or no way” model. But if a more personalized, customized fulfillment experience is important to you, you can get it from most fulfillment partners.


Will there be sharper growth in fulfillment outsourcing?

The last 10–20 years have seen a radical shift from on-premise to Software as a Service. Outsourced order fulfillment is also increasing in popularity – double-digit growth over the last several years – but the growth has not been as dramatic as with SaaS. When you examine the parallels between the two models and how Fulfillment as a Services drives many of the same powerful advantages as SaaS, it makes sense that fulfillment outsourcing could gain similar 70–80% penetration levels among B2C and omni-channel brands in the next few years.

To discuss whether Fulfillment as a Service is right for your brand, contact the fulfillment experts at Amware.


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Filed Under: Fulfillment Operations