A comprehensive guide to order fulfillment services

August 11, 2020 by Amware Fulfillment

If you’re looking for a provider of order fulfillment services for your eCommerce operation, the search can seem a bit daunting – especially if you’ve been going it alone up to this point. Numerous providers have different capabilities and offerings, and it can be difficult to know which company’s services will best align with your business needs. In this article, we take a close look at the services fulfillment companies (e.g., third-party logistics companies) provide and explain what each mean to your business.

Pick and pack services

order fulfillment servicesThe starting point in your search for a fulfillment services provider begins with the picking and packing of orders. “Pick and pack” is the core eCommerce function – one which every provider you encounter will offer. It works like this: a warehouse associate ‘picks’ an order out of inventory and then brings it to a station where the order is packaged (or ‘packed’) and a shipping label is affixed. While the process seems very straightforward, pick and pack can run the gamut from totally manual to fully automated.

Efficient pick and pack operations have – at their foundation – robust warehouse management systems (WMS) that can guide the picking and packing processes to reduce the time associates spend traveling between products and improve accuracy. Efficient operations can also use WMS systems to take advantage of sophisticated picking strategies such as voice picking and pick-to-light to increase speed and improve accuracy even further.

Greater pick and pack efficiency can also be gained from use of lower-cost automation like auto-taping machines, box erectors, and bagging machines. By partnering with a fulfillment provider that has invested in warehouse technology as described above, your operation can enjoy lower costs as well as greater order processing speed and accuracy.

Additional order fulfillment services in a 3PL warehouse

order-fulfillment-services-chart

In addition to pick and pack, the following services may be offered by certain 3PL providers and can have a profound impact on the efficiency of your operations.

Parcel management services. When you go the DIY route, your parcel rates will be based solely on your volume. This means that, unless you’re shipping very significant volumes by yourself, you’re not going to receive much of a parcel rate discount.

When you partner with a 3PL, your provider can offer parcel management services. With these services, the 3PL will – on your behalf – manage relationships with parcel carriers and negotiate shipping rates.

Importantly, your 3PL can negotiate rates based on the aggregate volumes of all its customers (not just your operation) and receive discounted rates which it can pass on to you. Furthermore, if your 3PL provider has multiple fulfillment centers across the country, you can allocate your inventory across this network to keep product close to your customers, additionally reducing parcel rates and decreasing transit time.

Download the Free eBook, Fulfillment for Dummies, A Crash Course in Fulfillment  Operations

 

Packaging services. Many companies want to ship items in packaging that reflects the uniqueness of their brands and creates memorable experiences for their customers. For such companies, customizable packaging – where everything from the outer box to the dunnage inside can reflect the brand – is a key service need.

Such customization is not always offered by fulfillment providers. When you utilize a mega fulfillment service like Fulfillment by Amazon (FBA), for instance, you’re largely playing by their rules. This extends to the packaging: it’s Amazon’s branding, not yours. When you partner with a 3PL that collaborates, you can customize your packaging while ensuring that it also delivers in the quality and cost departments.

Similar to parcel, your 3PL provider will have multiple customers and can purchase packaging materials in bulk and pass the savings onto you.

Seller Fulfilled Prime (SFP) services. Speaking of Fulfillment by Amazon, just because the FBA service may not be a good fit for your operation, that doesn’t mean that you’re left out in the cold when it comes to being a Prime seller on Amazon. You can still attain Prime status and your 3PL can help. How? Through Amazon’s Seller Fulfilled Prime program.

Through this program, you enjoy Prime status as your 3PL fulfills orders in accordance with Amazon requirements. This gives you the best of both worlds: Prime status and fast shipping along with the ability to customize your fulfillment operation and pay lower rates with a 3PL than you would with FBA.

Kitting services. Warehouse kitting is the process of taking multiple SKUs and combining them in a package (or a “kit”) to create one new product. Kitting projects such as those common with subscription box fulfillment can result in high order accuracy and improved cost efficiency. Mass assembly of the same kits at the same time by the same people eliminates room for error and reduces labor costs associated with multiple waves of staffing.

You want a 3PL partner with a WMS that can handle the creation of the new SKUs and manage the inventory accordingly, while also having the labor resources to scale up for your kitting projects as needed.

Returns management. Returns can be a necessary component of any fulfillment operation. Many 3PLs can handle the entire returns process for you: processing returned orders based on your rules for each product and getting product back into inventory quickly (if applicable). Your 3PL can also issue credits directly to customers once orders are received and provide you with detailed reporting that covers every aspect of the operation.

Getting started with 3PL order fulfillment services

The more versatile and flexible your 3PL’s order fulfillment services are, the nimbler and more scalable your fulfillment operation can be. There are plenty of plug-and-play 3PLs that have a set system and will try to fit you into it. There are other 3PLs, however, that have the comprehensive service offerings and expertise to guide your operations and meet your business needs as you grow.

Amware Fulfillment resides in the latter category. To learn more about how our services may align with your fulfillment needs, contact us today.

FULFILLMENT FOR DUMMIES    A crash course for entrepreneurs and business leaders on the pitfalls and  opportunities within warehouse fulfillment operations Download our eBrochure

Filed Under: Fulfillment Services