While many online sellers fulfill and ship their own products, some of them outsource part of their fulfillment and shipping. You may not want to give up total control of the fulfillment and shipping process, but outsourcing some of it can help you save time. If you’re looking to outsource, here are some options:
Fulfillment by Amazon (FBA)
If you sell on Amazon, your own site, or through multiple channels, Amazon can fulfill and ship items for you. Through the Fulfillment by Amazon (FBA) program, you pay Amazon to keep your products in its warehouse, as well as fulfill and ship your orders from any selling channel. Once the order has shipped, Amazon will send you the tracking number and shipment status.
Most consumers and businesses are familiar with Amazon, so choosing them to fulfill some of your products is a comfortable option. In addition, there are no minimums for items to be shipped, and charges are “pay as you go”—you are billed for storage space and the orders fulfilled.
While it’s incredibly easy to use FBA with orders from Amazon (it’s basically a zero-touch system until you run out of inventory), using FBA with your orders from outside their selling platform is a bit more difficult. Luckily, if you use ShipStation, there are ways to make it as easy as clicking a button with all the same automation and customization perks that come from using a system like ours.
If you’re interested in learning more about Fulfillment by Amazon, you can do so here.
Other Fulfillment Centers
There are many other fulfillment centers that will also ship your products, even locally. They handle the process the same way as FBA: you ship your merchandise to the provider, and the company manages your inventory by picking, packing, and shipping each order as it is received.
When selecting an order fulfillment service, you’ll want to consider the following:
- Location: Order fulfillment warehouses are located throughout the country. While it may seem easier to select one close to your business location, it’s more important to choose a center closer to most of your customers, which will lessen shipping rates. Fulfillment centers located in the middle of the country will be able to ship to both the East and West coasts for similar rates.
- Turnaround Time: While you could literally get an order in and ship it in minutes, fulfillment centers probably won’t do that. Whatever their turnaround time policy is, make sure you can live with it.
- Shipping Choices: Every fulfillment center is different. Check to make sure the fulfillment service you select offers all the shipping options you currently offer your customers and ones that you may want to offer in the future.
- Size: As with all vendors, larger fulfillment houses will be able to meet your growing needs, but you may be a small fish in a big pond. Choose one that isn’t too small to grow with you, but isn’t too large that you’ll get lost in the shuffle.
- Costs: Each fulfillment house will have a different fee schedule. Some use sliding scales and require contracts while others charge per order or per item with no contracts. You will also be charged a base fee to store your inventory at the warehouse and an additional fee per pallet or per item.
There are several fulfillment houses that are well-known in the eCommerce space, such as Webgistix.
Dropshipping has gained popularity in recent years, since it gives you the ability to sell a product while having it be shipped directly from the manufacturer or wholesaler to your customer’s doorstep. The benefit to you is that you get a cut of the profits, while alleviating the need to stock, package, and ship. Dropshipping is also less risky than self-fulfillment because you aren’t buying the inventory, having to worry about keeping it safe/dry/climate-controlled, or any other other concerns when it comes to warehousing inventory.
Of course, there are also some issues to be aware of with dropshipping. First, with low risk comes low reward; the margins for dropshipped products are lower because someone else is taking on the work. Dropshipping items also tends to be popular, and so the products may be sold on many different sites. Competitively pricing your products may become more of a concern as their prevalence in the market increases. Finally, you need to make sure that your dropshipper’s fulfillment and shipping practices are up to your standards; after all, it’s your business’s name on the package.
If dropshipping seems to be a good way to reduce your self-fulfillment needs, here are some things to consider:
- Dropshipping items you’re not sure will sell, especially if it’s a new type of product or category that you’re selling, will help ease you into determining whether it’s a good product to sell without requiring a lot of start-up capital.
- Dropshipping high volume or high margin products can help keep down inventory management needs in your physical location.
- Always research who you’re going to dropship with, and make sure they are a reputable company. This article from eCommHub offers tips on finding reliable suppliers for dropshipping.
ShipStation supports the dropshipping process in a number of ways, including setting up dropshippers as a user in the system and then assigning those users the orders they specifically need to ship. You can learn more about ShipStation dropshipping options here.
Periodically reviewing your fulfillment and shipping processes should be a normal part of running your business. If you’re finding yourself bogged down with too many SKUs, not enough storage space, or simply not enough time to get it all out the door in time, you may want to try outsourcing some of your fulfillment.