We live in the age of fulfillment services, where e-commerce fulfillment, fulfillment centers, and Amazon fulfillment services run our lives—fulfillment drives revenue and people.
The truth is, satisfied customers receive what they order as quickly as possible. Amazon Fulfillment was what broke the mold of consumer expectation and set the standard for fulfillment centers, fulfillment services, and fulfillment operations worldwide.
Fulfillment services and fulfillment centers have become a focal point of the industry; services such as Shopify order fulfillment, Amazon order fulfillment, or Walmart order fulfillment dominate the industry. We’ve all used them at one point in our lives.
3PL fulfillment has been lauded as the savior of fulfillment centers and fulfillment services. It refers to outsourcing the logistics of your e-commerce operation to a third-party e-commerce fulfillment operation. This means trusting them with everything from warehousing (fulfillment centers) to inventory management and order fulfillment. In doing so, you have more time to work on your e-commerce fulfillment operation instead of in your e-commerce fulfillment operation, taking care of the logistics and fulfillment services giving you the time to work on your brand.
Common Myths About Partnering with 3PLs for eCommerce Fulfillment
Myth 1: Outsourcing to a 3PL is Expensive
3PL fulfillment may appear costly, and many small companies assumption that a 3PL fulfillment is out of budget, but 3PLs are a lot like life in that you need to put in the hard work (or investment, in this case) to reap the rewards down the line.
Many small companies bark at the prospect of additional outlay, and in doing so, they miss the bigger picture. They presume 3PL fulfillment centers and fulfillment services come with exorbitant price tags, but the reality is the opposite.
3PL fulfillment is often much cheaper than traditional fulfillment services and provides an invaluable benefit of scaling your operation the same way Amazon fulfillment scales.
Amazon fulfillment set a precedent; now, independent 3PL fulfillment centers and fulfillment services are the norm.
Myth 2: Fulfillment Centers are Only Good for Storage
Smaller companies considering 3PL fulfillment centers and fulfillment services for the first time are often shocked by the range of services offered by 3PL fulfillment.
As well as the apparent storage solutions 3PL centers offer, the fulfillment centers are equipped with the latest tech, be that a kitting and packaging; or inbound fulfillment services for manufacturing; a cross-docking facility; or a plethora of other fulfillment services.
Fulfillment centers are the beating heart of any e-commerce fulfillment operation, not just a place to dump product inventory–Amazon figured that out a long time ago, and the rest of the market followed.
Myth 3: Outsourcing Is Only An Option If You Have Enough Volume
Small e-commerce fulfillment operations are prone to fluctuations in sales, with seasonal promotions and demand often impacting order volume.
Think about this scenario:
- What if you based your operation around a fulfillment center where scaling your order fulfillment up or down didn’t require a change in fixed cost?
Imagine having a whole team working behind the scenes, taking care of your fulfillment services and operation, similar to Amazon FBA–think of the time saved for your business.
Myth 4: Your Company Will No Longer Belong to You
You’ve built your e-commerce fulfillment operation into a flourishing, profitable brand from the ground up. Now you need to scale, but you like to be in control. You want to know what’s going on in every area of your e-commerce fulfillment operation. You’ve worked too hard to simply hand over the keys to a 3PL fulfillment operation like Amazon fulfillment; your fulfillment services are yours alone.
3PL Fulfilment Service Offerings:
- Better supply chain visibility
- Real-time tracking
- Streamlined order fulfillment and processing
You’re not losing out when partnering with a 3PL. You’re gaining back time, energy and resources to better scale your e-commerce store to the next level!
What is E-commerce Order Fulfillment Services?
Think about your last online purchase; now think back to when what you ordered provided an unsatisfactory delivery experience. Maybe your package was late, lost or heavily damaged? Now ask yourself: would you buy from that seller again?
A possible strategy to use when building out your e-commerce order fulfillment pipeline:
- Figure out your volume. Get your SKUs in order. Prepare your inventory sheets.
- Understand which sales channels you want to use.
- Figure out where your customers live and minimize shipping zones to have your packages arrive sooner!
- If you’re shipping custom products, beware of how it is handled (you will have to pay extra for white-glove service)!
Customer loyalty is dependent on a whole host of factors, but the biggest and most important is order fulfillment; never forget!
Order Fulfillment Services
E-commerce fulfillment is an experience, and order fulfillment is the process from sale through to final delivery. Successful order fulfillment relies on many moving parts, from the online store to processing, picking, packing, and delivery. Everything needs to function.
Customers rarely give second chances.
You need to have an elite order fulfillment strategy and fulfillment service, but it’s not always easy to decide which option to opt for.
The Website Order Fulfillment Model
We agree that picking and packing the merchandise yourself is hardly the most thrilling aspect of running your e-commerce fulfillment operation. Add that to your tenth trip to UPS of the week on what is only Tuesday afternoon, and your e-commerce fulfillment dream begins to look more like an outtake from The Shining.
Order fulfillment is challenging and mundane, which is why fulfillment centers and fulfillment services exist. A fulfillment service can be the saving grace of your fulfillment operation, and 3PL fulfillment centers are better equipped to deal with orders through your store.
Your 3PL fulfillment partner pulls, packs and ships them to your customer directly, without you lifting a finger.
Websites such as Shopify aim to make fulfillment services as straightforward as possible, keeping logistics and expenses in one in-house operation, thus making it easy to oversee.
They aim to give you more time to run your e-commerce fulfillment operation, lower your staff costs, eliminate storage space, simplify accounting and help you be competitive in the shipping game.
Shopify Order Fulfillment also lets you set up your store to work with Amazon FBA!Note
How To Qualify For Shopify Order Fulfillment (SFN):
- Ensure your items are not on their list of prohibited items
- Properly prepare your products
- Ensure you have unique SKUs for each product
- A unique barcode
- A tariff code (if shipping internationally)
- Ensure all product variants have the setting ‘inventory managed’ set to ‘Shopify’
- Ensure that there is a Shopify Fulfillment Network warehouse nearby your area
When you decide to use SFN for your e-commerce fulfillment operation, you’re effectively streamlining order fulfillment to make it better for the consumer.
You’ll have to be approved to join the network, so check the requirements above!
Shopify Order Fulfillment stems from multiple fulfillment centers, so it’s easy to guarantee speedy order fulfillment to your customers alongside lower shipping costs. Shopify also keeps track of your inventory, promising 99.5% accuracy in real-time.
Shopify Order Fulfillment also lets you customize how your orders are sent, be that in branded packaging of your e-commerce fulfillment operation, with inserts and offers exclusively and personally from you. The consumer buys from your website directly, and Shopify keeps that personal touch intact.
Compare this to Amazon Fulfillment, which doesn’t allow personal branding or control over the process; everything is packed and shipped with its own Bezos branding from its 3PL fulfillment centers (boring!)
Of course, Shopify Order Fulfillment isn’t the only website order fulfillment service out there, with competitors such as the WooCommerce for Word Press, Wix, Shift4Shop, Big Commerce and many others competing to own a slice of the fulfillment operation and fulfillment service space in their own way.
The Marketplace Order Fulfillment Model
It’s widely believed that the basic principles of a Marketplace order fulfillment and fulfillment service are that they only handle the processing, packing and logistics of e-commerce fulfillment. However, this couldn’t be further from the truth.
The reality is that it’s a logistical journey from A-Z that starts the second you confirm your purchase from your favourite e-commerce platform.
Large teams will start working hard to pick, pack and ship high order volumes with little fuss, providing slick and streamlined fulfillment services to small e-commerce fulfillment operations (hopefully the same ones you order from). The companies invest in warehouses in strategic geographical locations to ensure that your products are delivered on time.
Like those of Amazon Fulfillment (FBA) or Walmart Fulfillment, marketplace fulfillment centers can be an excellent tool for sellers who want to expand quickly and nail order fulfillment far and wide with the least amount of stress. Although Walmart Order Fulfillment is set to rival Amazon FBA with its host of sellers and its extensive network of fulfillment centers–creating even more options for consumers to enjoy shopping from the luxury and comfort of their own homes.
Examples of other Marketplaces:
- Best Buy
All of these marketplaces help streamline the hassles of online selling, making their world-renowned reputation for fulfillment services and infrastructure of fulfillment centers available for many e-commerce shop owners, providing benefits such as speed of order fulfillment and ease of returns.
Retailers such as Best Buy have identified the potential in the Marketplace order fulfillment, offering in-store pick-up for third-party sellers, making it even easier to sell your products and get paid.
The unfortunate drawback is the saturation within the fulfillment space. This makes having your personalized order fulfillment customization strategy harder to stand out–giving way for consumers to potentially miss what you offer and opting in for the dominant industry player (Amazon FBA or Amazon FBM)
Order Management and Processing: The Backbone of Your E-commerce Fulfillment Operation
When the customer checks out, their order’s journey begins. Whoever stores your inventory has to select, seal and ship the correct product to the right place.
Order fulfillment may seem easy when sales trickle in slowly, but as they grow and channels expand and you start scaling, an order management system is a must for order fulfillment services.
What is Order Management?
Simply put, order management refers to the task of everything related to order fulfillment (impressive, we know.) The process begins the second a customer checks out and ends when they receive their goods. A streamlined e-commerce fulfillment operation for many store owners is critical for a healthy profit margin. If you don’t, you’ll likely end up overwhelmed by the scope of your e-commerce fulfillment operation.
What is an Order Management System?
Order management systems (OMS) provide you with one place to manage customer orders and can help automate the flow of sales.
A decent OMS can track order fulfillment information at every step of the retail supply chain and help execute the primary goal of e-commerce fulfillment–quick and satisfactory delivery times.
Amazon Fulfillment Services (and How they Can Help You)
Amazon fulfillment services are split into two categories of order fulfillment. Fulfilled by Amazon (FBA) and Fulfilled by Merchant (FBM).
Fulfilled by Amazon (FBA) is an Amazon fulfillment service that provides storage, sealing and shipping assistance to sellers on their platform–Amazon Fulfillment is a 3PL fulfillment service.
Sellers ship items to Amazon fulfillment centers and let Amazon Order Fulfillment manage the fulfillment services and fulfillment operations from that point on.
An Amazon fulfillment employee handles the order fulfillment when an item is sold, usually within the two-day ( Amazon Prime) shipping window.
Their fulfillment center takes the pressure off sellers and allows them more time to focus on their e-commerce fulfillment operation. Amazon FBA also handles customer support and returns.
Amazon Fulfillment can be a game-changer for many e-commerce fulfillment operations getting into the 3PL fulfillment game. Amazon fulfillment services are one of the leading lights in e-commerce fulfillment and have world-class infrastructure at their many fulfillment centers.
Fulfilled by Merchant (FBM) is the second category of Amazon Order Fulfillment. This is a much more hands-on approach for the seller, with fulfillment services, fulfillment operations, and e-commerce fulfillment coming directly from them. The seller manages everything related to order fulfillment services, from packing and shipping to delivery.
This can be useful for e-commerce fulfillment operations wanting more control over the fulfillment services of their e-commerce fulfillment operation. However, it lacks the extensive fulfillment center and swift order fulfillment of Amazon Fulfillment.
Optimizing Inventory Management with 3PL fulfillment
Ordering. Restocking. Forecasting. Rinse & Repeat.
Managing inventory is one of the most essential areas of e-commerce fulfillment. The larger your e-commerce fulfillment operation grows, the more critical it is to stay on top of your inventory.
Without strict inventory management, your e-commerce fulfillment is doomed.
Fulfillment services and fulfillment centers need to keep an accurate log of inventory for many reasons:
1. It keeps fulfillment flowing
Knowing stock levels is paramount to order fulfillment. Having enough of the right product will drive sales and contribute to a better fulfillment service for the consumer.
2. It saves money on storage
Stock takes space, and too much will cost money. Being smart about inventory will help save and benefit the customer with a quicker, more efficient order fulfillment.
3. It helps identify customer behaviour and trends
Knowing your inventory means knowing what sells. And knowing what sells means ordering more of that product, and having more of that product means more sales and more order fulfillment which leads to more sales!
Some Inventory Management Strategies that Work
Set Par Levels
Par levels mean the minimum quantity of a product you should have on hand to meet order fulfillment; it’s time to order more when inventory drops below that.
Doing so removes some of the anxiety of stock levels in your fulfillment center and helps keep your fulfillment service quick and efficient.
Sell the Old, Not the New
Commonly called “FIFO” (First in, first out), this inventory management principle essentially prioritizes the order fulfillment of the oldest stock first. This reduces the risk of your products going obsolete and keeps your product stock fresh and exciting.
This is more important for perishable goods, but it’s still an excellent principle for shelf-stable goods in any fulfillment operation.
3PL fulfillment centers usually take care of this fulfillment service for you, but if you’re running things in-house at your own fulfillment center, you’ll have to manually monitor it.
Audit, Audit, Audit
Auditing your inventory is key to running a successful e-commerce fulfillment operation. Keeping accurate stock levels means greater order fulfillment, and as we know, greater order fulfillment means a better fulfillment service and a more profitable e-commerce fulfillment operation.
Pick the Right Software
Picking the right inventory management software is akin to choosing the right partner. Get it wrong, and your life will be hell for however long you can stick it out, but get it right, and everything becomes easier overnight.
Inventory reports can help to identify trends and even offer suggestions for distribution. More streamlined distribution leads to better order fulfillment and superior fulfillment service.
Shipping: Price, Packing, Shipping, Returns & More
The success of your e-commerce fulfillment operation relies on the proper shipping strategy. This doesn’t just mean free and fast (although this is an excellent place to start).
Below are some tips to take with you to maximize customer retention and e-commerce fulfillment operation growth, the same way Amazon fulfillment does.
The Shipping Process Itself
In the world of e-commerce fulfillment, shipping is split into three primary stages:
- Order receiving
- Order processing
- Order fulfillment
In the world of e-commerce fulfillment, shipping is split into three primary stages:
- Order receiving
- Order processing
- Order fulfillment
The famed two-day shipping is a hallmark of Amazon Fulfillment, and this kind of premium shipping is much sought after in fulfillment services. Thanks to Amazon Fulfillment’s vast web of fulfillment centers, they’ve revolutionized how things get done. With 3PL fulfillment (Amazon Fulfillment), this exclusive fulfillment service is available to those who opt for the FBA route.
In other parts of the world, Amazon Fulfillment offers same-day delivery to the consumer at no extra cost. The logistics of this particular fulfillment service can be tricky, with every cog in the order fulfillment machine having to run smoothly. E-commerce fulfillment is competitive, and same-day delivery can give your fulfillment operation that much-needed edge.
As we just touched on, the e-commerce fulfillment industry is competitive, with giants such as Amazon Fulfillment monopolizing the marketplace. Smaller-scale fulfillment operations need to stand out, and one way to do so is through a fulfillment service that offers next-day delivery.
Amazon Fulfillment has changed shipping expectations. One way to navigate order fulfillment that is slower than Amazon Fulfillment or a similar fulfillment service is to offer expedited shipping.
Expedited shipping means quicker than standard shipping, but actual order fulfillment times can vary. You may not have the lightning-fast 3PL fulfillment center infrastructure in place, and that’s fine. By viewing expedited shipping as a bridge between speedy Amazon Fulfillment style shipping, and slow, standard shipping, your fulfillment service can offer customers something that makes them feel like they’re getting the best.
No matter where your e-commerce fulfillment operation is based, you’ll likely eventually come up against an international order fulfillment task.
Different countries have different regulations, tariffs, taxes and requirements for incoming items, so it’s essential to be aware of them when running an efficient e-commerce fulfillment operation.
Like with everything in your e-commerce fulfillment operation, it is essential to assess the costs of each fulfillment service and choose the order fulfillment option that most aligns with your needs, budget and customer expectation.
A Side Note: The Secrets of Section 321
The United States (U.S.) is a leading market in the e-commerce world.
As a Canadian e-commerce store owner, you’d be right to look at the market across the border—and lucky for you, there is a little-known U.S. Customers & Border Protection (CBP) legislation called Section 321 that can help attract customers to your e-commerce fulfillment operation.
What is Section 321?
Section 321 is the legislation used to describe de minimis shipments. Any order fulfillment shipment valued at $800 (U.S.) or less can be imported into the U.S. free of taxes and duties.
How to Leverage Section 321
With American customers avoiding duties and taxes on purchases from your e-commerce fulfillment operation, they can spend more at your store and avoid the extra costs.
By offering faster transit times in place of the taxes and tariffs, the customer can receive the item quicker, reflecting well on your fulfillment service and order fulfillment, thus driving sales.
The U.S. is a massive market, and Section 321 should be seen as a backdoor into that market— a whole treasure trove of e-commerce fulfillment you’d be foolish to leave untapped.
Shipping Integrations (Amazon Order Fulfillment, Shopify Order Fulfillment, Walmart Order Fulfillment & More)
3PL fulfillment includes shipping integration.
Here is a look at a few of the most popular:
Amazon Fulfillment comes with a wide variety of fulfillment service benefits, taking care of the whole fulfillment operation from start to finish, giving you peace of mind that the entire process of fulfillment service is done to the standard of a global corporation.
Like Shopify, WooCommerce allows your e-commerce fulfillment operation to seamlessly integrate order fulfillment and tracking with a user-friendly interface and excellent customer support.
With automatic order routing and easily integrated shipping options, Walmart Order Fulfillment sets a new standard in e-commerce fulfillment, offering a fulfillment service to rival even Amazon Fulfillment.
Fulfillment Centers, Returns and Software
Fulfillment Centers are vital cogs in the retail supply chain. While they won’t win any awards for being the sexiest subject, fulfillment centers are the foundation of any successful e-commerce fulfillment service and fulfillment operation.
At the heart of any thriving e-commerce fulfillment operation is top-tier warehousing logistics.
Listed below are some of the key elements:
Fulfillment Center Management
This refers to the everyday operational running of a warehouse. From Amazon Fulfillment to Shopify Order Fulfillment, any successful fulfillment service relies on excellent fulfillment center infrastructure.
This includes (but is not limited to): inventory management, safety and security, carrier relationships and audit checks. Any E-commerce fulfillment operation is only as good as its fulfillment center.
Fulfillment Center Operations
Operations tend to be goods specific. Principles of fulfillment center operations include inventory checks and product cycling. An efficient warehouse operation for your e-commerce fulfillment operation will help with the following:
- Keeping costs low
- Staff productivity
- Punctuality of inventory shipment
- Well organized storage solutions
Fulfillment Center/Warehouse Management Systems (WMS)
WMS is a software that provides the necessary tools to save time and abolish the manual processes associated with fulfillment center operations and inventory movement. By meticulously optimizing inventory and tracking fulfillment services and fulfillment operations, fulfillment centers can provide valuable insight into 3pl fulfillment.
Amazon Fulfillment’s fulfillment center management system can even generate e-picking lists based on the geographical location of products within the fulfillment center.
Warehouses and your E-commerce Fulfillment Operation
Record order fulfillment speeds don’t happen overnight. Amazon Fulfillment didn’t just spring into existence.
We know that 3PL fulfillment makes this all possible; below is outlined how:
- Fulfillment centers store inventory in designated spots, keeping the stock cycle as efficient as possible.
- Fulfillment centers receive, stow and sort products with slick precision to promote desired order fulfillment.
- Like those used by Walmart Order Fulfillment, Shopify Order Fulfillment and Amazon Fulfillment, distribution centers are demand-driven locations with high product turnover. Their job is to store high turnover products short-term, with order fulfillment direct to destination.
- Efficient returns are integral to an e-commerce fulfillment operation and any fulfillment service and fulfillment center. 3PL fulfillment operations allow Fulfillment centers to deal with this as quickly and effectively as possible. This is important as customers expect quick and free processing of unwanted items.
As touched on previously, order fulfillment software can enhance your e-commerce fulfillment operation through various tasks. Through integration with your existing tech stack, you’re provided real-time updates into a whole host of things, such as:
- Fulfillment center management
- Omni-channel management
- Inventory control
- Order fulfillment and processing
- An overview of fulfillment services
Requirements are usually vast in scope and include (but are not limited to):
- Integration of e-commerce platforms
- Automation of orders
- Inventory management and alerts
- Returns verification and distribution metrics
Pick and Pack Fulfillment
This refers to the process after the order is placed. Fulfillment center operatives will find and retrieve products, then pack them into boxes for order fulfillment. Streamlining the operation is paramount to efficiency; the quicker the fulfillment service and fulfillment operation, the more money can be made.
Fulfillment centers use two main strategies for order fulfillment: picking and packing.
- Picking is the process of physically finding the item in the fulfillment center.
- Packing is the staple of any well-run e-commerce fulfillment operation and fulfillment center.
- The best fulfillment centers (such as those run by Amazon Fulfillment) will have a quick turnaround and expert quality control.
Kitting and Assembly
Kitting and assembly is a fulfillment service offered by 3PL providers which deal with the packaging of separate pieces into the same group.
This can be due to bulk sales or manufacturing concerns.
Kitting is the assembly aspect of the fulfillment service, collating many pieces into a single item. These kits are helpful as they are ready-to-go, so order fulfillment is expedited, even when there are many parts to the order.
Assembly is the final process of arranging said items for the kit. From here, the item can ship, and the order is fulfilled.
Business-to-business (B2B) order fulfillment focuses on fulfillment services directed to other businesses and not a single consumer.
B2B orders tend to be bulk orders and shipped via freight. B2B orders are outstanding for a business stocking up on an item to sell to the consumer directly, as it provides easy order fulfillment.
The main differences between B2B & Business-to-consumer (B2C) orders are:
- B2B is higher quantity, lower volume.
- B2B order fulfillment and shipping are more complex as they are much more significant.
- Regulations of B2B are stricter ad have to comply with a more complicated framework.
- The cost of B2B orders is more expensive as they deal with higher value order fulfillment.
- Speed is usually more critical for B2B order fulfillment; guaranteed delivery dates are the best way to grow your e-commerce fulfillment operation (see also: Amazon Fulfillment)
B2B fulfillment is built on long-term relationships with e-commerce fulfillment giants. The difference between B2B and B2C is the same as selling lemonade from a stall on a street corner (B2C) and shipping palettes of soda to Walmart (B2B.)
E-commerce Fulfillment Center Logistics
E-commerce fulfillment center logistics means storing and shipping inventory for online stores or marketplaces. E-commerce fulfillment logistics begins when inventory is sent from the manufacturer and ends with the customer. The three cogs in this machine are:
- Inventory Management
- Warehousing and Storage
- Order Fulfillment
Any successful e-commerce fulfillment operation must keep each of these elements in check to see if they are to have a future in the order fulfillment game. This is particularly important when a single fulfillment center may not be enough, and your e-commerce fulfillment operation may need to distribute its inventory.
3PL fulfillment services and fulfillment centers with many locations are essential in this case. 3PL fulfillment centers with many locations can facilitate expedited order fulfillment and thus customer satisfaction.
But using more than one fulfillment center costs money, so when exactly should you use multiple?
You should use more than one fulfillment center in the following scenarios:
- You ship a high volume of orders
- Your products are heavy
- Consistent, speedy order fulfillment is vital to your e-commerce fulfillment operation
- You have customers across the globe
Another option is startup fulfillment services; these can provide e-commerce fulfillment effective in inventory management and all other order fulfillment requirements.
A positive of this model is that providers are flexible and are happy to scale with your e-commerce fulfillment operation, giving you time to grow.
As with all elements of your e-commerce fulfillment service, picking the option that best aligns with the values and vision of your e-commerce fulfillment operation is critical.
Subscription fulfillment is pretty self-explanatory. Essentially, it means shipping products from an e-commerce fulfillment merchant to a customer on a regular, predetermined basis. This can mean monthly, bi-weekly or whatever other frequency, and can range from things such a perfume, sex toys or even war memorabilia.
As you can imagine, curated boxes throw up challenges for 3PL fulfillment, and making customers’ lives more accessible doesn’t always make the fulfillment service and logistics easier with it.
Some of the challenges of subscription order fulfillment are:
- Shipping orders on time
- Changes to products weekly/monthly
- Product quality control
For these reasons, outsourcing subscription order fulfillment to 3PL fulfillment centers is a tough decision, with factors such as kit, assembly and subscription complexity all at play.
The most significant barrier, though, may well be cost.
Cost and Fees of 3PL Fulfillment
Calculating costs can be tricky and depend on which 3PL fulfillment partner you align with. A good rule of thumb for calculation is to add up the following:
- Fulfillment Center labour costs
- Fulfillment center picking and packing overheads
- Type of packaging used
- Kitting outlay
- Return outlay and processing
Not all 3PL fulfillment services and fulfillment centers are the same, and some offer enhanced fulfillment services (Amazon FBA). So it’s essential to choose what is best for your operation at the moment and not what you imagine would be helpful down the line.
Benefits of 3PL fulfillment
- There is no need to worry about workload, overheads, planning, budgeting, and all the outlay costs of starting from scratch.
- The expertise on offer from companies such as Shopify Order Fulfillment, Amazon Fulfillment and other fulfillment centers and fulfillment services is invaluable to the steady functioning of your operation.
- Top-of-the-line tech capabilities, order tracking and inventory insight.
Shipping options that cover a large geographical footprint and promote excellent order fulfillment and customer satisfaction through state-of-art 3PL fulfillment centers
That said, you may not even need 3PL fulfillment.
Why Some Brands Don’t Go 3PL
- There’s no way to sugarcoat it: self-fulfillment is a challenging task. You have to be your own fulfillment center, inventory manager, picker, packer, receiver and shipper, and you have to do all of the other fulfillment service tasks.But if you’re up to it, there are many benefits to keeping it all in-house.
- Control over inventory and warehouse operations.
- Picking, packing and shipping every order allows you to add that ‘personal touch.’
- You don’t have to worry about quality control.
- You may feel like you’re not selling your soul to Amazon Fulfillment or other big businesses.
With the last point in mind, it may be time to look at Amazon Fulfillment in more detail, specifically Amazon 3PL (A3PL.)
Amazon Fulfillment and How it Differs from Traditional 3PL fulfillment
You’re probably wondering how Amazon Fulfillment (FBA) differs from the more traditional 3PL fulfillment.
Amazon Fulfillment offers many of the same benefits as a traditional 3PL fulfillment, such as vast fulfillment centers, storage and distribution.
They differ a little in what they don’t offer, how they compete with you, and the fees.
Amazon Fulfillment is an excellent tool for access to online shoppers. They also handle all customer requests, returns, fulfillment operations, and fulfillment services. The fees are transparent and known upfront, so you can easily calculate how much you will make from your e-commerce fulfillment operation.
On the flip side, working with a giant the size of Amazon fulfillment means quality control won’t be as strict, there is more minor order customization, and the fees are higher. As well as this, Amazon fulfillment is direct competition.
FBA Fulfillment Fees
Amazon Fulfillment fees include everything from size and weight to labour, and they tell you upfront how much you’ll be paying.
They are pricier than traditional 3PL fulfillment services due to their scope and reputation and may also charge the following fees:
- Product Return Fees
- Inventory Removal Fees
- Penalty Fees
- Package Prep Fees
- Long-term Storage Fees
At the end of the day, it is down to you to decide if Amazon Fulfillment is worth it for your e-commerce fulfillment operation and whether their fulfillment centers’ fulfillment services are right for you.
Industries that Benefit from 3PL Fulfillment Centers
- Accessory Fulfillment
- Cosmetics Fulfillment
- Apparel Fulfillment
- Supplement Fulfillment
- Electronics Fulfillment
- Toy Fulfillment
- Pet Accessory Fulfillment
- Collectibles Fulfillment
- Kitchen Appliances Fulfillment
- Luxury Goods Fulfillment
- Game Fulfillment
- Outdoor and Equipment Gear Fulfillment
- Healthcare Fulfillment
- Home & Household Goods Fulfillment
- Skincare Fulfillment
- Book Fulfillment
- Food & Beverage Fulfillment
- Sports & Fitness Fulfillment
- Hair Care Fulfillment
- Album and Media Fulfillment
Pros and Cons of Service Models
Which option is best depends on what kind of e-commerce fulfillment operation you plan to run. Once you know that, the decision becomes much more accessible.
- Setting Up Your E-commerce Fulfillment Operation in Canada in 2021
- If you’ve made it this far, I’m guessing you’re confident in your e-commerce fulfillment operation idea. You’ve probably decided on a name. Sorted the requisite financing and are raring to go.
But before you do, you may need to look into ticking off the following checklist items:
- A Business Licence – while not necessary for all businesses, many new companies require a license before operating legally. BizPal is an excellent tool for figuring out if you do.
- Register for GST/HST – In most cases, unless your new small business’s gross income stays under $30,000 for four consecutive quarters, you will have to register for the goods and services tax (GST) and harmonized sales tax (HST), which varies by province.
- Register for Provincial Sales Tax (If Needed) – If you’re starting a business in Alberta, British Columbia, Manitoba or Saskatchewan, you’ll need to register as a collector of provincial sales tax. You’ll have to register to Quebec Sales Tax (QST) in Quebec.
- Now, if you’re a non-resident importer, Canada has its own Non-Resident Importer Program (NRI). This programme is best suited for U.S. companies selling directly to Canadian consumers, retailers or businesses.
How to Become a Non-Resident Importer
The best way to register for the NRI program is through a customs broker. Brokers offer many services aimed at helping U.S. companies as they begin exporting to Canada. A broker will:
- Ensure the U.S. company is compliant as an exporter to Canada
- Ensure the U.S. company is taking advantage of USMCA benefits wherever possible,
- Help in developing the product’s final price (inc. duty, taxes, transportation and brokerage fees)
- Explain Canadian taxes (if you’re unfamiliar with them)
- Assist with simplifying the necessary documentation
- Establish the non-resident importer account (inc. obtaining a Canadian Business Number and completing the Agreement for Maintaining Books and Records Outside of Canada)