Ecommerce fulfillment: pros and cons

The outbreak of the COVID-19 pandemic accelerated what was inevitable anyway. Thus, we could see with our own eyes a real ecommerce boom – as is clear in a study European E-commerce Report 2021, the percentage of internet users making online purchases increased from 68% in 2019 to 73% in 2020.

The situation is similar for marketplace sites – auction portals and sales platforms where customers can easily buy what they are currently looking for by comparing sellers, product prices, and shipping costs. As we read in RetailX’s European Marketplaces overview published in October 2021, the pandemic has had a significant impact on marketplace developments, resulting in another marketplace model – one that only connects sellers directly with buyers (e.g., Airbnb or… Linker Cloud Fulfillment Network).

However, no matter where you sell, high-quality order processing is an integral part of a successful online business. That’s the fact.

What is fulfillment?

Basically, it is the processing of orders placed online: right from the point they enter the online shop or the marketplace to delivery to the end customer (and handling returns, if any).

Depending on the level of business maturity, order fulfillment can be a more or less automated process that is done in-house or via external parties.

Third-party fulfillment for ecommerce: benefits and drawbacks

Now, as you are reading this article, you have started to seriously consider betting on a fulfillment service, I have good news – it has more benefits than you think. So, what are the main advantages of fulfillment?

Business scalability

A major benefit of fulfillment is that it simplifies business growth. Sound trivial? Take my word for it – it is only so on the surface.

Just imagine that the golden time of your online shop is a month away. Can you manage the increasing number of orders? Will you be able to expand your warehouse overnight or organise a double shipment of goods? If the answers to these questions raise any doubts, you might want to think about it once more.

Fulfillment can be adapted to each stage of your shop’s development, ensuring that incoming orders are fulfilled without worrying about storage space or handling returns at home or abroad.

Lower costs

In the long term, this solution will also help you save money. You will gain measurable financial benefits and the time you would normally have to spend looking for business partners and conducting difficult negotiations with them. By choosing to use external fulfillment services, you won’t have to employ more staff too.

Secondly, you won’t have to spend money on expanding the warehouse or buying the necessary tools there.

Thirdly, the negotiation of delivery costs will be carried out on your behalf by a business partner who, as a larger entity, will simply get better rates. In addition, the costs incurred for fulfillment will depend on the actual number of parcels shipped (orders serviced) and not on forecasts or previously made assumptions.

Competitive advantage

The reality of today’s ecommerce market isn’t easy, even though it is extremely promising. Competition means that a young business has to push up its elbows and engage in an (unequal) battle with the market giants.

Note that in this race it’s not only the quality of the products sold that count, but also the way we do it. Fulfillment allows you to gain at least some advantages in this area by providing:

• smooth and efficient order processing (fast order completion, short delivery times),
• ready-to-use integrations with courier companies, giving customers a choice of several shipping options (courier, parcel machine, pick-up point),
• product and process personalisation (gift wrapping, biodegradable fillings, set creation, etc.),
• potential for sales in foreign markets,
• time savings that you can dedicate to business development.

New market availability

While not everyone thinks about it at the beginning of doing business, growth in the domestic market, after all, isn’t the end of a company’s development as such. We owe one thing above all to the pandemic: customers are bolder and more willing to buy products from abroad – this opens another round of opportunities, but also challenges.

Selling into new markets is an excellent idea for strengthening business and gaining notable financial profits. Fulfillment services, especially the fulfillment network, greatly improve this process – making it possible to test sell small batches of products without bearing the cost of service, for example.

Do you think it’s possible to sell your products in several European countries in one week time, providing local delivery at competitive prices and a lead time of up to 48 hours?

With a fulfillment network, this is possible. Coordinating these activities by yourself means, in the most optimistic scenario, six months of hard, intensive work for the entire team. By using fulfillment, you will be able to start the adventure of selling on foreign markets even a week after signing a contract with a fulfillment provider.

Limited control over product and order processing

Although I am a great advocate of fulfillment, I cannot look at it blindly. I admit that the minus of this solution is the quite limited control around the product itself, as well as order handling.

Initially, what happens on the part of the external company is unknown to the owner. The retailer relies only on the declarations made and the contract signed, which requires a big dose of trust. Most logistics operators perform their tasks with the utmost care, but the risks cannot be eliminated completely (although they are still significantly lower than when responsibility is dispersed among many different subcontractors).

Summary

It doesn’t matter whether you are just growing your business or are sending out literally millions of parcels a day: you don’t have to do everything in-house. Fulfillment saves you both time and money: experts will take care of your shop’s orders, handle returns, manage the warehouse and deal with transport challenges. Comprehensive logistics services are the future of successful online sales today.

About the author: Kamil Odolczyk – Fulfillment Network Manager at Linker Cloud with 6 years of experience in fulfillment and logistics sector. Dedicated to connecting e-commerce with fulfillment for mutual growth. Privately enthusiastic reader, cinema connoisseur and absolute geek.

Quelle: www.linkercloud.com