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If you want to launch an online business selling physical goods, then order fulfillment needs to be a critical part of your planning.
Fulfillment includes storage and inventory of your goods, packing orders, and shipping to customers.
Small businesses have the option to handle everything themselves — which is time-consuming — or to outsource this function to a professional fulfillment service.
Ultimately, it will be difficult to scale your business without the help of professional fulfillment services.
- What Does a Fulfillment Center Do?
- How to Choose the Right Fulfillment Service
- 10 Top E-Commerce Fulfillment Services
What Does a Fulfillment Center Do?
Fulfillment services provide warehouse, inventory, and shipping services. This includes order processing and order management.
Some fulfillment services handle returns for you. Others provide supply chain services like production logistics and recycling.
Most provide convenient integrations with e-commerce platforms, such as Shopify, Volusion, and Squarespace. That way, when a customer orders something on your website, the fulfillment service is automatically notified and can begin immediately processing the order.
Order Fulfillment and Inventory Management
The service will receive, manage, and store your inventory; process orders; package orders; and ship orders via FedEx, USPS, UPS or other carriers.
The fulfillment center — a large warehouse — is the place at which all of these activities occur. Many fulfillment services operate out of multiple warehouses, and some — like DB Schenker — have a global footprint.
Real-time inventory-level tracking can alert you when you’re close to running out of one or more items that you sell.
Some fulfillment services will partner with the shipping services of your choice. Others have their own shipping partners.
Typically, you can expect lower shipping costs. Most monitor real-time shipping rates and have algorithms that automatically find the best rate. The majority maintain special relationships with shippers and are able to pass discounts on to merchants.
Did you know that you can compete with Amazon Prime and get your packages to your customers in two days or less? In fact, Amazon provides its own fulfillment service (called Fulfillment by Amazon) which you can use even if you’re not selling on Amazon.
Alternatively, you can choose to offer economical shipping that takes 7-10 days.
This video provides an overview of how Fulfillment by Amazon (FBA) receives your inventory.
What is the Fulfillment Process?
There are a lot of nuances involved when it comes to fulfillment processes. And there are services on the market that cater to different types of businesses.
Nevertheless, we can generalize things.
The overall fulfillment process looking something like this:
- The customer places an order with you via telephone, your online store, or even in-person.
- You send the order to the fulfillment center. (Online orders will likely trigger an automatic email to the fulfillment provider.)
- The fulfillment service receives the order, picks the items, and packages them.
- The fulfillment service gives the package to the appropriate shipping service. They may have contracts in place, or they may work with the provider(s) you have chosen.
- The package is on its way to the customer.
How to Choose the Right Fulfillment Service
The right fulfillment service for you will vary based on the needs of your business, as well as the specific services offered by the fulfillment service.
For example, you might need a fairly simple operation to handle a small number of goods.
Others, however, might need a more robust operation capable of complex inventory management, careful timing regarding order handling, and the ability to partner with shipping companies to get packages to customers’ doorsteps as quickly as possible.
Other considerations include:
- Whether the company can handle special packaging (e.g., for those selling fragile goods)
- Whether the company is better for single-items or handling multi-item orders
- Whether you need specialty services like batching (sending out a single item to many customers, all at once) or kitting services/subscription boxes (which feature multiple unique items that need to be grouped together to be sold as a single unit)
10 Top E-Commerce Fulfillment Services
There are a lot of e-commerce fulfillment services on the market today. Because it can be overwhelming to choose the best-fit company for you, we reviewed these top e-commerce fulfillment services available to help you narrow down your options.
If you sell physical goods via Amazon’s platform, the Fulfillment by Amazon (FBA) option is the logical choice for you.
How it works: You store your products in Amazon’s fulfillment centers. Amazon is responsible for picking, packing, and shipping orders. Plus they provide customer service for your buyers.
- Fastest available shipping: 1-day shipping. Amazon Prime members are eligible for free two-day shipping.
- Best for: Merchants who want to sell via the Amazon channel
Can You Use Amazon Fulfillment Without Selling on Amazon?
Yes, you can! Many people don’t realize that you can use Amazon’s precision logistics even if you don’t sell on Amazon. The service — called Multi-Channel Fulfillment — is simply a variation of Fulfillment by Amazon (FBA).
- You can offer 1-day, 2-day, or standard (3-5 day) shipping options.
- Amazon handles returns
- You’ll benefit from their ability to handle ordering spikes during the holidays
Note: You can also sell on Amazon and other platforms and use FBA.
What Makes Fulfillment by Amazon (FBA) Unique?
- Includes customer service
- Known for accuracy
- Includes one of the fastest shipping options around, with additional customer choices for upgrades
If you sell across multiple channels (e.g. your own website, Amazon, eBay), FedEx’s fulfillment services may be of interest to you.
- Pick, pack, and ship your customers’ orders
- Manage your inventory
- Integrate with the marketplaces you sell on so that FedEx receives automated notifications of new orders.
- Facilitate the shipping of your products from the manufacturing warehouse to FedEx’s warehouse
In short, you can think of FedEx as a full-service, multi-channel fulfillment service.
- Fastest available shipping: FedEx Priority Overnight, for next-business-day delivery arriving as early as 10:30 AM
- Best for: Merchants who want to sell across multiple channels (including eBay, Etsy, Walmart, Shopify, Magento, and more) and want to work with FedEx for shipping services
What Makes FedEx Fulfillment Unique?
- Comes with the FedEx Fulfillment platform, which is an online tool allowing you to manage your order fulfillment and inventory management processes in one place
- Supports integrations with most platforms, marketplaces, and shopping carts
ShipBob’s biggest selling point is that it offers two-day shipping without requiring that you use a single marketplace for selling.
- They integrate with all major e-commerce marketplaces and platforms (including Squarespace, Shopify, BigCommerce, WooCommerce, Magento, ShipStation, and BackerKit)
- They provide inventory management and storage using a network of fulfillment centers that span the US
- They offer order picking, packaging, and shipping from the center that’s closest to your customer.
Video: the founders of ShipBob share important factors to consider when choosing a fulfillment service.
ShipBob also assists you with finding the fastest, most cost-effective shipping option based on destination.
- Fastest available shipping: Two-day shipping
- Best for: Merchants who want to sell across multiple channels, yet want to offer their customers lightning-fast shipping
What Makes ShipBob Unique?
- Provides their services for all of the marketplaces of your choice
- Offers global shipping options
- Provides crowdfunding (e.g. Kickstarter) fulfillment
Ships-a-Lot is a Shopify partner that offers you a fast turnaround time. The company promises to get orders out the door less than 24 hours after receipt.
The company boasts a 99.98% accuracy rate in terms of order fulfillment, but their focus is strictly on small-to-medium-sized packages/products (“Packages may not exceed 21 inches in any dimension or be heavier than 75 pounds.”).
- Fastest available shipping: Overnight
- Best for: Online sellers (especially those using Shopify) that are selling small- to medium-sized goods
What Makes Ships-a-Lot Unique?
- ShipBob is a Shopify partner that guarantees fast order fulfillment. The company will pay you $20 if it takes more than 24 hours to get an order out the door.
- They also specialize in handling crowdfunding campaigns, including shipping rewards to funders.
RedStag Fulfillment is a cloud-based order fulfillment service. The company maintains a network of fulfillment centers that allow you to reach 97% of those in the US within 1-2 days and 99.9% of those in the US within 3 days.
Other services offered by RedStag include same-day order fulfillment, 100% accuracy in order picking, and specialty fulfillment services.
Video: RedStag founders explain how the company was formed to meet unmet e-commerce fulfillment needs.
RedStag offers a 30-day, risk-free trial to new customers.
- Fastest available shipping: Overnight
- Best for: Those who want a full-service logistics partner who will manage every aspect of the fulfillment process and that offers extremely fast turnaround times
What Makes RedStag Unique?
- RedStag owns a large network that enables it to get packages to your customers quickly.
Rakuten offers order fulfillment and logistic services, but its optional services make the company stand out from its competitors.
- Rakuten will help you handle returns.
- It offers kitting/subscription box-related services, so you don’t have to package up your own kits.
Rakuten also offers a nationwide network of climate-controlled warehouses.
- Fastest available shipping: Overnight
- Best for: Those who want to work with a large, established company that integrates well with most platforms and has existing relationships with most worldwide shipping companies
What Makes Rakuten Super Logistics Unique?
- Rakuten’s SmartShip Optimizer helps you reduce shipping costs and decrease the delivery time required for your customers to receive their goods
- They will handle customer returns for you
Fulfillify.com is an online fulfillment service that focuses on e-commerce business.
With Fulfillify, you’ll get a powerful dashboard for managing the fulfillment process; kitting services; and same-day pick, pack, and ship services.
It syncs with most shopping carts, including Shopify, Volusion, WooCommerce, and UltraCart.
- Fastest available shipping: 1-2 days via UPS to 98.6% of the US
- Best for: E-commerce businesses seeking an experienced, web-based option (Fulfillify.com ships over 75 million packages per year)
What Makes Fulfillify.com Unique?
- Fulfillify.com offers auto-fulfillment from the center closest to the customer to help speed up delivery (Fulfillify.com operates four fulfillment centers)
Floship is a Hong Kong-based company offering fulfillment services to those targeting customers in Asia including mainland China.
The company charges for three services: picking and packing, storage, and shipping.
Floship offers subscription box services, promises a turnaround time of fewer than 24 hours, and integrates with Magento, Amazon, Shopify, WooCommerce, and more.
- Fastest available shipping: Dependent on the carrier you choose. Floship works with a large number of shipping providers.
- Best for: Businesses/manufacturers working in China and/or targeting a Chinese audience
Video: Entrepreneur Christian Yan talks about how Floship enabled his Kickstarter campaign to meet tight deadlines.
What Makes Floship Unique?
- Floship offers an end-to-end solution for those conducting business with customers in China and Hong Kong
- They provide fulfillment services for crowdfunding campaigns (e.g. Kickstarter).
DB Schenker is a large-scale fulfillment service focused on the final steps of your supply chain, including inventory management, order fulfillment, and shipping.
DB Schenker offers over 750 global locations. The company will help you develop a cost-efficient strategy that gets your orders into your customers’ hands as quickly as possible.
- Fastest available shipping: Depends on the carrier you choose, as well as where you are shipping to
- Best for: Online businesses with an international clientele
What Makes DB Schenker Unique?
- DB Schenker’s international focus means that an e-commerce business can work with one company for all of its sales fulfillment needs
Additional Tools: Fulfillment Companies and GoShippo
You can think of it as a free-to-use matchmaking service that matches what you need for your business against its database of 3,000+ fulfillment services.
It also includes a calculator so you can get a rough estimate of how much a given service will cost you.
Video above: Will Schneider of Warehousing and Fulfillment, explains how their free service matches you with a vetted fulfillment provider.
In addition to Warehousing and Fulfillment, you may be interested in a related option called Shippo. This tool helps you compare shipping rates across multiple carriers.
While many fulfillment companies have their own partner contracts with carriers, Shippo can help you see if a particular company charges a lot more for specific services.
Below we’ve provided answers to fulfillment services questions we’ve received from readers. Do you have a question of your own? Please leave it in the comments section below this video. We’d be delighted to research it and provide an answer for you.
How much do order fulfillment companies charge?
You’ll need to get a custom quote from the fulfillment service. The quote will be based partly on the services you choose and the amount of storage you need.
There may be hourly charges, per item fees, flat fees, or fees for optional services.
To understand fulfillment costs it’s helpful to start with what fulfillment companies typically charge for, how they charge, and what those average rates are. Below we’ve listed some averages cited by Warehousing and Fulfillment.
- Initial set-up: Set up fees can range from $100 – $1,000
- Storage: $8 – $15 per pallet
- Receiving and inventory processing: $35- $40 per hour
- Fulfillment: $2 – $8 per order
- Packaging materials: These may be included in the fulfillment fee or charged per piece
It’s worth noting that storage fees may be billed per pallet, per bin storage, per cubic footage, or per square footage.
Additional services may include packaging for fragile items, light assembly, kitting, storage insurance, inserting promotional inserts or gift messages on your behalf, and processing returns.
Does Shopify handle fulfillment services?
No, Shopify does not handle fulfillment services. Shopify offers an all-in-one e-commerce solution that includes pre-built store websites, hundreds of apps to extend functionality, and marketing tools.
Some companies behind popular Shopify apps, like Merchify and Printful, will create and drop-ship customized small products like t-shirts, hoodies, laptop skins, cellphone cases, posters, yoga mats, and coffee mugs.
There are fulfillment service providers like Ships-a-Lot that specialize in Shopify fulfillment.
What does 3PL mean?
The term 3PL stands for third-party logistics. The term is broad and used in a variety of ways. Some use it to refer to fulfillment services.
It’s often used in connection with supply chain services like air and ocean freight, land transport, production logistics, returns management and what’s called aftermarket logistics. The latter may include returning items to the vendor and recycling.
As your e-commerce business grows, a fulfillment service becomes a viable investment. These companies help you streamline the order fulfillment process and obtain valuable savings via shipping partner contracts.
A good fulfillment partner will help your business scale and exceed your customers’ expectations.