[Updated post from April 1, 2021]
Most e-commerce merchants know when the time has come to outsource fulfillment services to a third-party logistics (3PL) provider. Perhaps your inventory storage strategy is no longer efficient, or orders have started coming in faster than your homegrown operation can keep up with.
But when the time comes to start looking for an e-commerce fulfillment provider, many merchants feel totally overwhelmed.
One of the issues that many retailers run into is that e-commerce fulfillment isn’t any single process or workflow. It’s a collection of fulfillment services that all play a critical role in ensuring a positive customer experience with your brand. But which e-commerce fulfillment services should your business be prioritizing?
We're going to run through six key fulfillment services that your brand should be looking for in an e-commerce fulfillment provider.
Many e-commerce businesses are put off from outsourcing fulfillment because of the high cost. At first glance, it can appear more cost-effective to manage inventory and fulfillment yourself.
But while in-house fulfillment works for emerging brands with low order volumes, the hidden costs will quickly spiral out of control as your business grows. This is because your business has to start taking responsibility for fulfillment services that a 3PL partner would handle: leasing warehouse space, running fulfillment centers, packing and shipping, and installing warehouse and Order Management Systems, just to name a few.
This isn’t just expensive in terms of money – it’s also costly on time. As a retailer, you want your main focus to be on your customers, not logistics. To outsource fulfillment is to leverage the economy of scale of a provider who can offer these order fulfillment services at a more affordable rate than you can achieve on your own.
Building the skills internally to run a fulfillment center and manage the order fulfillment process is rarely time or cost-efficient for e-commerce companies. While it is possible to learn by doing, it’s easy to make mistakes along the way that cost you the goodwill of your customers and suppliers.
By choosing to outsource fulfillment, your business doesn’t just get access to physical infrastructure. 3PL partnerships are a gateway to accessing the knowledge of industry insiders who are experts at working with brands at your point in the growth journey. Order fulfillment companies know the do’s and don’ts to assist your business in implementing a seamless fulfillment process you scale into new channels or product categories.
When your business doesn't have to be plugged into the day-to-day runnings of a logistics operation, this creates more bandwidth for your team to focus on initiatives that enhance growth and customer loyalty. Having a reliable and trustworthy partnership with an e-commerce fulfillment provider means your brand can feel confident that your fulfillment needs are being taken care of.
For more reasons why you should outsource fulfillment, check out our full post.
Whether your inventory is in one place or distributed across multiple fulfillment centers, having a unified approach to inventory management is vital to keep track of your SKUs and make informed decisions about where and when to restock.
Excess inventory and dead stock are recurring problems in e-commerce, especially for high-volume, high SKU count brands in apparel and footwear. While it isn't always possible to combat all the causes of excess inventory, it's far more likely to become a problem if your 3PL partner doesn't offer real-time inventory management as a fulfillment service.
Inventory visibility involves much more than knowing where your inventory is and how much you have; it's also about being able to follow every step of the order fulfillment process as it happens.
Being able to see into your fulfillment center each time an order has been picked, packed, and shipped is a great confidence boost, especially if your business is located some distance from your 3PL. It also enables you to identify potential issues before they happen, such as insufficient inventory to fulfill orders or delivery delays that could cause customer service issues.
Ryder assists customers in executing a flawless e-commerce experience via its direct-to-consumer fulfillment platform. An intuitive interface puts streamlined, real-time inventory and order management at your brand's disposal. Track inventory levels, pause, edit, or cancel orders, and manage returns for detailed insights into your fulfillment operation.
When e-commerce is still firmly in the era of plain cardboard boxes and third-party marketplaces, it’s near impossible to build a meaningful relationship with your customer. For brands who are looking for a competitive differentiator, the time for one-size-fits-all fulfillment solutions has passed.
Choosing an e-commerce fulfillment partner that offers custom fulfillment services is a powerful advantage in a space where the majority of brands are still relying on generic packaging and pick and pack processes to fulfill customer orders. The ability to customize the fulfillment process with value-added fulfillment services helps to kickstart your fulfillment marketing efforts and foster higher levels of brand loyalty.
Some of your SKUs may have very specific needs when it comes to packaging or kitting. It’s important that your 3PL is able to provide these fulfillment services while also providing you with other unique marketing opportunities.
For example, if you're a beauty brand that wants to offer a seasonal gift box for the holiday season, this requires a fulfillment service workflow that includes specialized packaging, subassembly, and product sampling. If your fulfillment company offers limited 3PL value-added services, this impacts your ability to offer customers a memorable unboxing experience.
Ryder offers a full suite of custom fulfillment services, including branded packaging, product kitting, inserts, and product sampling to assist brands in creating their ideal delivery experience. The Order Rules functionality on the Ryder platform gives merchants granular control over implementing these services, with packing and shipping notices that can be set to fire automatically when an order contains certain SKUs.
While it’s tempting to stick with one order fulfillment center to keep your fulfillment strategy as simple as possible, multi-node fulfillment is an order fulfillment service that your brand shouldn't ignore.
Centralized fulfillment comes with several benefits, such as a low fulfillment cost and making it more straightforward to manage inventory. However, it does have some drawbacks.
The customers furthest away from your fulfillment center are looking at longer last-mile delivery times, while your cost to ship orders can end up ballooning to meet customer expectations for rapid delivery.
This is further complicated because fast-growing brands aren't always able to predict where future growth is going to come from. Many merchants end up missing out on valuable growth opportunities because their provider’s facilities are restricted to just one or two regions.
That’s why it’s so important to choose a fulfillment provider who can provide you with a network of fulfillment centers to lower delivery timeframes and access more affordable shipping. Being able to store inventory in multiple warehouse locations also enables you to make smarter, data-driven decisions about where to keep certain SKUs according to regional demand.
The Ryder fulfillment network boasts 24 fulfillment centers at strategic locations nationwide, totaling over 10 million square feet of warehouse space close to key transportation routes and consumer hubs. We work closely with both single and multi-node customers to determine their needs and design the optimum fulfillment and inventory storage strategy for their needs.
3PLs aren't just a place where orders are picked packed and shipped. They're also the centerpiece of a vast network of tools and major e-commerce platforms that power the e-commerce fulfillment process.
In sum, a 3PL needs to be a suitable technology partner if your brand is going to achieve fast, flawless fulfillment.
Although not traditionally thought of as order fulfillment services in their own right, seamless technology integrations help to equip your business with better insights and more value-added services that streamline the customer experience.
Having to build integrations independently between your 3PL and other systems is an expensive and time-consuming process for your brand. Whether your brand is interested in a returns management portal or greater business intelligence, fulfillment partners that can connect you with best-in-class e-commerce and fulfillment service providers are an invaluable resource to help your business grow.
Ryder offers a range of native integrations with leading e-commerce platforms including Shopify, Happy Returns, Skubana, and more that enhance your online store and help you manage multiple sales channels more effectively. Best of all, our integration network is continuously growing to supply our customers with smarter solutions to refine their fulfillment and shipping process.
Of all the e-commerce fulfillment services that e-commerce businesses worry about, keeping shipping rates affordable is a constant pain point. The growing expectations for free shipping are forcing many brands to shoulder the cost, reducing already narrow profit margins.
If your e-commerce fulfillment company only uses a single parcel carrier to ship orders, you're at the mercy of whatever General Rate Increase, peak season, or fuel surcharges the carrier chooses to put in place. Big increases can occur with little warning, causing spikes in shipping costs that could result in your brand making a loss.
For shipping to be an affordable and reliable order fulfillment service, you need to look for e-commerce fulfillment companies that can supply rate shopping software to compare rates between multiple shipping carriers in real-time. Being able to compare carriers instantly to find the best balance of cost versus speed is a powerful tool to optimize your shipping strategy and keep shipping costs down.
Ryder’s SmartRate selection tool is an invaluable fulfillment service that allows an online store to compare shipping rates in real-time from regional, domestic, and international carriers. We analyze your order history to determine which rates meet your cost requirements while keeping transit times in line with customer expectations. SmartRate Selection offers you the ability to set the most affordable rate as the default option for your orders, or to select different carriers for different types of orders depending on DIM weight or destination.
Your e-commerce business can’t only think about outbound logistics when choosing an order fulfillment company; you also need to consider what happens when customers return items.
Returns management is a whole spectrum of e-commerce fulfillment services that require expert handling to get your merchandise back on the shelf as quickly as possible. Processing returns and refunds, managing return shipping, adjusting inventory levels, and reconditioning items for resale are all critical to make the returns process run smoothly. If the returns experience is not satisfying for your customers, they’re unlikely to make a repeat purchase.
You should be asking potential fulfillment companies whether their fulfillment centers use their own return processing software, or if they can integrate with any third-party returns management platforms that can process returns on your behalf. Bringing in an external solution can help to lower return costs while also optimizing your returns workflow.
Ryder features native integrations with Happy Returns, Loop, and Returnly, three of the top returns management solutions in the market. In addition to integrations, brands can take advantage of our scalable e-commerce platform to track the return status of orders and maintain complete visibility.
What do all of these e-commerce fulfillment services have in common? They’re designed to help future-proof your business against difficulties with scaling and bringing in new technologies to streamline your operation.
Your business might not need all of these fulfillment services right now, but having them in your toolkit is the key to maximizing future growth opportunities and staying competitive within an ever-changing e-commerce landscape. For 21 questions to help you find the right 3PL logistics provider, check out our full post.
By being proactive and thinking about what fulfillment services your brand may need further down the track, you can make sure that you're partnering with a fulfillment provider like Ryder who has the technology and expertise to keep your business at the cutting edge of customer expectations.
