Some say that setting up an online store, which leads to the growth of their small business, is easy.
But many entrepreneurs found that as soon as they leap to e-commerce, the stress of building profitable marketing campaigns, managing suppliers, and keeping up with customer requests can be tad overwhelming.
Which leads them to ask the question: Is e-commerce economically viable for small business owners?
Here’s the thing: New and exciting business opportunities fill the internet. But only if you know how to lay the proper groundwork will you be able to set yourself up for success.
Mind you, in the e-commerce model, a lot of people overlook the importance of finding the right e-commerce fulfillment provider.
Understanding e-commerce fulfillment
In a nutshell, e-commerce fulfillment is the process of accepting orders through your online store and then shipping the products to your customers on time.
It usually has four main parts:
1) A customer visits your online store, adds a couple of items to their shipping cart, and then clicks the “Buy” button.
2) The online order is then forwarded to the order fulfillment center.
3) The fulfillment will be the one responsible for packing and shipping the order.
4) A courier then delivers the item to the customer.
Why having e-commerce fulfillment matters
Ensuring that your online orders are fulfilled is usually part of a sequence that will determine how well you sell online.
Here are the reasons e-commerce fulfillment process is essential to online businesses:
Avoid inventory management problems
The most common issue a lot of online stores face is overselling.
Usually, merchants have more orders on a certain item than they have in their inventory. So, they need to email customers, informing them that the item is already out of stock.
Over time, this could lead to loss of sales and customer trust. Once angry or upset customers write reviews, this can poorly reflect on your business, which can discourage prospective buyers.
E-commerce fulfillment helps you tighten your control over inventory management.
Improve customer satisfaction
Sourcing a particular product is one thing, but presenting it into the customer in a way that draws them in is another matter.
In the clothing industry, for instance, merchants know how vital a presentation is to their prospects.
You would not like it if a dress is delivered to you rolled up like a rug, right?
Well, e-commerce fulfillment partners offer you services that are tailored to make you look good.
These services usually include giving out tracking information, personalized inserts, etc. and can also be utilized to design more cost-effective packaging, helping your business save a lot of money in the long run.
Lower operating costs
One of the highest costs a lot of e-commerce companies incur is the shipping ‒ especially if it is international shipping we are talking about.
Fortunately, fulfillment companies significantly reduce the amount spent on shopping in two ways.
First, when they utilize a warehouse that is centrally located, one could significantly reduce shipping costs, because the inventory is moved closer to customers.
Second, most of these companies also offer discounts on shipping charges, allowing you to reduce your shipping costs to customers. Lowering costs in shipping encourages bigger sales volumes from customers.
Broaden your reach
It is time that your business goes global! Whether you receive an order from another state or country, you will be more than ready to take your business to newer heights by hiring the right order fulfillment provider.
Most fulfillment companies have a particular framework in place that will allow you to deliver orders from any part of the world. You can even utilize their global platform to broaden your reach and to grow newer markets.
Boost your sales
Whether you are already an established business that has been building your existing customer base for years, or a small startup wanting to establish new customers, there is one business advice that rings true for both:
A fulfillment center helps you grow your business and successfully maintain it in the long run.
While it is true that these fulfillment centers enhance your customers’ overall experience, they can also boost your sales.
These e-commerce fulfillment services are known not only as one of the most efficient ways companies can win over customers but also to retain them.
A growing customer base is not only important for the overall success of your business, but it is also incredibly vital to those who want to expand internationally.
Handle market fluctuations
No matter what kind of e-commerce business you are in, markets tend to fluctuate throughout the year and can be detrimental to some e-commerce companies. Moreso if you own a startup and you are not equipped to handle drastic changes and unprecedented situations.
So, although you might not precisely know how to handle demands or a sharp drop in sales, an e-commerce fulfillment company will. For instance, a third-party logistics provider will help you deal with these kinds of fluctuations once they happen.
That way, your business will not drive itself to the ground as you try to meet these demands, or badly hurt itself mostly because of the lack of sales.
Choosing the right e-commerce fulfillment model
Generally, there are different models of e-commerce fulfillment:
- Self-fulfillment or in-house fulfillment. This happens when the seller fulfills the whole order process by himself without involving a third-party or a drop shipper.
- Third-party fulfillment. Once the order fulfillment becomes too complicated for the seller to handle on their own, they might switch to this model.
- Dropshipping. Sellers don’t manufacture or store the products that they sell. Instead, they’re directly shipped by a manufacturer. In dropshipping, the whole process will be handled by the manufacturer, and the seller has no control over the operations. The overall satisfaction of shoppers relies on drop shippers.
Keep in mind that all of these models have their own successes and limitations. The best way to know whether a particular model is tailored for your business is to identify your business goals and then learn how to understand its requirements.