Your garage filled to capacity months ago. You want to move to a larger storage facility, but it will strain your resources. When an order comes in, it’s a hassle to track down the items, make sure they are packed properly, and arrive in one piece. At the same time, slow shipping via the Post Office is killing you and costing you customers. As with other aspects of your startup, once business gets larger than you can handle, it’s time to call in the professionals. It’s time to get a fulfillment company to handle your products.
What a fulfillment company does
Using third-party fulfillment is not the answer for every entrepreneur or every product, but it is a no-brainer for many startups that want to take their business to the next level.
Basically, the path from clicking an order to making sure that product arrives intact is the province of a fulfillment company.
The process is designed to be as seamless as possible—a fulfillment company is doing its job if end to end dealings are not noticeable at all by the consumer. They warehouse your products, track your sales, handle your shipping and provide customer support.
Related: How to Calculate Crowdfunding Shipping and Fulfillment Costs
How to choose the right fulfillment center
There are a number of important factors to consider when aligning your startup with a fulfillment center. Primarily, it is crucial to analyze the short- and long-term goals of your product and make sure that the center has the capacity to fulfill the premise that you outline.
Questions to ask a potential fulfillment company
Before talking to fulfillment companies, there are some important questions to ask:
Are they regional? Where are they located?
Inquire about the location(s) of the fulfillment center you hope to engage with. What is the feasibility of finding new audiences for your products in another region or overseas with this company? Fulfillment centers can give you the capacity to create targeted expansion and move your product to specifically targeted customers more quickly.
What is their flexibility with product amounts?
One of the best aspects of using a fulfillment center is that they allow you to scale your product up and back easily during times of year that are more robust or lean. At the same time, this gives you the chance to make a strategic move without the risk of having to purchase additional space or make additional hires. If an area of expansion doesn’t work out, you can easily scale back. Find out how well they deal with this kind of product flow and what costs are like for additional storage.
How well do they handle complex packing needs?
What if your products are perishables? Oversized items? Very fragile? Many fulfillment centers are knowledgeable in the best ways to store, package and transport these special items. You will want to find out what precedent they have with your exact product.
What is their e-commerce integration like?
Working online with a fulfillment center should optimize your information, not create headaches. You want to make sure they are able to integrate fully with your CMS and that their dashboard is clear, providing your most important metrics.
This aspect of the business will make communication with customers easier, as well. It will ensure their ability to tracking stock amounts is clear and in as real-time as possible. One surefire way to lose a customer is when they read your product is “currently unavailable.”
How do they track your products?
What is the fulfillment center’s method of mobile location? How do they make sure to quickly find and scan your product? What do they do to communicate with customers to let them know where their order is in the delivery process? Not only does comprehensive mobile service like this speed up orders, it cuts down on service calls from clients wondering where their product is.
What is their customer service philosophy? Can they describe how they handle returns?
Ask about previous customer service issues the fulfillment center has fielded and how they addressed these issues. When faced with a defect or return, how do they handle it? Then inquire about metrics on services like quick delivery and customer satisfaction.
Sign Up: Receive the StartupNation newsletter!
How easy is it to add inventory?
What kind of barcodes and other logistics do they require to add inventory in general—and in particular, the first time? What about their flexibility with moving new products or adding more?
What is their growth potential?
Working with a third party fulfillment center is a symbiotic partnership. You want to make sure their goals mesh with your own. If they are focused on overseas expansion and you do not see that as a priority for your startup, perhaps this is not the ideal match.
Once you’ve settled on the idea of using a fulfillment center, it is important to remember that one size does not fit all. Look at all of your options and have a clear sense of answers to the questions posed here before moving ahead with something that could become the most important partnership your business ever has.
