What is a Fulfillment
House?
A fulfillment house or order fulfillment company is an organization
specializing in the warehousing, picking the item in the order from
storage (known within the industry as pick
and pack services), carefully packaging and prepping
the ordered items into customized packaging, and then routing the item
to the purchaser in the shortest amount of time possible. Handling the
"behind the scenes" processes once an order has been recieved
is the primary function of fulfillment houses, which are also commonly
referred to as order fulfillment, order processing companies, or return
processing companies.
Example of the
Order Fulfillment Process
The fulfillment company receives the order for a product
from a vendor, retailer, or end consumer via fax, phone, email, or a
web EDI interface. The order manifest is given to a picker. A picker
is an employee within the fulfillment house used for locating the products
that are to be shipped out to the end customer. The picker transports
items from the order manifest found in the fulfillment company's warehouse
and selects products that match the order. From there, the picker gives
the items in the manifest to a packer. The packer is responsible for
double checking the order manifest to ensure that all products brought
to the pick and pack station by the picker are correct. Once confirming
an order is complete, the packer will then select which packaing to
use, and carefully package the items for shipment. The packer will then
label the box, and if necessary, notify the end consumer that the shipment
is on the way. The last step in the process is selecting which package
courier can get the package their the fastest and at the cheapest rate.
The shipping label and packing label are now applied, and the order
is sent out via the best or preferred courier service. See why you should
use American Shipping Centers for your fulfillment
shipping needs!
Advantages of Fulfillment
Centers
Warehouse and
Storage Facilities
In intial stages of development, the manufacturer may not have adequate
warehousing facilities or the funds to build them. Fulfillment companies
have thousands of available square footage for storage.
Fulfillment Company
Shipping Costs
Unless a manufacturer or vendor is shipping thousands of items per month,
the company will not get the beneficial "bulk" shipping rates
available to companies such as American Shipping Centers. The pricing
ASC will pay can often deviate from standard shipping prices by 30%
of more. With some customers, the savings associated with shipping bulk
rates provided by fulfillment companies can outweigh the charges of
the fulfillment company itself.
Packing Materials
Costs
Similar in concept to the savings associated with shipping costs, shipping
materials bought in bulk also are purchased at more favorable rates.
When compared to the cost of purchasing supplies for shipping through
retail outlets, savings can amount to 50%.
Fulfillment Costs
Fulfillment companies will typically charge on a per item shipped basis.
During slower times of the year, this can have a large impact on employee
cost savings. Furthermore, this methodology allows the producers marketing
the product to accurately predict what the shipping charges on the item
should be.
Solutions
