What is a fulfilment centre

Fulfilment centre's enable online shops and e-commerce merchants to outsource warehousing and the capacity to directly manage inventory. Sellers send merchandise to the fulfilment centre, and the outsourced provider ships it to customers for them.

  Inventory management is a prevalent operational problem for many online stores, but is an essential component of cultivating the best possible customer experience. Fulfilment centres make inventory management much easier and allow store owners more time to focus on other areas of their business.

  What are some of the most significant inventory management problems?

A common issue for many online stores is overselling, which is when merchants have more orders for a certain item than they have the inventory to fulfil. Online stores then email customers and inform the item is out of stock, which leads to lost sales and poor consumer sentiment. If angry customers write reviews, oversells discourage potential sales from other buyers. Outsourcing fulfilment tightens control over inventory management.

Stockouts are when an item is displayed as unavailable on the website, which is problematic if it is a product that sells well. In addition, many smaller e-commerce websites face issues with picking and shipping. Mispicks are when you select the wrong product for an order. Misships are when the wrong item is sent to a customer. Damaged items are typically the correct product, but the product is unusable by the time it reaches the customer. Because e-commerce store owners have a great deal of tasks to handle, shipping issues are a risk. In particular, this type of inventory problem harms customer satisfaction.

Using a fulfilment centre to coordinate inventory and ship to customers

Online stores have a couple options for managing inventory with an outsourced fulfilment centre: receive and review items before sending them to the fulfilment centres or have them shipped to the warehouse directly from the manufacturer. Depending on the type of online store, you will need to select one of these options. A fulfilment centre gives you the ability to scale your business in the future. If you plan to launch new product lines in the future, fulfilment won't require as much additional attention. Outsourced fulfilment speeds up the time a new line can reach the market.

Plus, this service improves shipping and returns processes. Because major carriers are often willing to negotiate with shippers that promise a high volume of parcels, fulfilment centres are often able to get a better rate than an individual online store could on its own. Lower fixed shipping costs enable some merchants to begin offering free shipping to customers. Outsourced fulfilment centres send package tracking numbers to merchants, who then pass the information on to customers.

  Outsourcing fulfilment strengthens your returns process. Some industries, such as fashion and retail, have higher instances of returns. Returned merchandise can be sent to the warehouse instead of your place of operation. This gives store owners more flexibility and ensures there are fewer issues with processing. Merchants just need to issue refunds when necessary, rather than coordinating return shipping.

When selecting an outsourced warehouse and fulfilment partner, it's important to make sure they can integrate with your existing e-commerce software. This makes it easier to keep track of orders and send customers tracking information. Many providers will work with an online store's individual needs to find the right solution. Outsourcing something as time-consuming and complicated as fulfilment can streamline operations for merchants.

Our fulfilment warehouse, which is heated using a ATAG Boiler from Factory Heaters.