“WHERE THE HELL IS MY PARCEL?!”
A question that none of your customer should EVER have to ask. Studies show that around 40% of consumers would probably never order again in an online shop where they had a poor delivery experience. That’s why more and more sellers are opting to outsource some or all of the processes involved in processing customer and purchase orders to Amazon FBA prep & fulfillment centers.
With ever faster and better shipping options, the expectations of customers increase. But what is important to consider when choosing a fulfillment center and how do you know which one is the right one? We’ve got the answers.
What does a Fulfillment Center do?
Goods Acceptance & Warehouse Logistics
Warehousing is one of the basic tasks of any fulfillment center. The use of a fulfillment center saves you the high costs of renting your own warehouse and, with good inventory management, you always have your products available.
In the first step, your products must be delivered to the fulfillment center, where they will be received and stored in the warehouse. The labelling of the pallets and boxes is extremely important at this point. Clearly visible labeling speeds up the process and thus, your products can be shipped more quickly. A fee is charged for the delivery and storage of the goods, depending on the number of products – however, the costs vary greatly from fulfillment center to fulfillment center.
The storage fee for the goods then depends on the size of the required storage area and the time period for which the products are to be stored. A good fulfillment center will advise you to find the perfect fulfillment package for you. The storage costs are usually charged on a monthly basis, similar to a rental.
Order Acceptance, Picking, Packaging & Labeling
If the fulfillment center offers an online shop integration, the data from incoming orders is automatically transmitted to the warehouse. The staff responsible for picking receives the details of the order and information on where the products are stored in the warehouse. The picking team then bundles the products required for fulfilling the order and forwards them to the FBA prep & packaging team.
Once all the goods have been bundled, the shipment is securely packed to ensure a successful delivery without any damage. Some fulfillment centers also offer branding options like individualized cartons or special filling materials. This can strengthen your brand awareness and improve the customer experience. For the packaging process, usually a price per package is charged, which primarily depends on your size and branding requirements as well as the nature (e.g. material) of the products. Fragile products, such as glass, will cost more than robust plastic products.
Delivery & Returns management
Unfortunately, the distribution process is not a one-way street. No matter how beautiful, premium or practical your product is, there will always be customers who want to return their products. The important thing is to design the return management as cost effective as possible. A fulfillment center with a well thought-out returns management system ensures that returns are processed quickly, the products are prepared for sale again as soon as possible and the customer quickly receives his money back.
It’s important to keep in mind that processing returns will always be a battle. There will always be discrepancies between what the customer said he returned and what the warehouse said he actually received. That’s why it’s important that you and the fulfillment team clarify exactly how different types of returns should be handled. In other words, it must be clearly defined what criteria are used to evaluate the quality of the returned goods, what happens if the goods are returned too late, and so on. Because although the customer is always king, the economic efficiency of shipping and returns must not be neglected.
Product repair & product disposal
Depending on how large a fulfillment center is, how many employees it has and how well they are trained, fulfillment centers also offer minor repairs if your products arrive or are returned in a damaged state. Whether your product can be repaired depends primarily on the complexity of your product. Complex technical items will rarely be repaired on site, simple products can usually be repaired at the fulfillment center.
If products are damaged in a way that they can no longer be sold, or if you want to destroy parts of your inventory for some other reason, the fulfillment center will usually take care of that as well.
Why do I need a Fulfillment Center?
The outsourcing of your Amazon FBA fulfillment processes has the advantage that no infrastructure is required on your part, since the fulfillment firm takes over the entire fulfillment process after your customers have ordered the goods. When you sell in another country, hiring a local fulfillment center ensures short delivery times and a quick customer support. And since modern technology and efficient working methods are used, you save the entire acquisition costs for the handling of logistics. Plus, you profit from the fulfillment center’s experience and reliability.
As seen above, a solid logistics management system involves dozens of tasks and requires a high level of expertise. In most cases it is therefore better to have these tasks carried out by a professional so that you can fully focus on other areas of your Amazon FBA Business.
I’m part of Amazon’s FBA program: Do I still need a Fulfillment Center?
Even if you are part of the Amazon FBA program, you should sooner or later start looking for a suitable fulfillment center. If you want your business to grow, you will eventually be confronted with order quantities that you can no longer handle on your own – apart from the fact that your house or apartment would turn into a chaotic warehouse. In your case, the fulfillment center primarily functions as an intermediate warehouse, which always sends your products to the Amazon Warehouse when you run the risk of being out of stock. The storage costs in an independent fulfillment center are usually much lower than those charged by Amazon. By leaving a part of your goods in a fulfillment center, you will thus save storage costs.
What makes a good Fulfillment Center?
So what defines a good fulfillment center? This depends strongly on your requirements, but there are 3 characteristics that every Fulfillment Center should have:
✓ Flawless shipping logistics & short delivery times
✓ Fast and good communication
✓ Reliable return management & agile problem solving work flows
Always focus on the basic requirements first: that the delivery arrives at the customer within the shortest possible time, the customer find the right product when unpacking his parcel, that he is happy with the packaging and that, if necessary, returns can be made quickly and easily.
How do I choose the right Fulfillment Center?
It is important to keep in mind that there is no such thing as “standard fulfillment”. As an online seller, you have to know your own requirements and those of your customers precisely. So ask yourself in advance:
- Where should the fulfillment center be located?
- Which products are involved?
- For which logistics processes do I need support?
- What is especially important to me?
Only after you have clearly defined your requirements and goals, the fulfillment center can assess if they can get the job done, what measures need to be taken, and what support and additional services are required in order to be able to offer your customers the best possible shopping experience. Since the Amazon FBA prep & fulfillment center is an important business partner in the storage and shipping of your products, it is important that you consider every aspect of the future business when making your decision. The best way to find out which 3PL provider is right for you is to ask the questions mentioned above. Hiring a fulfillment center requires a high level of trust and usually involves a long-term business relationship and commitment. Thus, try to collect as much information as possible in advance to eliminate any doubts.
How can Sermondo help me find a Fulfillment Center?
There are thousands of great fulfillment centers out there, but it can hard to find the right one for your business, especially if you sell your products in another state or country.
On Sermondo, you can find dozens of fulfillment companies that are familiar with the special characteristics of Amazon FBA logistics. From all around the world – all in one place. Browse FBA prep & fulfillment centers, compare their services and read their reviews. That way you get a comprehensive overview about the locations and offers of different 3PL providers, you can see their most important information at a glance and have all contact data at hand. You can contact the fulfillment centers easily by using the contact form provided for each listing. And if you don’t want to search yourself, you can post a job listing with your requirements. Fulfillment centers that can meet your requirements will then contact you. Yes – it’s that easy!