Advantages and Disadvantages to Outsourcing to a Fulfillment Company

dvantages and Disadvantages to Outsourcing to a Fulfillment Company

First, the advantages to using a Product Fulfillment House  for your business. Firms looking to outsource their fulfillment may be able to receive bundled pricing for shipping, whereby all fulfillment activities are bundled into a set price per order fulfilled. Often this is associated with orders that are consistently the same number of items, and the same weight. This alone can save a small business money. Alternatively, many third party fulfillment companies will provide simple per order, and per item fee structures. In these ways, companies electing to outsource fulfillment services can more accurately forecast their costs.  Fulfillment companies are also important in E-Commerce.  Many Order Fulfillment Services have developed intelligent e-Commerce systems to help manage the many elements within the business. The e-commerce system is adaptable and is able to integrate into clients ordering system, or even host the ordering system themselves. They also enable integration into their respective couriers system, to enable the fulfillment houses clients live information upon package deliveries. Now for the disadvantages.  First of all, using fulfillment services means you company has indirect control.  Fulfillment companies act as the shipping center for their clients’ companies. Should there be errors in shipping process or poor handling procedures, it will be the client company that receives the bad reputation, not the fulfillment center.  Also product damage or shrinkage can be an issue.

FULFILLMENT COMPANY WILL TYPICALLY NOT TAKE FULL RESPONSIBILITY FOR PRODUCT DAMAGE UNLESS THEY ARE DIRECTLY RESPONSIBLE, NOR WILL THEY TAKE FULL RESPONSIBILITY FOR PRODUCT SHRINKAGE UNLESS IT CAN BE PROVEN THAT THEY ARE DIRECTLY RESPONSIBLE.

This practice will vary depending on the receiving procedures utilized by the fulfillment house. Typically if a fulfillment house verifies counts, they will accept a larger responsibility for the items in their care, however, if they accept packing lists for supplied inventory as accurate, they will likely not be as responsible for shrinkage.

fulfillment company