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What Are the Main Components of Fulfillment Costs?

If your e-commerce business is growing and you no longer have the space to store inventory or the time to ship it out, you’ll want to consider partnering with a third-party fulfillment service. This type of fulfillment service can manage your delivery logistics and give you more time to concentrate on the day-to-day management of your organization.

As your source for orders, storage and delivery, there are several components that make up the costs involved in hiring a fulfillment service. Let’s take a look at a few of these components and how they contribute to your overall fulfillment services package:

Storage

Let’s imagine that your neighbor, Bob, just launched a clothing retail website and is selling T-shirts like hotcakes. For the first few months, Bob was keeping his inventory in his garage. However, Bob’s son just moved back from college and needs somewhere to keep all of his dorm room treasures.

Bob could look into renting a unit in his local storage facility, but it’s in the next town over. And between running his website and responding to customer service inquiries, traveling that extra five miles every day to retrieve his shirts could seriously limit Bob’s ability to sell his products.

Bob’s best bet is to work with a fulfillment service provider who will handle all aspects of storage management for him. Fees might include charges for the square footage needed to store his shirts and keeping track of his inventory to make sure he has enough T-shirts to keep up with demand.

Labor

In order for Bob’s T-shirt inventory to receive the proper attention it needs to maintain proper contact with his supplier, the fulfillment center staff should be consistently monitoring his inventory. They should also be keeping records updated in the company database.

In addition, fulfillment center staff members are often responsible for generating pick lists, pulling orders and preparing items for shipment. It’s important for fulfillment centers to maintain a team of dedicated employees working around the clock to ensure all logistics are handled smoothly.

Customer Service

As Bob’s business grows, he’ll no longer be able to individually respond to each customer service inquiry that comes through. He can, however, count on his fulfillment service center to provide customer service support to ensure his clients are satisfied with their purchases. Fulfillment centers often offer customer service support staff in the form of call center employees and team members who can respond to inquiries via e-mail to provide helpful solutions.

If you want to learn more about how a fulfillment center can help your business grow, contact us at National Fulfillment Services today. We have over 50 years of experience in providing businesses with logistics solutions. We have kept many businesses running smoothly and have helped them expand to reach more customers around the globe.


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