Cost Savings With Fulfillment Centers for Ecommerce Sites

Fulfillment center and fulfillment house are popular terms for a large packaging warehouse. The terms have been coined from the mid-1990s, and "fullfillment warehouse" is most commonly used nowadays on an in-house basis to describe a warehouse that services only fulfillment orders. A fullfillment warehouse can be found in many locations, including factories, shipping yards, depots, or even individual warehouses. In the United States, the largest fullfillment centers are located in California and Texas, but they are not the industry leaders. In Canada, there is one in British Columbia.

A fulfillment center offers the shipper with a flexible storage and shipping options. They are also responsible for collecting the raw materials and merchandise, preparing the warehouse for shipment, and picking and packing the items for shipping. Depending on the size of the delivery network and the products that will be shipped, a warehouse may need to staff additional employees, rent additional space, or even purchase additional equipment. Freight consolidation and cross docking are common ways to improve the efficiency of the shipping network. Warehouse equipment such as packing machines and conveyor belts are essential to the efficient transportation of goods. Proper warehouse inventory management is also an important factor in keeping costs down.

Companies that ship to small local businesses may find it beneficial to fulfill orders inside the warehouse so that they have more time to spend with their customers, or they may want to expand their product line because the demand is high and they want to sell as much as possible. Companies that ship to larger local businesses can benefit by filling orders outside the facility in order to save on extra products and shipping costs. This is especially beneficial for companies that ship internationally and need to ship extra products from one warehouse to another.

There are several types of fulfillment centers. A distribution center has its own delivery system, but instead of customers ordering from the company, they distribute their products to warehouses. Distribution warehouses need to be linked up with a manufacturing facility in order to receive shipments, but they are less expensive than a fulfillment center.

Fulfillment centers allow companies to ship orders to customers around the country or around the world. When a company ships an item to an address within the United States, it will incur shipping costs. It can be a significant amount of money to ship a package to another location, especially if the customer is located in a different city. By using ecommerce fulfillment services, an online store owner can greatly reduce shipping costs and get the items that are ordered shipped directly to the customers. Instead of paying a freight company or third party, which often charges an arm and a leg, an ecommerce fulfillment center can ship to the customer for a small fee.

The fulfillment center is simply looking for customers and packages to ship to them. Once an order comes into the company's office, they simply look for a warehousing warehouse that will rent out to fulfill the request for that particular product. In many cases, the company does not even have to hire a packing company or special truck driver in order to get the job done.

Depending on the size of the business, an ecommerce site owner may simply need one or several warehouses in order to meet their inventory needs. Some sites require as few as one warehouse while larger companies may require as many as five. The size of a company dictates the number and type of fulfillment centers that it has. Larger businesses will have a much greater need for warehouse space and therefore will have to pay a higher price for warehouse space. Smaller ecommerce sites will not have nearly the same inventory demands and therefore will be able to obtain fulfillment centers with lower overhead rates and more affordable rent.

Fulfillment centers provide great cost savings for online retailers. They help reduce the cost of stocking inventory, which is something all retailers welcome when their bottom line is being hit by the high cost of purchasing the products they sell. The fact that shipping and storage can also be packaged together to provide even greater cost savings is another great perk to shopping with a fulfillment center.