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What is a Fulfillment Center? Everything You Need to Know

There are many pieces and processes to running a business, especially when it comes to selling products online – that’s where a fulfillment center can come in handy. But what exactly is a fulfillment center, and how do they work?

Whether you are a business owner, looking to sell crafts online, or just enjoy shopping on the internet, there’s a good chance fulfillment centers have an impact on your eCommerce experience. Here’s everything you need to know about them.

What is a Fulfillment Center?

When selling products online, businesses of all sizes need to be able to store inventory and ship orders to the various places they need to go. The more efficient this process is, the less time and money has to be spent on shipping orders. 

A fulfillment center is an independent business that will store the products and materials for many companies and complete or fulfill orders that are placed through a seller’s port of sale, usually a website. 

Warehouses can be helpful if a business is just looking to store inventory for an extended period of time, but most traditional warehouses do not provide the additional services of managing the inventory, selecting and packaging the correct products for specific orders, and shipping the parcels for delivery to customers. 

Fulfillment centers are much more than warehouses. They can also include spaces to store large inventory for a more extended period of time. Ultimately, fulfillment centers are a much more integrated part of a business.

Why Do People or Businesses Use Fulfillment Centers?

Some businesses are able to efficiently handle the processes of managing inventory and shipping orders themselves in-house. For many businesses, though, this is a complex, expensive, and time-consuming part of their business. Fulfillment centers can solve a lot of those issues.

Pros

Storing inventory requires space, organizational skills, and oversight. If a business doesn’t have the space or staffing to manage its inventory, a fulfillment center can provide solutions to those problems.

Having the space to store a large inventory with a variety of products requires a lot of physical space. Not all sellers can afford space in a warehouse to store their inventory or even space in an office or home. Limited storage space also means a limited number of products. 

When contracting with a fulfillment center, sellers can move their inventory to a separate location dedicated to storing and managing inventory for multiple businesses. This allows businesses to provide a larger number of different products to expand their business and clientele. 

If businesses don’t have to worry about space for inventory, that opens up opportunities for the space that is available to be used to improve other aspects of the business. This could mean office space for more employees, time to generate new ideas and products, or even just the ability to enjoy life outside of work. 

In addition, fulfillment centers are often able to contract with shipping companies for lower rates for shipping. This is because fulfillment centers can guarantee a larger volume of parcels and packages to ship consistently than what smaller businesses can provide on their own. With a lower rate for shipping comes lower costs for both businesses and customers. 

With better inventory management, businesses are less likely to oversell products. Most fulfillment centers can integrate their system with a business’s eCommerce software to prevent selling more products than what is available at the time and can notify the business to provide more inventory and update their website to reflect what is available.

Returns can become a lot simpler with a fulfillment center. Businesses may still need to coordinate refunds and returns at times, but as a whole, fulfillment centers can handle the return process and its effect on inventory with fewer hassles and frustrations for the businesses and customers. 

Cons

Outsourcing the inventory and shipping processes does come with a cost. Fulfillment centers provide a valuable service and can charge a variety of rates for that service. Many fulfillment centers charge a flat rate to integrate into a business’s system and then a rate based on either the number of items or the number of parcels sold. 

Another disadvantage of using a fulfillment center is the lack of control or personalization. Businesses are not usually able to control how quickly items are shipped or delivered or the materials used to package and ship parcels out to customers.

Some small businesses like to include a personalized note thanking a customer for their business or even a small “freebie” product. This sort of personalization is not usually part of the process when using a fulfillment center simply because it can make the process less efficient and cost-effective for the fulfillment center, business, and customer.

When inventory does run out at the fulfillment center, orders can be delayed for a long time until sellers replenish what is out of stock. Depending on how quickly this status is communicated to the seller, the distance between the seller and the center, and many other factors, orders can be dramatically delayed and lead to customer dissatisfaction. 

Not all fulfillment centers are the same. They will vary in the services and storage ability they provide and may also have their own restrictions that can impact a seller’s business. 

Mintfulfill is Different

Mintfulfill is a fulfillment center that developed out of real experience from real business owners. Our automated system eliminates many of the costs and hassles associated with shipping orders from an eCommerce business. 

Not only will buyers receive their orders from your business in a timely manner with quality shipping materials and cutting-edge processes, but they will also receive a delightful mint. This small treat is a simple reminder that we take your business seriously and focus intently on your customer’s satisfaction. 

The team at Minfulfill understands that the relationship with businesses should benefit both parties and help each to be more successful. By helping to grow your business, we are able to grow our own. Contact us today to see how we can help scale your business and allow you to spend more time doing what you want.

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