The third option is to purchase a fulfilment service. Fulfilment means the rental of a warehouse storage area, but with full service, i.e. warehouse workers, ready-made solutions that facilitate the warehouse operation, and often also with a broad range of courier services. In broad terms, by using fulfilment, we rent not just some room in a warehouse, but an entire ready and working warehouse which we only need to fill with goods. As a shop owner, we only manage the supply process and commission the warehouse to process our orders, without needing to probe into any operational details of the warehouse work itself (how many people to hire, how to organise the work, etc.).
– fulfilment provides full warehouse service without the need to invest in a warehouse or even to hire employees;
– fulfilment gives us control over the quality of the warehouse operation (packaging and dispatch of parcels) comparable to managing our own warehouse (i.e. we can decide upon any aspect of order processing, dates and methods of dispatch, or even how to package the goods) without the need to have any knowledge of warehouse management.
Usually, warehouses that provide fulfilment services are outfitted with all kinds of tools which improve the speed and quality of work (WMS, code readers, warehouse equipment, etc.);
– fulfilment services are usually settled on a monthly basis, based upon actual use of warehouse storage area and the number of works commissioned (e.g. number of orders processed). This enables commencement of the operations with no financial contributions and the cost of the service itself is scaled to the increasing sales at the shop. In other words, any cost borne is covered by the increasing sales.
Fulfilment usually means greater optimisation of the warehouse organisation than when we manage it on our own. As we purchase a service, it's nearly guaranteed to be provided by people with more experience than a novice seller has. This lets us bypass the ‘learn from own mistakes’ stage and take advantage of the knowledge and experience of our partner company.
– fulfilment does not release us from the need to manage the supply process and to monitor the stock rotation;
– similarly to dropshipping, fulfilment requires a great deal of trust in the company which we entrust with the performance of activities that directly influence the perceived quality of service among our customers for us.