Finding the Right Ecommerce Fulfillment Solution

The way you deliver your products is almost as important as the products themselves. With 73% of consumers stating that their delivery experience directly affects their satisfaction and decision to shop with a retailer again, the stakes have never been higher. A fulfillment method that aligns with your brand’s promises and meets customer expectations isn't just a nice-to-have; it's a critical component of your business strategy.

Consider this: retailers lose $300 billion each year due to inefficient fulfillment operations and supply chain challenges. That’s a massive loss of potential revenue that could be recaptured by simply choosing a more effective fulfillment strategy. And with 50% of U.S. retailers now prioritizing omnichannel fulfillment, it's clear that flexibility, speed, and reliability are becoming non-negotiable.

There are numerous methods available to suit your business needs, customer base, and budget. Are you using the one that’s best for your brand?

• In-House Fulfillment: Your brand personally handles all aspects of order fulfillment, including warehousing, picking, packing, and shipping. This method provides complete control over the fulfillment process but requires significant investment in infrastructure, technology, and labor.

• Drop Shipping: Your brand sells products that are directly shipped from the manufacturer or supplier to the customer. This method removes the need to hold inventory and allows for a wide product range, reducing overhead costs but providing less control over shipping.

• Fulfillment by Amazon (FBA): Products are stored, picked, packed, and shipped by Amazon. Sellers (your brand) send their inventory to Amazon’s fulfillment centers, and Amazon handles the logistics. This method gives access to Amazon’s vast logistics network, Prime shipping, and customer service but comes with fees and requires compliance with Amazon’s requirements.

• Fulfillment by Merchant (FBM): The seller handles the entire fulfillment process for orders placed on platforms like Amazon. Unlike FBA, where Amazon manages fulfillment, FBM gives the seller full control over warehousing, shipping, and customer service.

• Third-Party Logistics (3PL) Fulfillment: A third-party logistics provider manages the entire fulfillment process on behalf of the business. This includes warehousing, inventory management, picking and packing, and shipping. 3PLs are ideal for businesses looking to outsource fulfillment to save time and significantly cut operational costs.

Choosing Your Ecommerce Fulfillment Partner

When choosing to partner with a 3PL or other fulfillment provider, it's crucial to select one that aligns with your needs, as this decision can be the key to unlocking growth, streamlining operations, and enhancing your customer experience. It’s not just about who can ship your products; it’s about finding a partner whose location, scalability, technology, and service quality match your brand’s ambitions.  

The right partner should deliver a high level of accuracy, speed, and comprehensive services, all while maintaining a transparent cost structure and adhering to security and compliance standards. By focusing on these critical factors, you’ll be better positioned to choose a fulfillment partner who not only meets your needs today but supports your success well into the future.

• Location and Coverage: Ensure the partner has a strategic location(s) that can reach your target markets quickly and cost-effectively. A partner with multiple fulfillment centers can help reduce shipping times and costs.

• Scalability: Look for a partner who can scale alongside your business as it grows. This includes handling seasonal spikes, promotions, or expanding product lines without compromising service quality.

• Technology and Integration: The fulfillment partner should work seamlessly with your ecommerce platform. This should include inventory management, real-time order tracking, and automated shipping updates.

• Services and Accuracy: Evaluate their order accuracy rate, delivery speed, and overall service level agreements (SLAs). High order accuracy and reliable delivery times are crucial for customer satisfaction and repeat business. Ensure the partner offers a comprehensive range of services, including warehousing, picking and packing, shipping, returns management, and customer service.

• Cost Structure: Understand their pricing model, including storage fees, pick and pack fees, shipping costs, and any additional charges. Look for transparency in pricing to avoid hidden fees that could affect your margins.

• Security and Compliance: Check if they comply with relevant regulations and standards, such as GDPR for data protection or certifications like ISO for quality management.  

What Makes a Successful Ecommerce Fulfillment Network

No matter what fulfillment method you choose, a cohesive and seamless fulfillment network is essential. Even in-house distribution should be focused on creating a finely tuned system that enhances efficiency, reliability, and customer satisfaction at every step. By understanding how to strategically set up your fulfillment network, you can transform it into a powerful growth engine for your brand that is able to adapt, giving you a distinct competitive edge.  

These factors are essential to consider when evaluating potential partnerships or services. If a fulfillment provider isn't aligned with these key elements, it is unlikely to succeed and may not be a reliable choice for your brand.

• Technology and Automation: Use a robust Warehouse Management System (WMS) and Order Management System (OMS) to automate inventory management, order processing, and picking and packing operations. Advanced technologies like robotics, AI, and machine learning can enhance speed, accuracy, and efficiency across the network.

• Centralize Analytics: Utilize a centralized data platform that aggregates data from all touchpoints across the fulfillment network. This enables real-time visibility into inventory levels, order status, and performance metrics, allowing for proactive decision-making and rapid response to changes in demand or supply chain disruptions.

• Inventory Placement: Use data-driven insights to strategically position inventory across distribution centers based on demand patterns, customer locations, and shipping preferences. This minimizes shipping distances, reduces transit times, and lowers costs, contributing to a more seamless fulfillment process.

• Multi-Node Fulfillment: Operate multiple distribution centers in key regions. This decentralized approach allows for faster delivery to end customers, reduces shipping costs, and mitigates risks associated with disruptions at a single location.

• Seamless Integration: Integrate all technology platforms, including sales channels, inventory management, shipping carriers, and customer service tools, into a single cohesive system. This ensures smooth data flow, minimizes errors, and improves overall network coordination.

• Strong Partnerships: Form strategic partnerships with multiple carriers and third-party logistics providers (3PLs) to offer diverse shipping options, negotiate competitive rates, and ensure reliable delivery. Working with multiple carriers helps mitigate risks related to carrier delays or capacity issues.

• Standardize Processes: Develop standardized operating procedures (SOPs) for all fulfillment activities, from receiving inventory to order processing and shipping. Consistent processes across locations ensure uniformity in service levels, reduce errors, and improve efficiency.

• Omnichannel Fulfillment: Adopt omnichannel fulfillment strategies such as buy online, pick up in-store (BOPIS), ship-from-store, or curbside pickup to offer flexibility to customers and leverage inventory across various channels. This can help balance inventory, reduce costs, and enhance the customer experience.

Inside Spreetail's Fulfillment Network

With seven regional and two international fulfillment centers powered by our in-house software network, Spreetail is designed to serve brands no matter where their customers are. Here, we share the valuable insights we've gained in building each center for success and scalability.

As we expand our fulfillment capabilities, our goal is to maintain next-day delivery while preparing for same-day service in the future. This demands a strategic approach that maximizes the performance of our technology, workforce, and leadership. By aligning with our brand partners and fostering a shared path for growth, we create a unique fulfillment network that truly stands out.

• Training for Excellence: Our leadership team undergoes 2-3 months of rigorous training, guided by experienced staff from existing Spreetail fulfillment centers. This training covers safety standards, inbound and outbound processes, inventory management, and includes regular coaching sessions and team meetings to stay aligned with new developments.

• Maintaining Consistency: For our brand partners, the transition is seamless. Orders are fulfilled from the closest center to the customer, ensuring minimal disruption and maintaining the high service levels our partners expect.

• Planning for Scalability: We've mastered the art of managing lead times and assessing needs to support Spreetail's continued growth. Each fulfillment center brings refined processes and precise planning, covering everything from the number of sorters to the layout of docks and doors, ensuring our team is always prepared for success.

Looking ahead, Spreetail is poised for continued expansion both within the business and the needs of our partners. To learn more about how our ecommerce fulfillment network can drive growth and reduce costs for your brand, you can contact one of our buyers or see how we transform brands like Clam Outdoors by transitioning them from a 1P to 3P model – achieving a 243% increase in top-line order dollars along the way.