- So when your product ships from overseas you basically do not touch them or handle them at all when you use fulfillment. You pay a monthly fee per pallet that covers the storage and a freight charge for shipping the product out. Most fulfillment businesses ship a lot of packages and are willing to pass some of the savings on to you.
- So basically you do not handle your product at all from the time it leaves the manufacturer to the time it arrives to the customer. This in itself is much better for most business owners in the long run.
- You have to individually crunch your own numbers to see if it will work for you. You also need to take into account that your product needs to be a complete unit for the fulfillment scenario to work best. If you have to combine products or do any type of assembly, it takes away from the profit scenario and increases costs.
- Typical storage charges can be from $8 per pallet to $20 per pallet, depending on where they are stored.
Shipping costs
Another factor is shipping costs. You do not want to pay full retail shipping to your fulfillment company that is just wrong. A 20% discount to new customers is not unheard of with a decent volume of shipping. If you have a fulfillment center centrally located in the country, then you can ship to either the west coast or the east cost with reasonable costs. If your center is on either cost, you have higher costs when sending to the opposite coast. For example, if your fulfillment is in California, and you ship to New York, then that is going to cost you more to send a box than it would to Arizona. Having an office centrally located is a good advantage over time.
Summary
Personally I have done both types of shipping discussed in this article. I may have switched to fulfillment sooner, had I known some of the details discussed here. Depending on what type of ecommerce store you run, it may be necessary to use a combination of both types. Larger operations use more than one fulfillment center to handle shipments. Usually they have one on each coast to take advantage of the shipping cost savings. Finding the right system for you involves a bit of homework and some brainstorming. This is a small price to pay for not being held hostage to all the details of shipping your product to your customer.
Ecommerce Shipping and Fulfillment Part 1
Ecommerce Shipping and Fulfillment Part 2
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