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Fulfillment Through Outsourcing

Looking to expand? Outsourcing orders might just do the trick.

Renee Boulet-Mazer had shopped all around the Denver area for a fulfillment house to warehouse and ship her Healthy Shelf Inc. products. Founded in 2004, the company manufactures a multifunctional shelf that dispenses disposable towels and wipes. The shelves are sold to suppliers in the hospitality, restaurant, medical and home-improvement industries. Leery of the seemingly endless costs she came across in her research, Boulet-Mazer, 40, says, "I thought my first container of products would cost me thousands of dollars per month." Thankfully, after networking at a home and housewares trade show in 2005, she found a fulfillment house that met all her needs: Innovation Group Services in Iowa. The company was EDI-compatible--it could receive purchase orders safely--and it was highly recommended to her. For a set percentage of her gross sales, it warehouses and ships her products and provides detailed sales information. And that allows Boulet-Mazer to focus on marketing her Thornton, Colorado, company, which projects $1.5 million in 2006 revenue.

Researching, networking and following up on referrals are exactly what startups should do when considering a fulfillment house, says marketing expert Chip Eichelberger, author of the upcoming book It Just Might Be You! Ask questions such as: How much will each service cost? Are they EDI-compatible? What specific services do they offer? What software do they use? Can you quickly check inventory, customer records, etc., online? How long will the contract be? Tour the facility, and ask for referrals and references from their current clients.

To find a fulfillment house, find an entrepreneur who is already using one. "It's all recommendations and word-of-mouth," says Eichelberger. "Don't pick [a company] until you've talked to three or four happy customers." You can also check out the online directory from the Mailing and Fulfillment Service Association.

Remember, you're picking a partner. "Fulfillment houses will do almost anything for you--you want to be clear on what you want," Eichelberger says. "The best ones have the attitude that they want to help your startup look like Barnes & Noble."

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This article was originally published in the June 2006 print edition of Entrepreneur with the headline: Total Fulfillment.

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