Fulfillment

While any company selling products directly to consumers throughthe mail must deal with fulfillment, this term is most oftenassociated with e-commerce. Once your website is up andrunning–and you’re getting tons of orders–you need a way topromptly fulfill and ship those orders. Entrepreneurs can eitheroutsource the fulfillment and distribution process or set it upin-house.

Full-service fulfillment companies offer up an end-to-endsolution: They take your products from warehouse shelves, packthem, hand them to shippers and then send an automated e-mailresponse to your customers to let them know their packages are intransit. They can also handle your credit-card processing, supplycurrent inventory levels to your website, reorder products, offercall-center services, send notices of shipping and handle returns.There are literally thousands of these companies to choose from,but experts say the best way to find one that suits your needs isby word-of-mouth. Ask computer-savvy friends or talk to theemployees who manage your website and ask them for referrals.

If you’re using your hosting company for shopping cart andcredit-card functions or doing this in-house, you can just use someof the fulfillment companies’ options–such as pick-and-pack,returns processing and customer service support. If you’re shippinga small number of orders, you may want to fill your ordersyourself.

To do this, you’ll want to use the major package deliverycompanies–Federal Express, UPS or the U.S. Postal Service, sincethey’re considered the most reliable. All these carriers offerdownloadable software on their websites that allow you to trackcustomer orders and also begin shipping immediately. However, thedownside is that you’ll either have to go to your local post officeto ship the packages or schedule pickups with whichever deliverycompany that you eventually choose.

So should you outsource? One e-commerce distribution andlogistics expert advises that outsourcing to a fulfillment companyonly makes good financial sense if the entrepreneur has more moneythan time. If you have no cash to spare, then you should do ityourself. But if you can make more money by spending your time onother things, you should look to outsourcing.

Before you choose a fulfillment company, however, make sure thatit wants the business of a small company (many do not) and thatit’s reliable. And no matter what type of fulfillment operation youset up, it shouldn’t cost more than 10 percent of sales, plus theactual shipping costs.