Updated by Neil
Even though it is not practically an import component from China, dropshipping comprises freight and order fulfillment. Before you decide on that system, though, you should know the advantages and disadvantages of your clients’ other shipping methods.
Overview of Order Fulfillment Options
This chapter gives us an insight into the different methods for e-commerce order fulfillment. It also focuses on two essential fulfillment options, namely Amazon FBA and International Shipping.
Order Fulfillment Options
Direct Fulfillment: This is also known as Self-Fulfillment. Here, one is entirely in charge of all the particulars of fulfillment, like storage, order-taking, invoices, shipments, etc.
Third-Party fulfillment: Here, a ‘third-party logistics’ (3PL) provider is in-charge of stock storage, handling or ‘picking and packing’ of orders that are coming in, and the shipping of the orders for you.
Drop Shipping: Here, you are in direct touch with the supplier to deal out their products. You are in charge of taking orders from clients, and the supplier is in charge of stocking, packing, and delivering the shipment to them.
Cross-Docking: Some 3PLs provide this resource. They are in charge of the warehouse, where the products are shipped for the sale-fulfillment, which essentially scraps out the stage comprising warehouse storage from the supply chain. The demand for this particular method is currently high among crowdfunding and flash sales of e-commerce companies.
The decision about one’s method of fulfillment is dependent on one’s final goals.
If your enterprise is at its starting point and handling a small number of orders monthly, then the best option to go with, to stay in touch with your business, would be Direct Fulfillment. It will also enable you to learn as you grow.
Redistributing your management to 3PLs would be the option to go with if your business starts to pick-up. It will help you with time management and let you concentrate on the more critical aspects.
If you want to check what you’re getting into without staking a large sum, managing the stock, or working with logistics, then the Drop Shipping is the method for you. You will be able to sell various commodities, better understand your targeted demographic, and sharpen your skills.
A few e-commerce sellers also simultaneously take up more than one method of fulfillment. For instance: Using Drop Shipping for the commodities that have a higher margin, 3PLs for things that have a lower margin and are higher in quantity, Direct Fulfillment for the fresh products, and using Cross-docking for instances like flash-sales.
Fulfillment by Amazon
A very significant example of 3P fulfillment for e-commerce sellers is Amazon FBA, the reason being that it gives way to the ‘Prime Shipping Network.’ On ordering with Prime, a customer gets deals like ‘free two-day shipping’ or ‘free standard shipping.’ These deals undoubtedly give the sellers an advantage in selling their products.
Amazons 24*7 available customer service and return regulation is another advantage of using Amazon. This reduces a lot of the seller’s load concerning the customer service aspect.
Also, because FBA has a reputation for being reliable, it gives the customers a sense of security and trust in the idea that the sellers’ association with them will be okay.
Nevertheless, Amazon has exceptionally high requisites to permit products into their warehouses. These requirements are touched upon in the chapter ‘Amazon Shipping and Receiving Requirements’.
Undertaking the enterprise of selling your products to customers all around the globe can initially seem unnerving. Still, it is a fantastic way to take your work to a higher level.
These days you will come across many customers who shop items from markets across the world. New businesses can grab this chance with devices that give cheaper costs for shipping across borders. That also aids in making the system of fulfillment and delivering shipments more efficient.
It is known that the restrictions entailing the shipping of products overseas are less stringent than those regarding imports. However, before you undertake cross-border shipping, you should familiarize yourself with the following:
- Shipping Insurance
- The eligibility of the product to be shipped by an airplane.
- Whether or not the markets you have targeted have restrictions on the import, duty, or tax on the product you are shipping.
- Whether or not the countries you are delivering to have any special conditions for shipping. For instance: A requisite for the receiver to show some personal documentation before getting the package exists in some countries (Russia, India, etc.) So you have to establish another stage in the fulfillment in those particular countries so that the customers can receive their packages.
- In some countries, for example, Brazil, you might also have to arrange for slow delivery times.
- When you are deciding on a courier service, you have to keep in mind what you require from them, like delivery time, pricing, efficiency, tracking, quality of general service, and your final goal regarding the shipping.
There are four different methods of order-fulfillment.
A significant third-party service for order-fulfillment is Amazon FBA, which has excellent reach and various benefits. It does, however, have exceptional requisites.
Another significant scope for expanding the customer base is International Fulfillment.