A huge part of Amazon’s success has been its two-day (and oftentimes free) home delivery. Consequently, other retailers and third-party providers have stepped up their game to give eCommerce sellers more fulfillment options.
No matter how you sell, getting your product into a customer’s hands quickly, efficiently, and cost-effectively is the most crucial part of your supply chain. In fact, according to some experts, perfect order fulfillment is the goal of any supply chain.
The Supply Chain Council describes perfect order fulfillment as the percentage of orders that include the correct product:
- Delivered to the right place at the right time.
- Packaged correctly and in the right condition.
- Delivered in the right quantity with the correct documentation.
- Given to the right customer.
- With the right invoice.
Competition Breeds Fulfillment Options
Last year, Amazon’s logistics service delivered more than 2 billion units globally on behalf of sellers. As a result, Fulfillment by Amazon allowed sellers to fulfill orders around the globe while giving Amazon a huge share in third-party logistics shipping.
Amazon’s logistics capacity has opened the door to competition. This gives businesses more fulfillment options to get products into their customers’ hands. Here are three main options companies can use.
- Traditional 3PL Fulfillment
Third-party logistics providers have been around for ages. They combine warehousing and logistics expertise to store, pick, pack, fulfill orders and handle returns. These companies often have specialties in particular verticals and will have special relationships with couriers, and trucking and shipping companies. And these companies add fulfillment mastery to their marketing. A big example of this is FedEx, which this year rolled out FedEx Supply Chain to provide fulfillment services for SMBs in the US. - Branded Logistics
Amazon isn’t the only eCommerce business to make logistics its forte. Retailers like Wayfair offer their customers drop shipping services to get a product from the supplier to the customer’s door. But similar to the Amazon model is Newegg, the electronics-focused online retailer which recently rolled out its own branded fulfillment solutions. Newegg Logistics includes transportation management, promotional material inserts, pre-shipment assembly and secondary product inspection for suppliers, as well as reverse logistics to manage returns. - Third-Party Fulfillment
To be fair, this category is not that different from traditional 3PLs. But while fulfillment solutions do tend to operate their own warehouses, their emphasis falls on getting the product to the customer, as opposed to warehousing. Shipwire, for example, uses its own warehouses in combination with other 3PLs to coordinate fulfillment for customers, and leverages relationships with couriers to get products to the customer’s door.
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