The age of ecommerce has brought about a new wave of business growth for brands across virtually all industries. Ecommerce is now the preferred form of shopping for 68% of consumers. And at the core of ecommerce growth is being able to fulfill orders. Without that practice, businesses will struggle to thrive in the digital age.
Order fulfillment is basically delivering on the promised product someone pays for online. It involves taking the order, packaging it, and shipping it out to buyers. When it comes to fulfillment, people have been wondering whether ecommerce fulfillment services or dropshipping is a better option. In this article, we take a look at these two options and compare.
Order Fulfillment versus Dropshipping
So what is order fulfillment and what is drop shipping, and how do they differ? Order fulfillment is when an ecommerce company works with an order fulfillment and shipping company and takes care of inventory. Dropshipping is when a manufacturer handles the shipping process, and sellers simply promote products on their channels. In essence, a drop shipper has no inventory. All products stay with the manufacturer or supplier, and the manufacturer directly ships to a customer.
One good order fulfillment example is Fulfillrite, a trusted order fulfillment company that has a 99.6% on-time shipping rate. An ecommerce company or brand that works with Fulfillrite will basically integrate the service with their store so that they can take orders and pass them on to the fulfillment provider to ship to their clients.
Normally, a seller would send a batch of products over to the fulfillment company so that they can send products to your customers as soon as they come in. These online order fulfillment services make it all highly convenient and optimal to deliver products to customers in the soonest time possible.
7 Reasons Why to Choose Order Fulfillment Over Dropshipping
Generally, people might think that dropshipping is the all-in-one solution for any e-commerce business. While dropshipping does have its moments of glory, it’s not always better. Here are some instances where order fulfillment might actually be a better option.
1. Control your own fulfillment
The process of order fulfillment in logistics isn’t always a one-size-fits-all ordeal. Some businesses and sellers want some control over their fulfillment. These include instances such as:
- When you want to customize your shipping;
- When you want to add freebies to your product;
- When you want to ship to underserved locations;
- When you want to try a different delivery company;
- And many other instances.
In these circumstances, there is little to no control over the fulfillment process when you’re dropshipping products. Going for an order fulfillment service will be a better option if you want that level of control over your fulfillment.
2. Control your suppliers
On top of streamlining order fulfillment, some sellers might actually want more control over their suppliers. Let’s say you’re selling iPhone cases in your business. You run into a better supplier with superior products and better prices. If you’re dropshipping, you’re tied up with your manufacturer, so you can’t switch suppliers.
You have flexibility when your order fulfillment is independent of your manufacturer or product supplier. That means you can try out other suppliers or even have multiple ones in the likelihood that one supplier becomes unavailable.
3. Sell your own products
Let’s say you’re a business with your own product line. In essence, a dropshipping model wouldn’t work because manufacturers use it for marketing their products. So if you’re developing your own line of products, an order fulfillment service will be your best bet.
Making your own products makes sense if you have an innovative spin or creative idea that no other manufacturer can replicate. Let’s say you want to create your own line of skincare products that provides better results at a lower price. In scenarios like these, you’ll need to work with an order fulfillment service as no manufacturer will offer to dropship your original products.
4. Get better profit margins
Working with an order fulfillment provider might be more expensive in some cases. But there are also scenarios where it might actually be more economical to work with an order fulfillment company than a drop shipper. The major factor there is location.
If your dropshipping manufacturer is somewhere in the west and you’re selling to an Asian market, then shipping costs will be more expensive for you. The key is to look for an order fulfillment service that has a warehouse and shipping company closest to where your customers are.
5. Customize your packaging and offers
Sometimes, you might want to try order fulfillment strategies that could drive more sales. Some of those strategies might be a buy one, get one free offer or a discounted rate on your products. In cases where you’re dropshipping products, you rarely have this option as the manufacturer dictates the prices or has some control over how much of a discount you can offer. Then there’s the issue of not being able to provide free shipping if your drop shipper doesn’t allow it. Given that 74% of shoppers say that free shipping is important when buying online, not being able to give free shipping would be a massive loss of opportunity.
In some cases, you might also want to have more control over the packaging of your products to give them a more customized feel. This is now possible when you work with an order fulfillment service that can just receive your products all packaged up with your brand’s personality written all over it. When doing this, you might want to consider speeding up your workflow with a project management system to keep your business optimized. Check out this Infolio review to see if a task management tool would help you with that.
6. Get and give real-time shipping updates
During the holiday season, shipments and logistics can get quite busy for big manufacturers. As a result, some of your customers might get their shipments late. Often times with dropshipping companies, vendors are left in the dark along with their clients. So when someone reaches out to support and asks for an update on a late parcel, there’s very little information to give.
Working with a dedicated order fulfillment service with a shipping update option gives you more information to pass on to your customer. That provides more peace of mind and improves customer satisfaction. That way, you delight your customer and encourage them to buy from you again and again in the future.
7. Control your own inventory
When a dropshipping company runs out of stock, your business suffers. But when you have your own inventory, you dictate the volume of products. A business that wants to have more control over its inventory might want to consider order fulfillment over dropshipping.
Ensure that you have an inventory system to keep track of your inventory to avoid deadweight loss due to threats like theft, mismanagement, or damage. Here’s a list of the best free inventory software for ecommerce brands and companies.
Getting into Ecommerce
By 2025, ecommerce will make up close to a quarter of all retail. It’s not too late if you aren’t joining the e-commerce game yet. But when you do start selling online, you’ll need a reliable order fulfillment process and partner to ensure that your company delivers on its promise and builds more trust amongst your loyal following. This will ensure that your business keeps growing over the long-term.