Table of Contents
More Fulfillment Content
Get the latest e-commerce industry news, best practices, and product updates!
Table of Contents
More Fulfillment Content
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Get the latest e-commerce industry news, best practices, and product updates!
Table of Contents
Share This
More Fulfillment Content
Get the latest e-commerce industry news, best practices, and product updates!
New avenues are opening up for merchants to expand their sales channels. Explore more about multi-channel fulfillment and how it can benefit your business.
What is Multi-Channel Fulfillment?
Multi-channel fulfillment (MCF) enables merchants to sell through various sales channels and lets the marketplace manage the packaging and shipping aspects for them. Furthermore, merchants can sell products stored at a marketplace’s fulfillment center.
Multi-channel fulfillment has become a convenient option for merchants who already own an e-commerce website. It allows them to use the unparalleled functionalities and experience of global multi-channel fulfillment centers and ship products worldwide. Merchants can use this service for individual and bulk listings.
Why Use Multi-Channel Fulfillment (MFC)?
Diversifying your sales channel can prove to be a gamechanger in the e-commerce domain. Having your e-commerce business present and your products available on multiple platforms can create a win-win situation for you and your customers since customers have become more reliant on the convenience of online shopping. Let’s explore some of the significant benefits of opting for an online marketplace platform with a fulfillment warehouse.
Multiple Shipping Options
Merchants get multiple shipping options for all their inventory with warehouse fulfillment service providers. Furthermore, an e-commerce fulfillment warehouse enables merchants to safely store their products, eliminating the need to contact any third-party warehouses for fulfilling their orders.
More Sales and Revenue
Marketplaces have become the search engines for looking up products, reviews, price comparisons, etc. Customers use online marketplaces more than they use Google to start their product-buying journey. Thus, the opportunity to increase sales and revenue is an apparent benefit of multi-channel fulfillment. You offer customers easy access to your products and the freedom to choose the most convenient option to purchase.
Improved Brand Visibility
A multichannel sales approach combined with a tried and effective marketing strategy can make your brand stand out in the competitive e-commerce industry. Moreover, multi-channel fulfillment exposes your products to a broader target audience. Targeting marketing campaigns, if done correctly, can make customers remember your brand, spread the word about your brand, return for repeat purchases, and more.
Outsmart the Competition
Businesses that use a multi-channel fulfillment warehouse facility can retain more customers than those with a limited sales approach. The best way to move forward is an in-depth analysis of your competitors to understand which channels they are using and which they are not and whether you can employ the latter to your advantage. It could be your chance to capture the market share untouched by your competitors.
Enhanced Customer Experience
Adopting a multiple sales channel approach can help you deliver a refined and improved customer experience in several ways. These include enabling customers to discover your brands through any device and platform, multiple payment and shipping options, etc.
Streamlined Warehouse Fulfillment
When businesses decide to go multichannel, they have to be prepared for more warehouse fulfillment strategies in the future. Businesses gain peace of mind by partnering with third-party fulfillment warehouse providers. Furthermore, professionals manage business inventory levels, order fulfillment, and shipping. More importantly, it reduces the risk of backorders and stockouts and eliminates the confusion arising from listing products on multiple platforms.
Multi-Channel Fulfillment: Fulfill Orders for Your Sales Channels
Multi-channel warehouse fulfillment facilities help you fulfill orders across multiple sales channels. It’s effortless to sign up for the majority of multi-channel fulfillment programs. Merchants can follow the below steps:
- Ship your inventory to multi-channel fulfillment centers
- Customers shall place orders on your e-commerce sales channel
- The multi-channel fulfillment center fulfills all orders at 1 business day (Priority), 2 business days (Expedited), or 3 to 5 business days (Standard), starting from when the order ships.
Calculate Your Fulfillment Costs on MCF, a Typical 3PL, and Deliver
It’s crucial for merchants to understand how to calculate fulfillment costs despite the complexity multi-channel fulfillment solutions bear. Furthermore, it can help merchants better decide which products to store with different fulfillment centers to reduce costs. Merchants can also harness more leverage if they understand how the fulfillment costs accrue, what each cost means, how to plan your budget, and how to charge customers accordingly. Most warehouse fulfillment centers charge similar fees. However, the fees can vary depending on the warehouse size, the order volume, the size and weight of products, location, and other factors. The majority of fulfillment centers don’t have a standard fulfillment cost. Thus, business owners might have to figure out which one works best for their business. Storage and warehousing form a major portion of the fulfillment costs.
Understanding the 3PL Bill
Order fulfillment warehouse costs can vary significantly for 3PLs since some combine all costs while others charge for each movement made. Generally, 3PLs have a complex fee structure so merchants shall confirm their costs upfront.
Merchants should confirm the following fees before getting an invoice:
- Set up
- Storage and warehousing
- Inbound shipping and receiving
- Box and packaging
- Label printing and order insert
- Pick and pack
- Shipping
- Returns
- Work orders
- Account management
3PL Fulfillment Fees
Set Up Fees
It is a one-time charge, including software, infrastructure costs, and training for understanding the functionality of 3PL fulfillment.
Inbound Shipping And Receiving
The fees include receiving shipments from the warehouse or manufacturers. Furthermore, rates and services might vary but you are most likely to be charged an hourly rate depending on the number of employees required to help upload and store your products. Some 3PLs charge fulfillment fees at a flat rate, varying per order to per pallet to per item.
Storage And Warehousing
Most 3PLs charge merchants based on the volume of space their pallet or product is using. Merchants can expect to be charged by square meter, square foot, or pallet.
Box And Packaging
As the term suggests, box and packaging fees are the actual costs of packaging the boxes merchants will be using. The fulfillment costs can vary depending on the size and customization.
Understanding the Delivery Bill
The fulfillment costs structure is divided into the following two fees, all-inclusive:
Storage Fees
The storage fees for warehouse fulfillment centers are calculated per cubic feet per item per month. Furthermore, the storage costs for old inventory go up. However, the rise in storage fees is not as drastic as for extensive multi-channel FBA programs.
Fulfillment Fees
The all-inclusive fulfillment fee covers all aspects from when your products are received to when your products reach your customers.
Working within Multi-Channel Fulfillment
Multi-channel fulfillment works similarly to third-party logistics (3PL) service providers. And it’s quite straightforward. Merchants store their products at the warehouse fulfillment centers and their fulfillment is taken care of.
Store Inventory at the Fulfillment Centers
Major players in multi-channel fulfillment centers have multiple fulfillment warehouses around the world. You can send your products to the multi-channel fulfillment provider and they decide in which warehouse your products will be stored.
Orders Placed on the Website are Received by the Fulfillment Center
When you integrate your website with a multi-channel fulfillment solution, they receive all orders placed on your website.
The Orders are Picked, Packed, and Shipped
The multi-channel fulfillment center shall fulfill the order based on the selected and available delivery options.
Shipping through Multi-Channel Fulfillment
The shipping process almost completely depends on the customer’s preferences, instead of the seller. Multi-channel fulfillment offers three options for customers to choose from, while the seller only passes the required information to multi-channel fulfillment centers.
The three options available to customers include the following:
- Next-day shipping
- Two-day shipping
- Standard shipping
With the standard shipping option, customers can expect to receive their orders in a week since there is one day for processing while three to five days are set aside for shipping leeway.
Multi-Channel Fulfillment Returns
When you partner with a multi-channel fulfillment solution provider, you can either choose to enable customers to return products to the fulfillment center or send it directly to you. Most multi-channel fulfillment companies assist merchants in repackaging and stocking the product for sale and it works for the most part. However, if you are selling products with relatively short shelf life or perishable products, it’s more sensible to ask customers to make returns to your address. It can also help you in avoiding paying a fee later for product removal.
Canceling Multi-Channel Fulfillment Orders
Most multi-channel fulfillment centers require merchants to cancel orders within a few minutes of the order being placed, while the status of the ordered products has not been changed. Furthermore, most multi-channel fulfillment centers allow merchants to cancel orders from the ‘manage orders’ section.
The cancellation of an order for an out-of-stock item is handled differently. Most multi-channel fulfillment centers mark the status of orders as ‘unfulfillable’ if they cannot be completed due to a lack of stock. The order will remain in the same status until the item is restocked, at which point a new order can be placed and completed.
International Multi-Channel Fulfillment Orders
Merchants will have to look for international multi-channel fulfillment centers to ship their orders globally. However, international multi-channel fulfillment is quite limited since international shipping often leads to extended delivery times. Therefore, if your business relies on international customers and sells products other than media products, MCF is not a good choice.
Omnichannel Fulfillment vs. Multi-Channel Fulfillment
| Omnichannel Fulfillment | Multi-Channel Fulfillment |
|---|---|
|
It is a unified approach to inventory management and order processing. |
There is a separate inventory for each sales channel. |
|
It puts the customer at the center of the experience. |
It puts the products at the center of the shopping experience. |
|
The customer journey spreads across several sales channels. |
The customer journey is restricted to one channel. |
|
Omnichannel fulfillment uses an integrated sales and marketing strategy. |
Multi-channel fulfillment uses distinct sales and marketing approaches for different channels. |
Multi-Channel Fulfillment Pros and Cons
All merchants must consider the downsides of multi-channel fulfillment before opting for the service. Here are some of the most prominent disadvantages of multi-channel fulfillment:
- The multi-channel fulfillment functionality is not applicable to all marketplaces.
- Some multi-channel fulfillment centers have strict restrictions on certain products, including perishable, flammable substances, batteries, or aerosol products.
- Most multi-channel fulfillment programs don’t support returns.
- Most multi-channel fulfillment programs come with high fees and small service coverage.
- Merchants using multi-channel fulfillment programs might often experience limited shipping options to fulfill orders from the marketplace.
Auto Multi-Channel Fulfillment
Merchants can configure an automated inventory sync between their e-commerce stores and multi-channel fulfillment solutions in just a few clicks. Furthermore, merchants can also leverage the single and multiple package sync. Here are some of the most prominent features offered by auto multi-channel fulfillment solutions:
- Order fulfillment
- Order sync
- Inventory sync
- Product bundling
- Preferred delivery options
- Relentless customer support
Conclusion
If chosen wisely, a multi-channel fulfillment approach can help merchants capitalize on customers’ excessive reliance on online shopping via different channels. However, merchants should consider several factors, including cost, product sizes, order volumes, etc., before finalizing the multi-channel fulfillment program.
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FAQs
A multi-channel fulfillment program uses fulfillment warehouses to store products and fulfill orders in a country and across borders.
Multi-channel fulfillment (MCF) is the method via which you can sell a wide range of products through various sales channels, with the multi-channel fulfillment center handling the packaging and shipping aspects for you.
The seven steps of the order fulfillment process include: receiving inventory, storage, order picking, order packing, shipping, delivery, and returns.
- Define the fulfillment process and customer strategy simultaneously
- Leverage a flexible multi-channel fulfillment solution
- Align analytics and data with your multi-channel fulfillment process
- Distributing your products across multiple selling platforms can spread your business’s resources too thin. Furthermore, employees can get overwhelmed and might experience a severe impact on their health, performance, and productivity.