Fulfillment centers are popping up all over the world as the e-commerce fulfillment business grows quickly. It can be hard for a small business to choose the best fulfillment center for their online business.
Costs, services, minimum requirements, and account management are all very different between suppliers, so it takes a lot of research to find the best one. So, what are the best fulfillment centers for small businesses? Let’s find out!
What is a fulfillment center?
A fulfillment center is a place where a third-party logistics provider (3PL) manages your warehouse, fills orders, and coordinates the last-mile delivery of your products to the client. You send your products to a fulfillment center and set up a way to let them know about orders, ideally through your e-commerce platform or another order management system. Many 3PL providers also have custom software for this.
With a fulfillment center, you can grow your business without having to pay for warehouse space or more employees. The logistics provider will store, pick, package, and ship your products from the fulfillment center, and most will also handle returns.
What Is a Fulfillment Center? – What You Need to Know
Fulfillment Center vs Warehouse
“Warehouse” and “fulfillment center” are often used interchangeably. Because many 3PL companies offer small storage as part of their fulfillment center services, the phrases could be confusing.
Both are places where you keep your stock, but that’s about all they have in common. The easiest way to think about the differences here is in terms of long-term storage vs. short-term storage.
- Warehouse: A warehouse is a place where you can store your goods for a long time. This is where you would keep track of your inventory if, for example, you were personally filling orders. Most warehouses will help you get your product and store it. Some will even let you rent space for fulfillment. But in the end, it will be up to you to choose, pack, and ship the items.
- Fulfillment center: A fulfillment center will store your items, but its main job is to get them into the hands of customers. Your items should come and go from a fulfillment center all the time, if possible. Some fulfillment centers will charge you extra if your goods have been sitting on their shelf for longer than a certain amount of time.
- Then, you can easily decide which is better between a Fulfillment Center and a Warehouse based on how it will be used.
Things to think about when picking a fulfillment center
To find the right fulfillment center for your small business, you may need to think about the following:
A fulfillment provider should offer a service that is affordable and doesn’t have any extra costs or hidden fees. The prices they charge should be fair for the services they offer. A small business or new business should look for service providers with lower prices and no minimum order requirements.
The location of the fulfillment center is also one of the most important things to think about. In terms of price and time, this is very important. So, you should check to see if the service provider has more than one place to store and deliver goods. This makes sure that your shipping and delivery work well and meet your customers’ needs.
You should put your warehouse where there are more orders, so you can keep your products there and get orders to customers quickly. Because of this, it’s important to look at your data and do research before choosing a warehouse site.
The user interface (UI) of your fulfillment services software should not only be simple and easy to use, but it should also give you accurate data and detailed information about your inventory and shipping process.
Also, the software should be able to connect to a large number of popular sales channels and platforms. This helps you get the word out about your products and sell them to more people.
Damages & Insurances
Another thing to think about is how your fulfillment provider handles problems like damaged orders, wrongly shipped orders, and returned orders.
Some businesses include insurance in their services, while others don’t. They will expect you to get extra insurance, especially if your items are fragile or have a high price tag. If your company’s monthly fees include this service, they should be in charge of overseeing and managing the whole process, from the time you get the orders until they are delivered to the people who ordered them.
Make sure the fulfillment center you choose is safe and has a good security management system in place for storing and shipping your inventory. This includes both inside and outside video surveillance as well as full inventory support and tracking from unloading to packaging to shipping.
Best Fulfillment Centers for Small Businesses
The best fulfillment centers for small businesses offer a good mix of cost, experience, and quality assurance. Also, e-commerce fulfillment companies make it easy to connect to your online store, send orders to the fulfillment company, and keep track of your stock from an online dashboard. Let’s look at who they are in more depth.
The Shopify Fulfillment Network is one of the best fulfillment centers for small businesses because it has a large network of locations, low prices, and works with Shopify, which is one of the most popular eCommerce platforms for small businesses.
But there are some things that can’t be done. For now, Shopify Fulfillment doesn’t work with any companies outside of the United States. This is the biggest problem. They only have one building outside of the United States. Even though this is the case, Shopify can still ship to most other countries.
Shopify Fulfillment charges for storage (including custom projects) and the process of choosing, packaging, and shipping.
Even though the Shopify website doesn’t have a price list, it’s cheap for all small businesses because the price depends on how much is sold and how much inventory needs to be stored.
Here are some details about how much it costs to use Shopify Fulfillment:
- To get a custom quote, you need to get in touch with Shopify and fill out a simple application.
- Wholesale orders have their own set of prices.
- You can choose to be charged for each order that is filled.
- Shipping costs depend on the shipping company, where the package is going, and how big it is.
- Shopify charges a monthly fee to store your inventory.
- You’ll need to talk about specific projects if you want your budget to take them into account.
ShipBob is also one of the best places for small businesses and new companies to get their orders filled. Since it began in 2012, the company has grown from a small start-up of $5,000 to a $10 million sales volume in 2022.
ShipBob is a great solution for small businesses that want to grow, expand, and make money. Most of its customers run small online businesses that sell things like cosmetics, vitamins, and other goods. So, ShipBob made sure that the whole process is easy and straightforward.
ShipBob doesn’t share prices, like a few other e-commerce fulfillment centers, so you’ll have to call them to get a full quote. ShipBob did, however, give their typical prices for some common fulfillment tasks:
- No matter how many boxes or pallets are in a shipment, it costs $35 to receive it.
- Monthly storage costs are $5 per bin, $10 per shelf, and $40 per pallet. Each pallet can hold up to two SKUs.
- Orders that need to be picked up and packed include shipping costs in the total price.
- Basic shipping boxes and packing materials are free, but you can pay extra for packaging services that are tailored to your needs.
- 100 orders per month, or an average of three to four orders per day.
ShipMonk is like ShipBob in that it works quickly with all e-commerce platforms, has a beautiful dashboard for automating inventory, and has one of the easiest setups for starting fulfillment operations.
ShipMonk is a third-party logistics company that also offers Amazon FBA (Fulfilled By Amazon) prep services. These services help small businesses get started with FBA. We think it’s one of the best fulfillment centers for small businesses because it’s easy to use on the web, connects quickly to e-commerce systems, and has clear prices.
Standard fulfillment rates depend on the project, but ShipMonk’s website has some estimates:
- Each order costs $2.50 to pick. This is for orders of up to 500 per month. When you place more orders, the price per order tends to go down. After your limit, each pick will cost you $0.50, and branded inserts will cost you $0.20.
- Each return costs $2.00 to process. A $0.50 fee is added for each extra item in the return.
- Storage: The cost of storage depends on what kind of storage items are used. For example, each small container costs $1 per month. The cost to rent a medium bin every month is $2. You can get a pallet for $20 per month.
- ShipMonk has a minimum pick-up and packing cost of $250 per month for special projects. Costs for special projects are $45 per hour of work, and unloading cargo costs extra.
- From $0.15 to $2.00 for materials used for packaging.
Red Stag Fulfillment
Red Stag Fulfillment gives small businesses a unique chance to work with what many people think of as a fulfillment center for small businesses. They can handle a wide range of fulfillment needs, are clear about prices and shipping, and offer low shipping rates for all major carriers. You also get access to Red Stag’s same-day order fulfillment, which lets you send things to clients faster or give them the option to do so.
Two of the most popular e-commerce platforms that Red Stag works with are WooCommerce and Shopify. Red Stag seems to be a winner for most small businesses, since both the merchant and the customer can track shipments and shipping labels are cheap.
On the Red Stag website, there are no estimates of fees because each retailer needs to contact the group to get a custom price. Here’s what we’ve heard will be on your final bill to give you an idea of how much it will cost:
- Inbound receiving: $13.25 per pallet; smaller shipments of one or more boxes can be negotiated.
- Monthly storage costs $2 per bin and $15 per pallet. Each pallet can hold up to four different items.
- Ordering pick-and-pack costs $2.25 to $2.64 for the first item and $0.30 for each additional item.
- Shipping boxes and packing materials: Basic shipping boxes and packing materials are provided at no extra cost.
- FedEx’s shipping costs have gone down a lot, especially for packages that weigh more than five pounds.
- Minimums for monthly orders: On average, there are 100 orders a day, or about three orders a day.
Deliverr has a way to link your fulfillment process to different sales channels. Deliverr has more multi-channel fulfillment options than any of the other companies on this list. These options include Wish, Amazon, eBay, and a number of other marketplaces. Deliverr stands out because all of these orders are put together in one dashboard. You can link up with BigCommerce or Shopify and then offer next-day shipping to people who want it.
In terms of price, Deliverr seems like a good option for small businesses. Even though each merchant gets a custom quote, they offer a cost calculator to help you estimate how much you’ll spend based on an Amazon link or a manual product import.
Here are some examples of cost estimates (iPhone cases example):
- Standard fulfillment: $4.26
- eBay Fast Tag: $4.26.
- Fast Wish: $7.52
- With 50 average units per month, the cost of storage is $1.20 per month.
Whether you’ve just started looking for a fulfillment center for your small business or you’re on the verge of making a final choice, you need to give each service provider a thorough look.
This post should have helped you narrow down your choices so that you can find a fulfillment center that meets your needs and fits your budget. If you want to learn more about how to improve your business, you can look at Dropship-Empire Blog.