With all the complexities of order fulfillment, there is no overall winner suited for every company. Considering all the areas of expertise, the right provider for one business may be the wrong provider for your business. So what is a conscientious supply chain manager to do?
When shopping for fulfillment partners, it’s important to consider factors specific to your business and weigh them against the provider’s capabilities. Three such factors include: 1) order volume, 2) inventory assortment and 3) delivery needs.
1) Your Order Volume vs Their Order Volume Minimums
Order minimums are a good indication of what types of businesses that fulfillment partner specializes in and if they match the tempo of your business. For businesses with low order volumes, the best fulfillment service will not have monthly minimums. This often applies to startups or businesses that sell a few expensive items each month. If you ship a high volume of orders, finding a partner with monthly order requirements is probably a good idea. Not only could it save money overall, but it’s an indication the company is equipped to manage your large volumes.
eFulfillment Service and ShipMonk are examples of partners who don’t have monthly order minimums. If you are just getting started or have low order volumes, you might be a great fit. Aero Fulfillment specializes in companies that ship at least 1,000 orders per month directly to consumers, but has flexibility with companies that are shipping to other businesses.
2) Your Inventory Assortment vs Their SKU Breadth Requirements:
Your inventory assortment, or product breadth, is your number of product lines, while product depth is the variety within each of those lines. These two elements combine to make up your product assortment. The ratio of your product assortment to the number of orders you ship per month is called SKU breadth. Some fulfillment warehouses have a maximum SKU-to-order ratio.
Simply put, the more SKUs you have, the more difficult it becomes to manage your inventory. It’s important to have this information on hand when talking with a potential fulfillment partner so they can provide accurate pricing.
According to a recent blog post, Fulfillment.com has an SKU-to-order ratio requirement of 7.5:1. ShipBob requires a SKU-to-order ratio of 5:1 or more. Aero Fulfillment doesn’t have a set SKU breadth requirement, but it does take into account the number of SKUs a business has when assessing the best possible fulfillment solution for the client.
3) Your Delivery Needs vs Fulfillment Center Locations
The best fulfillment partner for your business may have one warehouse location or several. The best fit for you depends on your business model and your customer distribution. If you are offering free shipping, low cost is vital to your profitability. If you’re offering a 2-day guarantee, strategic warehouse locations close to your customers are crucial to your bottom line. You want warehouses close to your customers to get your products delivered quickly, but you have to weigh that against the inventory cost of storing your products in too many warehouses.
The best 3PL providers have a range of business models when it comes to warehousing. Some have more warehouses around the country or globe to be close to your customers. Others have a small number of warehouses strategically located to quickly deliver quickly to most of the continental US states.
Rakuten Super Logistics is one such company that specializes in shipping speed. With 15 warehouse locations nationwide, RSL can reach 98% of the United States within two days via ground shipping methods. In contrast, Aero Fulfillment’s Midwest location allows clients to centralize their inventory; eliminating the complexities and additional inventory costs typical of a multi-facility set up. This approach, coupled with their unique arrangements with shipping partners, offers 2-3 day shipping to the lower 48 states at ground rates.
Another factor to consider is a warehouse fulfillment services company's relationships with top shipping companies, and how it benefits you, the client. Aero Fulfillment Services can reduce a company’s overall freight costs by leveraging its buying power to help save time and money on inbound and outbound freight shipping needs. Aero will conduct a complimentary audit of a company’s current freight volume and costs, and identify opportunities to shrink supply chain excess, improve time to market and reduce cost, by passing the savings on to you.
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