What are fulfillment providers and what do they offer for companies?
The word “fulfillment” is of American origin, from “to fulfill”. For the first time, fulfillment services were launched by Amazon in 1997, starting with two warehouse complexes, that nowadays we could term fulfillment centers. Today Fulfillment by Amazon has a large demand in the B2C and B2B directions.
Fulfillment providers take on the organization of сlients logistic tasks, from order receiving to its delivery to a buyer. They are intermediaries in a seller-buyer chain. A complex of services that offers a fulfillment provider includes:
- order receiving and processing;
- goods storage in a warehouse;
- orders assembling;
- receiving payments from buyers;
- returns processing.
It is up to a business to transfer all the logistics tasks (processing, storage, delivery) or only part of them, to a fulfillment provider. And since a segment of B2B services and the growth of eCommerce among consumers are actively developing in Ukraine, fulfillment providers’ services are in great demand today.
What is the difference between 3PL and a fulfillment provider?
3PLs (or third-party logistics providers) are logistics outsourcing companies. Their services include transportation, storage, warehouse management, dispatching, еtс. 3PL services are requested by many companies.
Fulfillment is a more specialized service for online retailers. A fulfillment provider assumes tasks from ordering a product on the internet shop to delivery of goods to an end customer. 3PL is popular among large companies, while fulfillment providers take on small retail orders. They also work with a wide range of products from different customers. They process each order individually, assemble and pack it. 3PLs work with boxes and pallets. Therefore, 3PL services are used by companies that need to transport, store and process large quantities of goods, and fulfillment providers are suitable for small and medium-sized businesses that operate in the eCommerce.
Which fulfillment providers operate in Ukraine?
Although fulfillment providers’ services are the newest activity in the logistics outsourcing market, the direction is rather popular. Fulfillment centers are built in large Ukrainian cities. Fulfillment providers’ services are most in-demand in Kyiv and regional centers. At the moment there are more than 10 companies that provide service in Ukraine. Among the most popular are Zammler, Nova Poshta, Ekol, Denka Logistics, and others.
Fulfillment by Zammler
Zammler was the first company that started to provide fulfillment services in Ukraine. Today, it owns a huge warehouse complex of A-class with a 12 500 m². The fulfillment center is located 17 kilometers from Kyiv. A large number of employees are working here. WMS is used for inventory management. The company offers services in Ukraine and for the international market.
Zammler fulfillment offers the following services:
- Acceptance of goods from a supplier to a warehouse and further storage;
- Provision of call-center functions for prompt orders processing;
- Assembling and packaging of products;
- Automatic delivery cost calculating;
- Delivery of a customer’s order to the door with a choice of the most optimal courier service;
- Reporting activities;
- Reverse logistics;
- Receiving payments from clients;
- Organization of high-quality photos of products for online stores.
Fulfillment by Nova Poshta
One more successful fulfillment provider is an independent branch NP Logistic that is engaged in the provision of fulfillment services for Nova Poshta. The company owns two modern fulfillment centers with a carrying capacity of 50 000 orders per day. Within the fulfillment services NP Logistic offers:
- Warehouse storage of goods;
- Orders assembling and packaging;
- Ability to work with loads of different assortments and overall dimensions;
- Orders storage and processing in modern A-class warehouses;
- Possibility to pay for the service upon completion;
- Tracking the status of an order via mobile application.
How should a company choose a provider for integrated fulfillment?
Some fulfillment providers offer integrated fulfillment services that include all stages of order processing. Integrated fulfillment has some advantages:
- Ability to focus on core activities;
- Optimization of order processing costs, warehouse rental, staff hiring;
- Increasing customer service level.
This is an important part of a company’s logistics, and therefore a business should make a responsible choice of integrated fulfillment providers.
These factors should be taken into account:
- Market experience with specific product segments;
- Availability of large warehouses with suitable storage conditions, equipment, and security;
- Courier services that cooperate with fulfillment providers;
- Availability of additional services such as packaging, sending notifications to buyers, etc.;
- Feedback on fulfillment provider activity.
A company should also pay attention to the personal account that its fulfillment provider offers. It shows all goods movement, inventory balance, and returns.