Amazon SFP runs one of the largest fulfillment centers in the world. The company takes on inventories from several other companies and takes on their fulfillment roles. A fulfillment center is a company that helps eCommerce merchants to outsource their shipping and warehousing duties. They are essential for online businesses because they relieve them of the required physical space to store all products. They also come in handy for companies that do not have enough space to cater to their inventory level. In this post, we discuss how fulfillment centers work.
How do fulfillment centers work?
Online companies have to employ a fulfillment center. After that, the company has to ensure that the fulfillment center has enough inventory to take care of all orders. This means that if the company manufactures the products sent to clients, it will have to send the products to the factory’s fulfillment center. On the other hand, if the company gets the products from a separate manufacturer, they have to make sure the products are sent directly to the fulfillment center. In simpler terms, the fulfillment center functions as a warehouse for the online business.
Therefore, it is the business’s role to make sure that the inventory is always sufficient because they know their client habits. The last thing a company wants is to receive too many orders only for clients to be disappointed.
Once the fulfillment company received the products from the online company, they log in the items into their database. This helps keep track of all the products. The database also helps online businesses know when and how they need to stock up again. Most fulfillment companies allow online businesses access to their inventory in real-time. This means that the center does not have to keep sending records to the business or requesting restocks.
Afterward, when customers make purchases from the online business, they send the orders to the fulfillment center. This is done once the products have been paid for. The fulfillment center takes on the role of processing the orders. Note, the fulfillment centers do not require any input from the online businesses at this point.
The fulfillment center will make sure that the clients get the products. When preparing products for delivery, the companies have to make sure they meet the personalization or customization requests as agreed upon with the online business. For instance, if the business wants custom packaging uses, then the fulfillment center will make this happen.
On the other hand, if clients decide to ask for refunds on a purchase, then the fulfillment center has to receive the product and inspect it to make sure it is in perfect condition before issuing a refund. If the product is still sellable, then the center will log it back into the inventory.
Conclusion
Fulfillment centers help eCommerce businesses reduce their workload. They help make their work easier and also influence the prices of the products. This is because the company does not have to incur the costs of hiring warehouse and shipping employees.
