What are National Fulfillment Services? | Cahoot

What are national fulfillment services?

In theory, any fulfillment provider can offer national fulfillment services – after all, carriers like FedEx and UPS will happily ship parcels across the entire United States (and charge a boatload for it). However, fulfilling nationally from one or two locations is costly and slow due to inefficient fulfillment processes and exorbitant shipping costs. So businesses are left with smaller margins and disgruntled customers waiting too long for packages.

A truly nationwide fulfillment solution has warehouses strategically placed across the entire United States, and it will distribute inventory across those multiple locations. With this strategy, there’s inventory close to all customers, so no matter where in the country the order comes from, it ships quickly and cheaply. In this article, we’ll cover when growing ecommerce businesses should switch to a nationwide network and provide advice on how to choose the right provider.

Defining Order Fulfillment

Order fulfillment is the backbone of any successful ecommerce operation. It encompasses the entire process of receiving, processing, and shipping customer orders in a timely and efficient manner. This multifaceted process includes several critical activities: managing inventory to ensure products are in stock, processing orders accurately, packaging items securely, and shipping them promptly. Each step is vital to ensuring that customer orders are fulfilled correctly and on time, which in turn drives customer satisfaction and loyalty. Effective order fulfillment is not just about moving products from point A to point B; it’s about creating a seamless experience that meets or exceeds customer expectations.

Importance of Order Fulfillment in Ecommerce

In the fast-paced world of ecommerce, order fulfillment is a key determinant of customer satisfaction and business success. When orders are fulfilled quickly and accurately, customers are more likely to have a positive experience, leading to repeat business and word-of-mouth referrals. On the other hand, delays, errors, or damaged goods can result in negative reviews and lost customers. Clear customer communication can help mitigate this, but that’s just a delaying action; improving the fulfillment process and increasing prompt delivery is the foundation of success. Therefore, ecommerce businesses must prioritize efficient and reliable order fulfillment processes. Investing in robust order fulfillment systems and partnering with reliable fulfillment centers can significantly enhance customer satisfaction, build a positive reputation, and ultimately drive business growth.

How National Fulfillment Services Work

National fulfillment services are designed to support a nationwide shipment network; shipping orders same-day to help save on shipping and fulfillment costs while maintaining prompt delivery to American customers no matter where they are.

Here’s an overview of how national fulfillment services work:

Order Receipt and Processing

When a customer places an order on an ecommerce platform, it is sent to the fulfillment center’s system, which then triggers the processing of the order. The order is reviewed for accuracy and any discrepancies or issues are addressed promptly. The fulfillment center’s team then picks and packs the ordered items, ensuring that they are properly packaged and labeled for shipping. This meticulous order fulfillment process ensures that customer orders are handled with care and precision, minimizing errors and enhancing customer satisfaction.

Inventory Management and Storage

National fulfillment services also involve the management and storage of inventory at each warehouse location. The fulfillment center stores the business’s products in a secure and climate-controlled environment, ensuring that they are protected from damage and deterioration. The fulfillment center’s inventory management system tracks the levels of inventory, ensuring that the business is notified when stock levels are low, and reordering should be initiated. This proactive approach to managing inventory helps businesses maintain optimal stock levels and avoid stockouts, which can disrupt the fulfillment process and negatively impact customer satisfaction, while at the same time minimizing costs of storing heaps of items in long-term storage.

Shipping and Delivery

Once the order is processed and packaged, it is shipped to the customer via a reliable shipping carrier. National fulfillment services often have partnerships with multiple shipping carriers, ensuring that the best rates and delivery times are secured. The fulfillment center’s system tracks the shipment, providing real-time updates on the status of the order. This comprehensive shipping service ensures that customer orders are delivered promptly and accurately, further enhancing the overall customer experience.

Warehouse Management System (WMS)

A Warehouse Management System (WMS) is a software application that manages and controls the day-to-day operations of a warehouse or fulfillment center. The WMS tracks inventory levels, monitors order processing, and optimizes warehouse operations. National fulfillment services use a WMS to ensure that orders are processed efficiently and accurately, and that inventory levels are always up-to-date.

The WMS is integrated with the business’s ecommerce platform, ensuring that orders are received and processed in real-time. The WMS also integrates with shipping carriers, ensuring that shipments are tracked and updated in real-time. This integration enables national fulfillment services to provide real-time updates on order status, ensuring that customers are always informed. By leveraging advanced technology and integration, national fulfillment services can provide businesses with a scalable and efficient order fulfillment solution, enabling them to focus on growth and customer satisfaction.

By incorporating these features, national fulfillment services can streamline logistics operations, reduce errors, and enhance overall efficiency. A national fulfillment service is a crucial edge for businesses looking to stay competitive in the fast-paced world of ecommerce.

When Should a Business Upgrade to a National Fulfillment Solution?

Businesses that start out on Amazon usually have a ready-made option for national fulfillment in Fulfillment By Amazon (FBA). Amazon has famously built its fulfillment network to massive proportions, and they have the most ecommerce fulfillment locations across the United States. For all non-FBA orders, the business is likely shipping out of either their own small warehouse, a small single 3PL, or even just a garage. Small, single operations like these don’t have the scale to match larger networks for efficiency.

It’s surprising how easy it is to gain value from a nationwide network – and how soon it can be done. At just a few hundred orders per month, businesses reach the point of enough scale to distribute inventory to multiple locations across the country. The benefits of national fulfillment will far outweigh the small increase in inventory needed to supply multiple locations.

The one caveat to this guidance is that if a business has very high SKU diversity, they’ll benefit most from outsourcing their high volume SKUs only. Low volume, “long tail” SKUs benefit much less from distributed fulfillment.

Benefits of National Fulfillment Services

National fulfillment services are vital for ecommerce businesses that want to boost revenue growth and protect margins. Fulfillment companies play a crucial role in providing order fulfillment services, especially for international sellers entering the U.S. market.

Utilizing a network of fulfillment centers across various countries allows businesses to reach a worldwide customer base quickly and economically. Global fulfillment enhances shipping efficiency and reduces costs for ecommerce businesses.

1. Nationwide Fulfillment Boosts Revenue Growth

“Fast and free” shipping badges are one of the single most effective growth tools in the ecommerce industry. Amazon metrics show that adding a Prime badge to a product for the first time improves conversion by 50%, and Walmart similarly found that their TwoDay badge drives a 50% lift. Every major marketplace and shopping cart now has their own version of the Prime badge, and each finds a big revenue boost from using the badge.

If a business is shipping out of one or two locations, it can qualify for fast and free shipping badges simply by paying express carrier rates – but what’s the point of revenue growth if shipping costs more than the product itself? Nationwide fulfillment networks unlock profitable revenue growth through fast shipping by placing inventory across the country. By leveraging nationwide fulfillment locations, every order will be fulfilled by a nearby location, so the cheap shipping options still deliver within 1 or 2 days. Turn on those badges across all channels and reap the rewards of better search rankings and higher conversion while still saving money on shipping.

2. Minimize Shipping Costs

Businesses shipping from just one or two locations will often see half or more of their orders shipping to Zone 5 and up. Compared to shipping out of a single location, national fulfillment distributes inventory more efficiently across the country through multiple warehouse locations, so orders are shipped from a starting point much closer to their destination.

Placing inventory in 3-5 locations all but eliminates the need to ship above Zone 4, cutting a business’s average zone profile by multiple zones. Every one of those shipping dollars saved goes straight to the bottom line; saving a few shipping zones on every order means saving a few dollars on every order. Imagine $2.00 more profit on every order.

3. Reduce Supply Chain Risk

Capacity is strained at every point of the supply chain, from international shipping to last mile delivery. Capacity isn’t crunched equally across the country though, which means that a nationwide network can significantly reduce the risk that all available inventory will be stuck in the same massive delay.

If there’s a delay in the supply chain affecting a region, inventory located at warehouses in other regions can pick up the slack. With only one or two small warehouses that might not be an option. Inclement weather is another common cause of regional disruption. If the only warehouse is closed due to hurricanes, snow, fire, or other natural cause then fulfillment may be completely frozen.

If that happens then selling because they had no way to fulfill orders. If they had a nationwide network, they would have kept on selling even as one part of the country shut down.

Additionally, a nationwide network allows inventory management across multiple locations through a single dashboard, enhancing operation scaling and improving customer service.

Cahoot National Fulfillment Services

Cahoot’s nationwide network of over a hundred warehouses provides affordable national fulfillment solutions for ecommerce business. Businesses with just one or two locations need to ship express to cover 99% of Americans with 1- and 2-day shipping, so fulfillment across the US is surprisingly expensive with two-coast providers. On the other hand, Cahoot will strategically distribute inventory to a truly national footprint so that a business can ship to 99% of the country in 1- and 2-days but always pay lower cost, ground shipping, rates.

Unlike other providers, Cahoot has the flexibility to upgrade a business’s existing warehousing and fulfillment services. If a business is fulfilling out of one or two warehouses, Cahoot can add a few fulfillment locations to seamlessly extend the network into a nationwide footprint. With this approach, businesses can continue to get value out of existing assets while enjoying the benefits of a nationwide network.

Getting started with Cahoot is surprisingly easy – with pre-built integrations for major ecommerce channels like Amazon, Walmart, Shopify, and BigCommerce, businesses can boost growth with fast shipping badges in under two weeks.

Contact Cahoot today to learn more about how our nationwide fulfillment network can be the key that unlocks profitable ecommerce growth.

Conclusion

Selecting the right fulfillment company is a critical decision for any ecommerce business. A comprehensive national fulfillment center offers a wide range of services, including warehousing, packaging, and shipping, which can streamline logistics operations and improve overall efficiency. When evaluating potential fulfillment centers, it’s important to consider the breadth of services they provide. A center that can handle everything from inventory management to last-mile delivery can be a valuable partner in ensuring smooth operations and high customer satisfaction.

Location is another crucial factor. A fulfillment center with multiple strategically placed facilities across the USA can significantly reduce transit times and shipping costs. This geographic advantage ensures that customer orders are shipped from the nearest location, leading to faster delivery times and lower shipping expenses. Additionally, a fulfillment center with a robust network of warehouses and distribution centers can offer more flexible and responsive logistics operations, allowing businesses to adapt quickly to changing market conditions.

Advanced technology is also a key consideration. Fulfillment centers equipped with automated sorting and packing systems can enhance efficiency and accuracy, reducing the likelihood of errors and delays. By leveraging technology, fulfillment centers can provide faster and more reliable service, which is essential for maintaining high levels of customer satisfaction.

Ultimately, the right fulfillment center for an ecommerce business will depend on its specific needs and requirements. By carefully evaluating the range of services, locations, and technology offered by different fulfillment centers, businesses can make an informed decision and choose a fulfillment partner that aligns with their goals and helps them achieve operational excellence.

Frequently Asked Questions

What is order fulfillment?

Order Fulfillment is the part of ecommerce relating to shipping products to customers. This starts with inventory management, going through processing orders at shipping locations, until products arrive at the customer’s doorstep.

What are nation-wide fulfillment centers?

Technically a fulfillment center is only a single location, so a fulfillment service needs multiple centers/warehouses to be considered nation-wide.

How many fulfillment centers are needed to provide 2 day ground shipping nation-wide?

This depends on several factors, but with 4+ fulfillment locations, 99% of the US population can be reached in 2 days via ground shipping. Cahoot has over 100 fulfillment locations to help deliver to US customers across the country.

Are nationwide fulfillment centers 3PL or 4PL?

A 3PL can support nationwide fulfillment, but the more locations a 3PL has, the closer they are to becoming a 4PL.

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