Fullfilment

Now that you’ve successfully started marketing your product, this hopefully means you have orders to fulfil. There are three main ways to get your product to your customer. As your business grows, consider moving to the next style of fulfillment. Each fulfillment strategy is arguably better than the last, for both yourself as well as your customer’s needs.

Dropshipping

This is how almost every ecommerce business begins. In the past five years, dropshipping has become an incredibly popular way to make money online, due to its low risk, high reward nature. However, there are plenty of downsides, which make this style of fulfillment not very sustainable over a long period of time.

The way dropshipping works is simple. When somebody purchases your product on your website, instead of already having a supply of product in stock, you instead purchase that item from websites like AliExpress at a cheaper price and have them shipped directly to the customer. This way there’s no risk in inventory if your product doesnt sell, and you only spend money once a purchase has been made.

It seems almost too good to be true, and that’s because it is. These websites typically ship from China, which means incredibly slow shipping times. Customers will likely wait weeks for their products to arrive. This means increased efforts in customer service, and a decrease in returning customers. Dealing with hundreds of orders being dropshipped can quickly become a logistics nighmare, with dozens of emails daily, and numerous missing packages. This can also lead to chargebacks with the customers bank, which can cost your business hundreds of dollars.

Although its simple and carries almost no risk, it’s important to view dropshipping as only a way to test if your product and business model is successful. Once you begin to receive orders, it’s time to move on to the another method of fulfillment.

Self-Fulfillment

Although this isn’t often talked about in the ecommerce space, fulfilling your orders yourself can be a great first step when moving away from dropshipping. Unlike dropshipping, there is more of a risk involved, and this style of fulfillment will involve an initial investment. However, if you’ve mastered your business model with dropshipping you shouldn’t be too worried.

The first step is finding a manufacturer to buy your product in bulk. There are many ways of going about doing this, but the most popular service is Alibaba. Alibaba can connect you with thousands of Chinese manufacturers who are able to manufacture your product. The most efficient way to find a manufacturer is to use the Request For Quatation (RFQ) tool. RFQ allows you to simply upload of photo of your product and answer a few simple questions and the manufacturers will reach out to you. You will likely receive dozens of quotations, but you should try and narrow down your decision to 3-5 manufacturers. Order some samples and select the best option based on budget, and the quality of the product.

Once your product arrives, you’re ready to start fulfillment. If you’re using Shopify to run your business, they make self-fulfillment extremely simple, allowing you to purchase and print labels straight from the website. You should invest in a good label printer as well as plenty of packaging and you will be ready to go. Your customers will enjoy fast shipping times, and your business will be more legitimized.

Third Party Logistics (3PL)

This final solution allows your business to scale almost indefinitely and removes almost all responsibilities of fulfillment. This solution is using third party logistics. There are dozens of different services that provide third party logistics, but they allow follow the same principles.

Like self-fulfillment, you will need to make an initial investment of buying your products in bulk. You’ll follow the same steps provided before only this time you will be shipping your products to a warehouse rather than your personal address.

Here, the logistics company will connect to your Shopify dashboard, and when an order is placed, they will pick and pack your order and have it shipped straight to your customer, all without you clicking a button. There are additional costs to the solution such as storage space and a small fee for each order, but in the grand scheme of things, these expenses are well worth it.

Using third party logistics allows you to focus on continuing to scale your business, while not worrying about shipping out orders. Most services will work with small brands getting only 5 orders a day up to big brands getting hundreds or even thousands of orders. This means no matter what size your business is, 3PL can work for you.