Fulfllment centers are third-party logistics services also known as 3PL services. They are large storage places for businesses, similar to that of warehouses where businesses can keep their inventory but can do much more than a typical warehouse. Fulfilment center is available across the globe and can help merchants with reaching their customers faster without taking a headache over the supply chain management. However, there are some pros and cons associated with every service in the world and the following is a list of some of those pros and cons.
One of the important benefits of a fulfillment service is that it relieves businesses of the gigantic task of managing the inventory. Keeping track of inventory is an enormous task, a task that consumes time. Fulfillment centers take these loads away from businesses and allocate more time for their other needs.
A single merchant can’t go everywhere with his or her products physically. Even if they have a personal warehouse where they keep all their inventory, they would still fail to meet their customer expectations. As mentioned already, fulfillment centers are available across the globe and merchants can bring their products near to their customers by dealing with the nearest fulfillment centers. Thus, ensuring speedy delivery.
Lower your shipping and other costs
If you are managing your supply chain on your own, then there are many expenses that you have to cover such as the service fees of the maintenance of your warehouse and inventory, packing material cost, shipping and freight cost, etc. Outsourcing to fulfillment centers can reduce these costs because of the bulk amount of inventory they manage and ship.
Giving up control over supply chain management
One of the cons of the entire operation of outsourcing your supply chain is that you lose control over the decisions. For some, it can be daunting as trusting a third party with your goods and supply chain management is integral to deliver better customer service. Therefore, giving up control can make certain businesses anxious but you have to trust the service providers.
Fulfillment centers limit your personalization options. Big brands like to ship their products in their custom-made boxes and labels, by outsourcing your shipping, your business has to sacrifice on that end. If you want to add a personal touch to your customer experience, either you have to pay more or you have to take care of the inventory yourself. Both of these situations are going to be heavy on your pockets.
There are many more pros and cons associated with fulfillment centers. Nevertheless, these are some of the most common ones observed by many. Fulfillment centers apart from managing the inventory, also assist e-commerce businesses with carrying out the order processing on the behalf of them, they pack, ship, and take care of their client’s returns and ensure a smooth supply chain management. Small to medium size businesses outsource their supply chain management to keep their expenses low on the side of the maintenance of the center and inventory, shipping charges.