A reliable fulfillment house by any other name would be as sweet to your profit margins. If you’ve heard the term “fulfillment house” recently but aren’t sure what it means, you’re not alone. It pops up from time to time but has been replaced by “fulfillment service providers,” “distribution center,” and “fulfillment center,” among others. Let’s take a closer look at what it means. Plus, discover why your business might need a fulfillment house of its own.
What is a fulfillment house?
A fulfillment house is a company that provides fulfillment services, also called a third-party logistics (3PL) provider. The term uses “house” in the way that we use “business” and is a common expression once you think about it. We still say things like lighthouse and publishing house, and you might have ordered a house salad in the past.
Or, if you’re a gambler, it’s likely “the house” took your chips at some point.
So, a fulfillment house is a location or business whose purpose is to support fulfillment operations. That means they’ll give you a hand with your inventory and order management, from receiving inbound goods and storing them to pick and pack services, as well as carrier management and last-mile fulfillment support.
Every fulfillment house is a little different, so the services they offer and the promises they make will differ. For Red Stag Fulfillment, our 3PL services and eCommerce fulfillment include many capabilities, such as:
- Receiving inbound inventory shipments, with a 2-day dock-to-stock promise
- Storing inventory and providing accurate counts 24/7
- Picking and packing of orders based on your packaging preferences
- Order fulfillment for all your online sales channels
- Kitting and insert capabilities
- Discounted shipping rates through our carrier partners
- Same-day order fulfillment and shipping before 5 p.m. EST
- Expert support for inventory forecasts, planning, and eCommerce returns
- Error-proof systems designed to eliminate mis-picks and mis-packed orders
- Returns processing
- Zero shrinkage allowance
- And more
A note on regional use
However, you will still hear the term in different regions, and there are some changes in what it means based on those locations.
For example, Canadian companies such as Inapak use the term for facilities that both ship goods and marketing materials. Their fulfillment houses mail out catalogs, literature, and dirt mail campaigns while also handling inbound rebate management. It’s as much a marketing service as it is an order fulfillment service.
The “fulfilment house” term is used in the UK with slightly different spelling and broadly refers to a fulfillment operation. Businesses in the industry tend to say “center” or “warehouse” instead of just “house,” but UK law often refers specifically to fulfilment houses. Perhaps the most important consideration for you would be the Fulfilment House Due Diligence Scheme that governs when a company must register to store goods in the UK for sellers established outside of the UK. Importantly, legal requirements can cover businesses that do their own fulfillment, offer fulfilment services, or use fulfilment services in the UK.
Penalties are hefty for violating the Scheme, and violations may prevent you from operating in the UK.
Always work with a partner like Red Stag Fulfillment for help determining your requirements and compliance needs in the U.S., UK, and elsewhere.
How is a warehouse different?
When you’re trying to determine the services you want, the word “fulfillment” is the most important thing to look for from companies. Fulfillment gives you the best clue into what will be offered and how those companies fit into your supply chain.
Traditional third-party warehouses prioritize the storage of goods. For eCommerce companies, you may need access to on-demand warehousing where you pay someone to store excess inventory either as it moves or when a slowdown occurs. These warehouses typically offer low-cost, long-term storage, but you need to manage most of the process for getting goods to and from these locations. Warehouses also tend not to offer fulfillment to your customers instead of shipping bulk amounts of your inventory to a fulfillment or distribution center.
Companies with eCommerce and brick-and-mortar channels will use a warehouse service to act as a supplier for those physical retail locations. These warehouses generally have minimum order requirements for restocking your locations and will limit the number of places they ship to for you.
Unlike 3PL locations, many warehouses do not have daily pickups by carriers. They schedule out pickups, and some may only support freight-level shipments. While you may have the option of pooling inventory to meet LTL and FTL requirements, this will mean you may have to wait longer to be able to get your restock inventory.
There are many more advantages to working with a fulfillment center that you can learn here.
Why is a fulfillment house so important?
Fulfillment house services are essential for eCommerce companies because long wait times for inventory resupplies or to get orders to customers will cost you money, potentially in multiple ways.
If a customer can’t get the products that they want from you, there’s a risk they’ll go to a competitor. You also face that risk if the customer can’t get your products delivered fast enough. Stockouts, delays, and uncertainty can make it hard for customers to buy from you or return and make a second purchase.
3PLs like Red Stag Fulfillment help growing eCommerce companies manage their order fulfillment and inventory to simplify operations and meet customer demands. We ensure that your orders go out the door on time and accurately, backed by guarantees, and can provide analytics and demand forecasting services to help you set the best stock levels. It’ll keep your entire supply chain running smoothly and allow you to focus on generating sales, finding new audiences, and expanding with new products or markets.
You get to stay focused on being the expert in your products and industry while our experts handle your fulfillment needs. It’s an intelligent part of business process optimization and long-term growth planning.
How do I get started working with a fulfillment house or 3PL?
Companies like yours should always start working with 3PLs and fulfillment houses by having conversations and asking questions. Reach out to multiple providers to discuss your needs and the particulars of your company. Just like you specialize, so do fulfillment houses. Red Stag, for example, is best able to serve sellers of large, bulky, or heavy eCommerce products.
Here’s a great guide that’ll help you start to think about what to ask and where to focus your conversations. Seek out a partnership that can address your pain points and make it easier for you to satisfy customers. You want to say goodbye to the headaches your team has now and avoid creating future headaches for customers.
After selecting your partner, you’ll determine how to ship your inventory to them. You’ll also integrate order and sales platforms with the 3PL’s software. Working together streamlines order data management and lets them focus on filling orders while you sell. The best 3PL partner will help you determine inventory levels, protect products, and easily adjust SKUs as needed. If you’re looking for a new fulfillment provider or have general questions about outsourcing your fulfillment, we’d love to talk with you. We’re here to help.