Central fulfillment for multi-channel e-commerce
E-commerce offers retailers numerous opportunities to make their products available to a wide audience. The best e-commerce businesses, especially those that want to be present on multiple sales channels, have one thing in common – an optimized and efficient logistics setup. In this post, you’ll learn how centralized fulfillment can save operational costs, meet online shoppers’ rising shipping expectations, and reduce complexity.
Why is multi-channel e-commerce useful?
Multi-channel selling has proven to be highly successful, as it allows merchants to expand their target audience and maximize their reach. By selling on marketplaces such as Amazon and eBay and/or operating their own online store, online retailers can diversify their sales opportunities and attract new customers. Multi-channel e-commerce also offers the opportunity to respond flexibly to changing market conditions and consumer trends, or to expand into new markets, for example.
Challenges of multi-channel e-commerce
While selling through a variety of channels brings numerous benefits, it also faces some challenges. Some of the biggest issues include:
- A consistent brand presence across multiple sales channels.
- Inventory management & product availability
- Overview of data across all channels
- Synchronization of inventory & automated fulfillment
- Optimal shipping & satisfactory returns
Of course, it is often almost impossible to deliver a consistent brand image across multiple sales channels. In many cases, this is not even desired. Branding can vary depending on the channel, as, for example, different priorities are set on Amazon than on a company’s own online store.
Most of the other pain points have to do with logistics in some form. It starts with inventory management. For example, if you use different fulfillment solutions from marketplaces, like Amazon’s FBA, you store your products separately for each channel. This increases the complexity of your logistics setup. Companies consequently spend a lot of time organizing different solutions and often lose track of the inventory in the different warehouses.
In addition, potential economies of scale are not exploited. Optimizing the warehousing and order processing of different logistics solutions causes a much greater overall effort than improving a central solution.
Shipping and, above all, returns management can also be carried out far more efficiently, quickly and uniformly with central fulfillment.
How can centralized fulfillment help?
Central fulfillment refers to the central handling of the entire ordering and shipping process for different sales channels in one place. Instead of managing logistics for each channel separately, all orders are consolidated in one fulfillment center or through one fulfillment company. As a result, centralized fulfillment enables efficient warehousing, optimized inventory management and smooth shipping. Merchants can send their products to a single fulfillment center, from where they are prepared for shipment to customers.
If your e-commerce business sells and ships orders in multiple countries, it makes sense to store products in multiple logistics centers, but manage and operate them centrally. This way, you shorten shipping routes and costs, while the network can be managed centrally.
Benefits of centralized fulfillment for multi-channel retailers
Using centralized fulfillment offers a number of benefits for multi-channel retailers:
- Consolidated warehousing: inventory is consolidated into one fulfillment center (network), resulting in lower storage costs and better use of available space.
- Optimized inventory management: by consolidating orders from different channels, the retailer gets a comprehensive overview and can better coordinate overall inventory. Consequently, bottlenecks and overstocks can be better avoided.
- Centralized fulfillment allows for a consistent post-purchase experience – regardless of which channel the purchase was made through. Packaging can thus be selected uniformly and marketing measures, such as the addition of flyers or the sending of e-mails, can also be better controlled.
A good example of the implementation of central fulfillment is the logistics processing for different sales channels such as Amazon (in this case, for example, via Amazon Seller Fulfilled Prime), eBay and an own Shopify store. By integrating with a central fulfillment partner like byrd, merchants can send their products to a fulfillment center where they are stored, packaged and shipped to customers. Orders from Amazon, eBay and the Shopify store are automatically routed to and processed from the fulfillment center via pre-built interfaces. This enables seamless and efficient logistics processing for all channels and better control over inventory.
So, in this example, you benefit from the large number of visitors on Amazon, but you can still use branded packaging and inserts, for example, to convert new customers into loyal repeat buyers. At the same time, you can build and strengthen your own brand with your own online store. There are hardly any limits when it comes to connecting new sales channels.
It doesn’t matter if you want to go from being an Amazon seller to a multi-channel brand, or if you simply want to use more opportunities to reach new customers. In many cases, central logistics has the potential to simplify your logistics and make them more cost-efficient.
Centralized fulfillment offers multi-channel retailers the opportunity to organize their logistics efficiently and benefit from the advantages of centralized processing. By outsourcing logistics to a 3PL partner, for example, retailers can save time, resources and costs while increasing customer satisfaction. Centralized processing of orders from multiple channels allows for better warehousing, streamlined inventory management and smooth shipping. So if you’re a merchant active in multiple sales channels, this could be an attractive solution to increase your efficiency and maximize your success.
About the Author:
Phillip Pitsch has been following byrd’s mission to build the best fulfillment center network in Europe since 2019, leading the company’s content and SEO team and trying to share experiences he gained while building his own e-commerce brand. byrd offers fulfillment services in state-of-the-art warehouses in 7 countries within the EU and the UK. Customers include companies such as Durex, Rituals and YourSuper.