Online stores have several options for managing fulfillment: you can take care of the entire process yourself, delegate part of the orders to others for management, or outsource it entirely to a specialized provider. Each option can be tailored to the specific needs of your online business.
Internal Fulfillment
Internal ecommerce fulfillment means that you manage orders yourself from your premises, using your own resources such as staff, technology and space, without resorting to third-party services .
For example, if you own a brick-and-mortar clothing store with an online version and you rent a large space, you could take advantage of the extra space to store inventory and pack online orders before shipping them out. If the postal service visits your store daily, you could hand outgoing packages directly to the postal carriers.
This ecommerce fulfillment method is ideal canada whatsapp numbers if your business handles less than 100 orders per month, as it can be an efficient and cost-effective solution.
Key benefits include ease of implementation, low start-up costs, full control over packaging style and branding, plus increased oversight of customer service processes. You can also reduce shipping costs by signing up for bulk postage services.
However, disadvantages include difficulties in scaling the business, increased time and labor consumption, storage space limitations, and the need to bear full rates on individual shipments.
Dropshipping
Dropshipping is an ecommerce business model in which orders placed on your online store are sent directly to a supplier or manufacturer. This supplier is responsible for selecting, packaging, and shipping the products to your customers, eliminating the need for you to physically manage inventory .
This way, you don't have to store or handle the merchandise; the entire post-sale process is handled by the supplier. Your profits come from the difference between the wholesale price you pay the supplier and the price you charge your customers, usually adjusted by your brand.
In Spain, many e-commerce businesses that sell imported cosmetics or clothing adopt this model. For example, Korean products are very popular: by working with a distributor in Seoul who ships directly to your customers, you can avoid the hassle of importing, storing and managing inventory yourself.
The main advantages of dropshipping are the low initial and operational costs, as the supplier takes care of the fulfillment of the orders. In addition, you reduce the financial risk, as you only buy from the supplier the products that have already been ordered by your customers.
However, dropshipping has significant drawbacks. By relying entirely on the supplier for shipping and handling of orders, you lose control over the process. If a customer receives a damaged product or experiences significant shipping delays, this can lead to complaints and bad reviews, negatively affecting your business' reputation and, ultimately, your sales.
Third party logistics
Third-party logistics (3PL) is a fulfillment service model in which an external company hired by your business manages the entire logistics and shipping process, as well as your supply chain.
Tasks covered by a 3PL provider include product procurement, warehousing, inventory and order management, freight forwarding, product shipping, receiving, distribution, customs, cross-docking, picking and packaging.
3PL services are especially popular among growing startups with a small product portfolio that they sell directly to consumers. These companies often face high order volumes but do not yet have the infrastructure to handle fulfillment in-house.
Outsourcing fulfillment to a 3PL provider has many advantages, especially if your ecommerce site lacks the resources to efficiently store, prepare, and ship inventory. If order volumes exceed your capacity, a 3PL service allows you to free up time and resources, allowing your team to focus on key areas of the business.
Other benefits include the ability to leverage the supplier’s expertise in supply chain management, reduced operational costs by not having to manage warehousing and shipping, and streamlined shipping and returns processes. Plus, this model is ideal for scaling quickly.
However, there are also downsides. By working with a 3PL service, you lose some control over the shipping and returns processes, which means you'll be subject to the supplier's timelines and standards. A bad experience with turnaround times or handling can affect the perception of your brand.