Very funny Mark!There are certain types of Fulfillment, (I.E.) EN is a service fulfillment, in that they provide a particular service to it’s subscribed members, us. There is Product Fulfillment which is the manufacturing, warehousing, assembly, quality control and delivery of products directly to customers without the finished product going back through the company that has created it.

I’m impressed April :))

“There is Product Fulfillment which is the manufacturing, warehousing, assembly, quality control and delivery of products directly to customers”

In most fulfillment companies you can select from a group of services including:

Coordination of manufacturing
Financing between the factory and the retailer
Freight movements
Retailer distribution
Sell in
Rep management
Reporting and accounting
Product development

Although I understand what they do, I find it the most complicating part to study of manufacturing.There are so many rolls they play.

I have read where people can pick and choose the package of services they’d like, but then have to do the other stuff needed themselves.

The returns make my head spin.
I’ve also read where the cost per piece can take the profit right down.

Time is also money, so I think in the end, I’d let them do everything.But that’s maybe because I don’t know better yet :-)

The product development is interesting, because I did also read a little about that and got very confused. They are like masters of all?

They are the one stop shop type of deal, that will be paid nicely to be just that?

It’s like a salad bar really….use as much or as little as you like.

On the low end just turning freight out to the retailers is about 18% and full service fulfillment will cost you about 35% ….and that’s % of landed (manufactured cost + freight)

I know this post is really old, but I would like to put my expertise into this subject.

I had a fulfillment and warehouse company, and specialized in services for small foreign and local business who didn’t have the infrastructure to pick and pack their own orders. I ran full service which included holding the inventory, receiving and packing the orders, invoicing and shipping and collecting money for my clients.

However…… I was charging too little, and my clients didn’t want to pay what would have allowed me to continue and make a profit (and pay myself!). Mark is right, you would have to cost in at least 35% of your bottom line to take fulfillment into account.

Because I was charging too little, I eventually had to close my doors in January 2009. But people still call and e-mail me to work for them, so perhaps I will be re-opening soon!

I’ve owned my own online retail business for more than seven years and have handled all my shipping in-house. Because it is a lot of hard work that sometimes requires me to pull some pretty late hours, I’ve considered contracting with a fulfillment company. At the end of the day, handling everything myself allows me to provide customers with personalized, first-hand service.

Before you hire a fulfillment company, I would explore whether or not it would be more cost effective to create space to maintain your own working inventory and setup a packing station in-house.

I’m sorry to hear about your company Lanky – I have been there and it’s no fun – but just remember it’s anything but failure, it’s opportunity! I keep this close at hand for those times -

“It is not the critic who counts – Not the man who points out how the strong man stumbles or where the doer of deeds could have done better.

The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who at the worst, if he fails, at least he will fail while daring greatly so that his place shall never be with those cold and timid souls who knew neither victory nor defeat"

Susan – I agree, when you are simply selling out of your home it is better to hire local help and do things yourself. That being said, when you get to the point where you are selling to major retailers, they will almost always require you to have a complete fulfillment system in place with product liability insurance, distribution, and EDI capabilities. They simply can’t run the risk of you not being able to get them their order. Plus – with the average retail order of over 100,000 units you would have to have a pretty big house. :)

I completely understand your point, Mark.

My business graduated to a commercial space several years ago. Our sales to retail stores and consumers throughout the U.S. has increased so much over the past two years, we recently had to move to a larger space to add a dedicated area for inventory and ‘pick and pack’.

We’re still small potatoes I suppose. :)

I was consoled at the time that businesses fail, but entrepreneurs just keep going. I am like the energizer bunny!!

The inventions and “it must be better this way” keep flooding my brain, and I have a whole folder on my computer labelled “Inventions”….!! It just requires help in getting the products to the market.

Susan, if you find a fulfillment house that will treat your orders like they would their own company, then you have a winner (as I was!). I always made sure that nothing went wrong, but of course, there are always times when mistakes do happen. But overall, do what you do best. Leave the grunge work to someone who specializes in it. I know that small businesses need to be multi-functional, but in the at the end of the day, it pays to concentrate on the thing that you are passionate about to move your business forward.