The eCommerce industry is exploding, mainly because online shopping has now become a necessity. When it comes to making a business successful, you must focus on faster order fulfilment as it greatly influences a company’s growth. Delivering orders within the promised timelines requires proper inventory and warehouse management. There are various order fulfilment techniques to meet your company objectives. As order fulfilment directly influences your clients’ satisfaction, you must be very careful in this regard to ensure that it is rendered efficiently.
Common Order Fulfilment Techniques
1. Outsourcing to a Third-party Logistics Provider
When you outsource your fulfilment needs to a reputable third-party logistics provider or 3PL, you are taking logistics services to take care of your storage, packing, inventory management, and delivering products to your customers. In a nutshell, a 3PL is a one-stop-shop for enterprises.
2. Self-fulfilment
When your business is small, you receive fewer orders and prefer to fulfil them; it’s called the self-fulfilment technique. Here, you are responsible for complete inventory storage, administration, and transportation.
3. Dropshipping
It is the case where you are not concerned with inventory management; rather, your manufacturer controls your whole supply chain. Dropshipping is a business method in which your orders are sent straight from the factory or manufacturer to your customer.
4. On-Demand Warehousing
As this is a relatively new term for beginners, let us delve deeper into the notion of on-demand warehousing in the upcoming header.
On-Demand Warehousing – What Is It?
On-demand warehousing is an online platform that enables you to temporarily store products and fulfil your orders with warehouses that have excess storage capacity. In other words, it is the practice of outsourcing order fulfilment to a corporation that does not execute fulfilment services directly but contracts with third-party logistics service providers
Why is On-demand Warehousing Becoming Popular?
On-demand storage is gaining popularity as a result of Amazon’s FBA competition. Consider the below for what has made on-demand storage a popular notion in recent years.
1. Unwillingness to Expand Warehouse Space
Warehouse space is a significant financial expense that you wish to avoid. As a result, on-demand warehousing is the greatest solution for you, as it allows you to keep products on a contractual basis without having to spend any money on buying a warehouse space.
2. Flexibility
You benefit from on-demand warehousing since no long-term commitments are required. If you deal in seasonal goods, you can benefit the most from on-demand storage since you require a one-time warehouse facility to keep your product. Why hire a warehouse for some days when on-demand storage can do the same task for half the price?
Suppose you have a large amount of extra inventory that would be costly to store with a traditional third-party logistics provider. In that case, on-demand warehousing may be the best option for you.
3. Increase in the Number of Online Businesses
eCommerce is critical even in the aftermath of India’s fatal coronavirus outbreak. With the country’s expanding internet penetration, Indian eCommerce is booming, with new online businesses emerging daily. With the growth of eCommerce comes the want for additional warehouse space. It is among the drivers of on-demand warehousing expansion in India.
4. The Desire for a Speedier Order Fulfilment
People demand next-day and same-day delivery in the twenty-first century. On-demand warehousing enables you to offer same-day delivery for increasing your customer satisfaction level. You can also search for an on-demand warehousing facility near your customer.
Who Can Deploy On-Demand Warehousing?
On-demand warehousing may help businesses ranging from consumer products to the hospitality industry. It applies to small and large businesses looking to enhance their supply networks.
1. Enterprise Business
Enterprise businesses may supplement their existing order fulfilment infrastructure with on-demand warehousing. It is a good choice for launching new initiatives, developing new programs or service/product promotions, and managing supply chain delays caused by high tariffs and seasons.
2. Brands
Online bred and born businesses can also benefit from on-demand warehousing for many objectives. Most of them prioritize customer acquisition and company development above supply logistics, allowing them to grow without worrying about establishing physical facilities.
The Distinction between On-Demand Warehouse Providers and Traditional Third-Party Logistics Providers
You should be aware of key distinctions between on-demand warehousing and traditional solutions before deciding on your company.
1. Central Warehouse Network vs. Distributed Warehouse Network
Traditional third-party logistics businesses provide central warehouse services in a few chosen places. On the other hand, on-demand warehouses run a network of geographically scattered fulfilment centres and warehouses.
2. Costs Upfront vs Flexible Billing
While traditional warehouse solutions typically need large upfront investments and long-term commitments, on-demand warehouses provide more flexible billing and contract terms.
3. Direct Contact with the Warehouse Provider vs a Middleman through a Platform
With a third-party logistics company, you have a warehousing solutions supplier. In comparison, an on-demand warehousing provider is a technological platform that connects you to available warehouse space on a short-term basis.
4. Long-Term Partner vs Temporary Fix
A third-party logistics provider with demonstrated logistics and fulfilment skills provides a long-term partner and stability for your company. While on-demand warehousing provides immediate flexibility, it does not provide uniform service quality.
Bottom Line
Each eCommerce company is unique and requires a customized warehousing solution to deliver its products to customers efficiently. On-demand warehousing offers novel and adaptable solutions worth considering in some situations. But typical third-party logistics providers offer greater stability and long-term cooperation.
