Product Fulfillment Services: So You Can Give Your Customers What They Want
You’ve found the perfect product to sell, you’ve secured the best price, and your packaging is gorgeous. However, if you can’t deliver on time and in perfect condition, your customers will be frustrated and they won’t come back. It doesn’t matter how great your product is if it never reaches its intended destination! That's where product fulfillment services can help.
We'll review a few of them for you so that you can choose the one that fits best with what you need.
Q: What is product fulfillment?
A: Fulfillment services are provided by third parties that take your product and ship it to your customers, either directly or after passing it through a distributor.
Q: Which kind of customers do these services cater to?
A: These services can be marketed to any business. The basic service is an option for direct sales companies—those without sales force offices—and for manufacturers who want a second channel for the sale of their products. Fulfillment-by-distributor services are primarily designed for manufacturers who sell via distributors and would like a greater level of control over where their products are sold.
Q: How do I find product fulfillment service providers?
A: You can start your search by going to the Internet. Look for companies that have been in business for at least five years, have a history of good service, and have an established record of repeat business. Because this is a relatively new area, there are not as many companies with a long track record; so you must be extra careful when choosing a company, because you will be working in a very hands-on way with them. Unfortunately, some people call themselves product fulfillment services but are actually just warehousing and shipping companies—and are not equipped to handle your product’s unique requirements.
Q: Do I need to find a product fulfillment service with experience in my industry?
A: No, but you should take the time to review their experience so that they are familiar with your market. You should also take the time to check them out customer references. It is important to ask for references from previous customers who can speak about their satisfaction with the company’s performance. If a company isn’t customer-oriented, it will probably not be able to handle your unique needs.
Q: How much do these services cost?
A: The price depends on how many products you want sent and if you’re using their direct-sales service or distributor channel. Some services will provide a free estimate of the cost, based on the information you provide, so you can be sure to get a clear picture of what you’re ordering. When pricing your order, ask that they specify what is included and what is extra.
Q: Can I use their sales staff?
A: Many fulfillment-by-distributor services have their own distribution networks. This means that they provide you with sales resources at no additional cost—you just pay for the products that are actually sold. Some fulfillment-by-distributor services will also place your product in several channels and then bill you only for those that generate sales. In this situation, you only pay for sales made by other companies.
Q: How much can I expect to pay for these services?
A: The cost will vary depending on your product, the type of service you choose, and the company you select. If you’re just starting out, check with experts in your product field to get a feel for what services are in demand. There are several sources of information available, including trade magazines and industry associations.
Q: What is involved in getting my products delivered?
A: You will have decisions to make as far as how quickly they should be shipped out. If they are heavy or bulky items, you may want to cover shipping costs yourself. There are also options to arrange for overnight delivery if you don’t have the truck or employees required to make these sales.
Q: What can I expect from the service?
A: The company should handle all of the packaging and shipping requirements, from receiving your product to delivering it to the customer. Note that some products may not be palletized, which means that they are too small for a standard box or crate and will have to be shipped in a special way.
Q: How much control do I have over my product during this process?
A: You should be able to speak directly with the person who takes over your product and will work with you until you are satisfied. There are options for handling returns, credits, and exchanges, regardless of the sales channel.
Q: Does the company offer any technical support? What kind?
A: Some companies will offer computerized systems and tracking services; others may simply have a good staff who can provide you with information and support. If you are selling a specialty product, you should ask if they have any experience with your product type. This is especially true if your products contain a unique element that requires special expertise to sell or ship.
Q: What kind of sales support will I get from them? Do they have a sales staff that calls on customers, or do they leave me responsible for the selling?
A: Many fulfillment-by-distributor services have their own distribution networks. This means that they provide you with sales resources at no additional cost—you just pay for the products that are actually sold. Some fulfillment-by-distributor services will also place your product in several channels and then bill you only for those that generate sales. In this situation, you only pay for sales made by other companies.
Q: How do I get started with a product fulfillment service?
A: Your first step is to find out what it will cost to get started. You need to know if there are any fees for packaging materials, freight, or other services. Also make sure that the company has the equipment and personnel necessary to handle your type of product. Ask about their experience with your industry. And ask about their customer references.
Conclusion
There is no perfect solution for every entrepreneur. The most important thing is to do your homework—ask people you trust and look for as much information as possible. There are many sources of information available, including trade magazines and industry associations. And don’t be too quick to take a company’s word that they have read all the required laws; it probably doesn’t hurt to ask them if they hire an outside attorney or an outside firm that specializes in these matters in order to make sure that everything is up-to-code. If you aren’t able to find a good product fulfillment service, the next best thing probably is going the direct-sales route.