Using Third-Party Fulfillment for an eBay Business
One way to move an eBay business forward and to outsource part of the work is to partner with a fulfillment company. The eBay retailer can do this in several ways including using Amazon Fulfillment, or private services such as Selery or Radial. Before discussing the logistics or securing the services of third-party fulfillment, it is important to examine the benefits the fulfillment service will offer.
Fulfillment simply means how the order is filled. "The fulfillment process is what happens in a company when an order for a product is received-the "fulfillment" of the order. This includes warehousing, finding the item ordered, packaging it, and shipping it to the right address." The benefits may include:
Third-Party Fulfillment Means Cheaper Shipping
Fulfillment partners or third-party fulfillers often have a much higher total shipment volume than the individual seller, have ample packing materials, tools, and labor and get volume discounts on both packing materials and shipments with major carriers—all of which reduce shipping costs. eBay sellers can take advantage of these relationships by using a third-party fulfillment company.
Because of their access to better materials and tools and the use of specialized general labor on the warehouse floor, the packaging done by third parties is often superior to what the individual seller can achieve on his own, particularly if the seller is a home-based business. The packages look better, are more professionally packed, are more likely to survive intact, and often weight less than do home-packed items using materials from local stores.
Third-Party Fulfillment Means Faster Shipping
When a third party, all that is needed to get an item packed and out the door is a notification that the item needs to be shipped. The result is often a same-day turnaround for orders that might have taken a completely independent small seller a day or even two or three to package, label, and ship.
Less Business Overhead
While it may seem that the use of a service of some kind implies its own overhead, the overhead incurred by using a fulfillment partner is often less than the overhead involved in outfitting and maintaining a shipping center in your own home or small business location. Along with the overhead involved, the smaller at home seller must spend time managing packaging, shipping, and transporting packages to the post office or UPS store.
Logistics of Using a Third-Party for Fulfillment
When using third-party fulfillment, the product is stored off-site from the eBay seller. This allows the company to pull the item and ship it immediately. The eBay seller no longer has possession of the item. This type of fulfillment gives away some control of the business because the eBay seller is at the mercy of the fulfillment company to ship the correct item, in a secure manner, on time. When an item sells, these things happen:
- eBay seller notifies the company of the item sold, customer name, and correct shipping address. This is usually done via an online portal to the third party's website.
- Fulfiller pulls the item, packages it, and ships it within the agreed timeframe.
- Fulfiller uploads tracking information to the online portal so that the seller can view the information.
- Tracking is updated automatically so that the seller can stay informed of the process.
Problems With Third-Party Fulfillment
Fulfillment sounds like a great solution on the surface, but it is not without its problems. When interviewing companies to handle eBay fulfillment, ask lots of questions and consider these situations. Make sure you know how problems will be handled.
- Fulfiller loses an item in the warehouse and is not able to ship the item because it cannot be found. (Very common on Amazon FBA.)
- Item is damaged during inbound shipping to the fulfiller. Item is not sellable. What is the reimbursement process?
- Fulfiller is a slow shipper. This can hurt eBay DSRs and feedback. Make sure the fulfillment contract states how quickly an item will be shipped.
- Buyer receives an item in damaged condition.
- Item is lost in the mail.
- What is the return process? Does the buyer return an item to the fulfiller or directly to the seller?
- Buyer has a question about the item. Will fulfillment company pull the item to give eBay seller the needed information to answer the question?
All of these issues can be overcome. Make sure they are covered by the fulfillment agreement.
The Best Fit for eBay Fulfillment Services
Fulfillment can be a good solution for eBay sellers who sell the same items in quantity, items new in the package, items that don't break easily during shipping, or lower dollar items that sellers won't take too much of a hit on a loss in the warehouse. Fulfillment isn't a very good fit for vintage or one of a kind items, valuable items like jewelry or collectibles, large items like furniture or paintings (due to the inbound shipping costs), items that expire quickly (health and beauty or perishable food), or items that are heat sensitive as most warehouses are not climate controlled.
Always do your homework before sending inventory to a fulfillment company, understand the terms of service, pricing, and any hidden fees.
Updated by Suzanne A. Wells.