E-commerce has exploded in popularity over the last decade, with more and more businesses moving online to sell their products and services. However, running an e-commerce operation requires significant investments in technology, fulfillment and operations. This is where e-commerce fulfillment companies come in. They provide critical services that enable e-commerce businesses to focus on sales while leaving fulfillment to the experts.
In this article, we will guide you to choose the right e-commerce fulfillment company when selling in Japan.
What is an order fulfillment and e-commerce fulfillment company?
Order fulfillment refers to the steps involved in processing customer orders and delivering them successfully. It involves receiving inventory, picking and packing orders, shipping, and handling returns.
An e-commerce fulfillment company handles the logistics and operations involved in processing, packaging and shipping online orders for e-commerce businesses.
For online sellers, order fulfillment can become complex very quickly. Managing it in-house requires space, labor, and tools to do it efficiently. This is why most e-commerce businesses prefer to outsource a fulfillment comapny.
By outsourcing fulfillment operations to a third party such as Ezbuy Japan, e-commerce businesses can focus on their core competencies like marketing, branding and product development instead of investing time and resources into fulfillment infrastructure and headcount.
Understanding the order fulfillment process
The order fulfillment process typically involves the following key steps:
- Receiving and storing inventory: All products are received at the fulfillment center, counted, inspected and stored properly in the warehouse. Inventory levels are tracked in real-time.
- Order processing: When an order is placed by a customer, it is sent to the fulfillment center to be processed. The right items and quantities are picked for that order.
- Picking and packing: Warehouse workers or robots pick the items from inventory and pack them properly to ship out. The package is labeled with the shipping address.
- Shipping: The packed parcel is handed over to the shipping provider and a tracking number is assigned. The customer receives shipping confirmation.
- Returns: Items that customers wish to return are received back at the warehouse, processed and reshelved or discarded if defective.
The different e-commerce fulfillment models
There are three main order fulfillment models that online sellers can choose from:
The merchant handles the entire fulfillment process in-house at their own warehouse facility. This offers maximum control but requires significant investment in space, labor and tools.
As sales grow, it becomes difficult to scale up self-fulfillment efficiently. It diverts focus away from core business functions.
2. 3rd Party Fulfillment
A third-party logistics (3PL) provider is contracted to handle most aspects of order fulfillment. The seller ships their inventory to the 3PL's warehouse and connects their sales channels.
When an order is placed, the 3PL picks, packs and ships it out to the customer. This model offers easy scalability and operational efficiency.
The merchant does not keep any inventory. When an order is received, they purchase the item from a supplier or manufacturer who then ships it directly to the customer.
This model allows starting an online business with minimal upfront investment, but provides the least amount of control.
The benefits of outsourcing to e-commerce fulfillment companies
There are several compelling reasons why outsourcing fulfillment makes strategic sense for most e-commerce businesses:
- Cost savings: Fulfillment companies achieve economies of scale from working with many clients. Their infrastructure, technology and headcount gets spread across clients, bringing down per unit costs.
- Flexibility: Seasonal peaks and troughs are easily managed due to shared resources. Fulfillment companies also have excess capacity allowing for growth.
- Speed and reliability: They ship orders faster and more reliably due to expertise, infrastructure and shipping partnerships.
- Broad reach: Global fulfillment networks allow accessing customers anywhere. This enables expansion into new markets.
- Focus: Outsourcing fulfillment allows e-commerce businesses to focus on core competencies like product, marketing and customer experience.
Critical criteria for choosing e-commerce fulfillment companies
Choosing the right fulfillment partner is a very important strategic decision for e-commerce businesses. Here are some key criteria to evaluate:
- Location: Having fulfillment centers near target customers reduces shipping times and costs.
For example, if you are a foreign seller who sells on Japanese sites, you need to choose fulfillment centers located in Japan. With a warehouse network in Tokyo, Ezbuy Japan’s fulfillment service can be a good choice for you.
- Cost: Balancing service levels and costs to maximize profit margins. Getting quotes from multiple providers.
- Flexibility: Ability to scale up or down to handle order peaks and troughs. Month-to-month contracts allow changing providers easily.
- Shipping: Range of affordable shipping options (standard, express..). Integrations with shipping carriers to get best rates.
- Order accuracy: Excellent pick, pack and ship accuracy ensures high customer satisfaction.
- Returns management: Good returns processing minimizes headaches and costs.
- Reporting and analytics: Robust reporting and analytics helps get insights and optimize operations.
- Customer service: Responsiveness in resolving issues and answering customer queries.
- IT and integrations: Seamless integrations with e-commerce platforms, marketplaces and other tools in the tech stack enables data exchange and automation.
Carefully evaluating fulfillment companies on these parameters allows online retailers to find the right partner that scales with their business and meets their unique needs. It’s important to prioritize these criteria based on the specific requirements of your business and avoid making decisions solely based on cost. Ultimately, choosing the right ecommerce fulfillment partner can have a significant impact on customer satisfaction, operational efficiency, and profitability.
To foreign sellers operating in Japan, Ezbuy Japan's warehouse fulfillment service offers a cost-effective solution, with transparent pricing based on the storage space you use. Our service provides real-time order tracking, order insurance, and other value-added services to ensure your peace of mind and smooth fulfillment process.
Picking the right partner for your online business's order fulfillment is crucial for its success. To find the best fit, evaluate potential providers based on important factors like their location, costs, flexibility, shipping options, order accuracy, returns handling, reporting, customer service, and how well they integrate with your IT systems. Taking the time to do this careful evaluation can pay off by making your customers happier, reducing costs, and increasing your profits.
Ready to streamline your e-commerce fulfillment process and boost your business with the support of Ezbuy Japan? Get started today!