How To Start A Fulfillment Center Business

By John Moran, freelance writer.

It may seem like Amazon is the only eCommerce game in town these days. Obviously, they have an outsized share of the market, but there are loads of small eCommerce stores opening up all the time. People with niche products or homemade goods are always going to sell well outside of Amazon and people are taking advantage.

Because of this increase in eCommerce stores, there is a bigger demand for fulfillment services. This is a perfect opportunity for those that are looking for the perfect business model to build on. Instead of opening an eCommerce store with its risks and competition, fill the need of those that have a store instead.

In this article, I will go over how you can start a fulfillment service yourself and be on your way to a successful business.

Find a space

You can start as big or small as you like, but make sure to have the right space to get started. You’re likely to start out in a small space that is already used to save some money. It may even be possible to lease out some space to share with other companies as well.

Just make sure that you upgrade the space to be modern if it is an old structure as you should be using technology to streamline your operation. Hire a company like Miner Corp for loading dock repair to make sure it suits your fleet and is not going to cause any injuries.

The other key is to have the ability to expand quickly in case the business grows faster than you expected. An undersized space is much worse than having too much.

Streamline with software

Having efficient operating processes is essential to avoid repetitive jobs being done, miscommunication, and botched orders and deliveries. It pays off big to have a CRM or software that helps you stay organized when it comes to everything from your internal organization, to coordinating with a sales team to dispatching orders correctly.

There are plenty of logistics apps out there that help with your warehouse management and even more for your customer orders and shipping.

Set up and understand your KPI

How do you know if your company is working well? It’s by having a set of metrics that show you if you are doing things well or if there is work needed.

These metrics are called Key Performance Indicators or KPI. The two key indicators to pay attention to are the order lead time and return rate. If your time to process the orders to when they are shipped is too long then you are going to start having problems with your clients.

And return rate is an indicator that there is an issue with your packaging that is causing products to get broken before they reach the customer which will see you start losing clients. Pay attention to these numbers and have a plan to fix them before they start having a knock on effect for your other aspects of the business.


Author:

John Moran is an American who enjoys the fine art of living well. His interests include anything wine, food or nature related especially when enjoyed with friends and family.

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