With the holidays around the corner, chances are you’re gonna do some shopping online. Companies like Amazon have made last-minute Christmas shopping a breeze with next day or same-day shipping. How are businesses able to ship packages so fast? Is it magic? Nope, it’s fulfillment centers.
Modern technology has made it easier than ever to shop online. Fulfillment centers make it possible for customers like you to get your package the next day. These centers handle everything from inventory, order processing, and shipping– they’re pretty much like Santa’s workshop.
Keep reading to delve deeper into the fulfillment center definition, keep on reading:
Fulfillment Center Definition
Fulfillment centers are warehouses used by e-commerce businesses to handle customer’s orders. Businesses utilize these centers when they have limited space and want to outsource shipping.
How Does a Fulfillment Center Work?
Once inventory is sent to the fulfillment center, it is sorted and stored in stock. Most fulfillment centers are connected to businesses’ point-of-sale systems.
So, when a customer orders an item from the stock, the information is relayed to the fulfillment center. Orders are received as soon as they are made. This explains why so many companies are able to ship our orders super fast.
The process after the order is received is called pick, pack, and ship. A team member in the fulfillment center picks the ordered item from inventory.
In the packing stage, a staff member will compare the item to the order details for accuracy. After the item is packed, it is shipped using the most affordable delivery service.
Not only can fulfillment centers process and ship orders but they also handle returns too! There isn’t a standard process for handling returns, this is usually up to the merchant’s discretion.
Unopened items can be added back to the inventory stock or inventoried for clearance or donated.
Of course, this is only a brief breakdown of fulfillment centers. To learn more about the process if takes to fulfilling orders click here.
The awesome thing about fulfillment centers is that they allow businesses to send out more orders at lightning speed and increases customer retention. Let’s take a deeper look at how fulfillment centers are great for businesses.
How Fulfillment Centers Benefit Businesses
It’s obvious that fulfillment centers changed the game for online shopping. More and more merchants and utilizing fulfillment centers and here’s why:
- Fulfillment Centers Increase Revenue
Like mentioned earlier faster and efficient shipping increases customer retention, and studies show that customer retention increases revenue by 80 percent. This is because it’s easier to sell to an existing customer than a new one.
- They Create Brand Loyalty
How do you think Amazon created such a loyal customer base? Their super fast and convenient shipping has made them a favorite for millions of shoppers. Many other businesses are following their lead and using fulfillment centers.
Now that you know the fulfillment center definition, you’re all caught up on how some of your favorite online stores get your orders delivered to your door. We talked a lot about how fulfillment centers are great for merchants but they are a lifesaver for holiday shoppers.
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