by Kent Moon, President, The Addressers

A fulfillment house is a company specializing in fulfillment services, on behalf of a company or product owner. Fulfillment, in this case, refers to:

-Sending out a product to someone who has ordered it by phone, mail or online, which is called order fulfillment

-Sending out literature to someone who has requested it, usually as part of a lead generation campaign, which is called literature fulfillment

Fulfillment typically will refer to the services provided by a company that offers to store products or literature, receive the orders, package, and then ship the ordered or requested item to the end consumer.

Storage and Warehousing

A fulfillment company stores items such as products or literature until an order or request for the item comes in. Special storage facilities can be provided for perishable items requiring refrigeration, temperature sensitive items requiring air conditioning or heating, or typical warehousing protection from the elements.

Fulfillment services often charge a storage fee based on the product storage requirements.

Inventory Control

A fulfillment company will typically maintain inventory counts as goods are shipped, and provide those inventories to the client on a regular basis. Reporting systems can be customized depending on the client’s needs.

Pick and pack services

Pick and pack is the process of selecting items currently being stored by the fulfillment company to prepare them for shipping. The fulfillment house has an employee known as a "picker" who receives an order manifest, then goes to the warehouse to find the items ordered. The picker takes the ordered items back to the packing station, and another employee known as a "packer" then checks to ensure all items in the order manifest are there and then packages the order. The product is labeled with shipping information.

Shipping

Most fulfillment companies will use shipping companies such as the USPS, UPS, DHL and FedEx. Often a fulfillment house, because of its high volume, can offer shipping discounts that their clients would not be able to get on their own.

Advantages

For relatively new products, the company producing them may not have adequate funds for storage facilities. Fulfillment companies typically have thousands of square footage for storage, and the storage costs they pass on to clients will typically be less than the clients would pay to store the products on their own.

Unless your company is shipping thousands of products per month, you will not get the "bulk" shipping rates available to fulfillment companies. The amount of savings can often be 30% or more. In some cases, the savings associated with shipping bulk rates can outweigh the costs of the fulfillment company itself, making the fulfillment costs effectively zero.

Similar to the savings associated with shipping costs, shipping materials (i.e. envelopes, boxes, labels, etc.) bought in bulk by a fulfillment company also are purchased at lower rates. Compared to purchasing supplies for shipping through places like Office Depot, savings can amount to up to 50%. Your potential savings depends on the fulfillment company.

For companies of all sizes, including small startups, using the services of a fulfillment house can be a cost effective solution, saving you money and taking a bothersome task off your plate.