Setting up a small business is difficult, but the process has been made a little easier over the past ten years with the advent of the internet, and specifically the process of online shopping. In the past, if you wanted to sell things to people, you were going to need to get an inventory and make all of the decisions that would be involved in pricing and profits margins, then you were going to need to set up an entire process by which people could find your products and purchase them. This would entail renting or purchasing a physical space that was zoned to allow sales to happen within it, build out the store itself, hire a staff to sell the products and provide them with the ability to take money from customers. While this process varied from business to business, the main components that were necessary were pretty much universal. With ecommerce becoming accepted by consumers as a safe way to make purchases, the industry of selling items online and delivering them to customers through order fulfillment processes was born. Ecommerce was able to sell items for cheaper prices than traditional stores, due to the fact that the need for physical spaces where people could shop was eliminated, as well as the need for employees that would sell the items to consumers. Through these cost reductions, prices were able to be brought down past the point of typical retail, making the online shopping experience more attractive to those who were price motivated.
The one aspect of the process that remained in the physical world was the order fulfillment component. A person still needed to physically put the order items in a box and arrange for the transport of that order to a customer. This generally entails storing the inventory in a warehouse that is rented and employing people to work in that warehouse in order to process orders. This remains one of the few physical aspects of the entire shopping experience that people have when they purchase through the internet, and over the last few years a new industry has arisen that eliminates the need for even these aspects. This new industry is handled by “order fulfillment companies” and they essentially take care of all aspects of the process from the time that an order is placed on a website until that product is received by a customer.
These businesses are contracted by the ecommerce merchant to house inventory in their warehouses in a cooperative environment, allowing for the necessity to only pay for the space that is used instead of speculating on how much square footage is necessary to rent. Because all transactions are handled by the employees of the order fulfillment company, multiple businesses are able to safely store their inventory in the same space without threat of theft from outside people. The orders themselves are received by the fulfillment company through the use of a software that receives the order when it is placed on the website. This information is transmitted to the owner and to the fulfillment company, who then pulls the order from the inventory on hand and processes it for shipping. The fees that are charged to the owner of the business are for storage of the inventory and processing fees for each order received. These fees will many times allow for not only the ability to have the orders handled by professionals who need no direct supervision from the business owner, but also will create savings over what costs would be absorbed if the business itself ran the fulfillment aspects themselves. Order fulfillment companies provide a win win for customers and businesses alike, reducing costs as well as concentrating exclusively on the shipping process, making for a better experience for all.