You know when you order something online and it arrives at your doorstep a few days later? Well, it usually has to go through multiple steps to get to you. The company you've ordered from needs to first create the product, store it, manage it, send it to the shippers, and ensure it gets to you. It's a long process and can end up costing a lot of money, which raises the cost of the products.
However, with the use of direct fulfillment, the entire supply chain gets a little bit less stressful. It allows e-commerce brands to sell products straight from the warehouse/wholesaler directly to the customer, putting the handling into another's hands and giving them time to focus on what they do best.
Keep reading to learn more about direct fulfillment and how it can benefit your e-commerce business.
Direct fulfillment, also known as direct-to-customer, DTC, or D2C, is a service that e-commerce businesses use to outsource their goods storage, inventory management, and shipments. A direct fulfillment business or logistics company is the provider that handles all this work.
They ensure that the goods from the e-commerce company go directly to the customers swiftly and on time without any issues. It's sort of like dropshipping. An e-commerce company will send the items directly from the manufacturer straight to the customer instead of to separate retailers or their own storage facilities. The DTC company handles the entire supply chain, but the direct fulfillment part focuses mainly on storage, picking, packing, and shipping.
We can tell you what direct fulfillment is, but the best way to understand it is by learning how it works. The process starts from the moment the e-commerce brand provides the DTC company with an order, and it goes through the following steps:
You now know how the direct fulfillment model works, but what advantages do e-commerce businesses get out of using them?
Here are some of the main benefits:
One of the main benefits of direct order fulfillment for e-commerce sites is that they don't have to pay for warehousing, storage, and inventory management. This is because the work is outsourced to a third-party company, like Portless, that handles all of those things together.
Instead of paying separately for things like rent, utilities, and labor costs, it's all handled together and provided in one fee when the products are moved from the manufacturer to the customer. This frees up capital that can be placed in other parts of the business, allowing them to grow.
Not only do e-commerce companies benefit from lower storage costs, but they also pay less for shipping. This is because when they ship products directly from the manufacturer to the customer, they eliminate a wide range of steps in the supply chain, moving goods between distribution centers. Since direct fulfillment centers are the only place the goods are kept before they are sent to the customer, this reduces outbound shipping costs.
The DTC company will also work hard on the logistics part of the shipping, ensuring it's using the most optimized routes and helping the orders get to the customers as quickly as possible. This doesn't only benefit the e-commerce brand with lower costs but also the customer.
Far too many businesses, especially when they are run online, will manufacture and store a surplus of products even before they know the demand. This leads to overproduction and, therefore, a bunch of wasted items that might never even make it to the customer. If there is an expiry date on the goods, they might also spoil before they can be sold, which leads to even more waste.
With direct fulfillment, e-commerce brands only sell what is ordered. The DTC company will receive the order, move it from the manufacturer's warehouse, and ensure it gets straight to the customer. Many businesses are turning to a direct fulfillment program so they don't spend too much of their budget on creating items for which they won't get profit.
In today's fast-paced world, customers want their goods faster than ever. Sometimes, an e-commerce business cannot do this alone, so a direct order fulfillment model does it for them. By cutting out the middleman and eliminating various steps in the supply chain, the time taken for customers to receive their products from the manufacturer to their doorstep is drastically reduced.
DTC companies use the most efficient practices in the supply chain to reduce the chance of any delays as well. This, in turn, helps with customer satisfaction, increasing their chances of leaving the brand a good review and even returning in the future. It puts e-commerce companies ahead of the competition and hit their goals.
E-commerce stores can significantly increase their margins, especially with things like Section 321 or the fact they don't have to pay out for any container costs. There's no need for any handling fees as it's going straight from point A to point B with no in-between. Similarly, most of the customer orders placed in direct fulfillment are under $800, which is the maximum value for Section 321, where imports into the US can get rid of duty fees.
By using this streamlined approach, e-commerce brands don't have to tie their cash flow up, increasing their overall profit margins for each sale. It also allows them to offer competitive pricing, which puts them ahead in the industry, helping them secure more sales overall.
Have you ever seen a product you really want, but you can't get it because it doesn't ship to your country? It can be frustrating. Luckily, with direct fulfillment, this doesn't need to happen anymore. Since the e-commerce brands are working directly with the manufacturer, they can source suppliers in each region they want to cater to.
This reduces the extortionate duties and customs costs businesses usually have to pay to ship internationally, and it also helps them expand their brand worldwide. The next step for any company is to grow and bring in a larger customer base, and with the help of a DTC company, they can go global with complete ease.
Direct fulfillment can do a lot for an e-commerce brand, from lowering shipping and storage costs to allowing them to bring in more profits and grow. However, before you can move toward direct fulfillment, you need to find a partner to help you.
Portless ships e-commerce orders directly from our fulfillment center in China straight to your customers' front doors! We use the most seamless processes to ensure you can save on both costs and time, giving you the space to focus on growing your company.
To get started with Portless, simply get in touch today.
