If you are are an eCommerce merchant you've probably heard about fulfillment networks or 3rd party logistics (3PLs). Fulfillment networks like Amazon FBA & Shopify Fulfillment Network (SFN) are incredibly powerful. If you can afford the cost they’ll store, pack, and ship all of your orders for you.
They handle an entire area of your business for you. For a merchant this is 25-35% of your responsibility. So being able to outsource this obligation and focus on other areas of your business can be massively helpful.
But calculating if a 3PL is worth the cost is complex. Shipping costs themselves are a nightmare of complexity. If you have more than 1 item in your store you will probably just understand the range of shipping costs to get several items from point A to point B. Trying to figure out a fair cost for the 3PL on top of regular shipping costs is challenging to say the least.
And there are challenges beyond just costs. You have to order and send in your products according to their schedule and in their preferred formatting. With all of that overhead switching 3PLs is painful and costly.
So fulfillment networks have some serious costs. But they also allow eCommerce entrepreneurs to live that idyllic lifestyle where you order piña coladas on the beach while your business continues to generate revenue. 🏖
Let’s look at the costs, procedures, and the tradeoffs for two of the biggest fulfillment networks: Shopify Fulfillment Network (SFN) and Amazon FBA so you have a baseline understanding of when and how you'd set up a 3PL for your own e-commerce store.Continue Reading…