Marketplace fulfillment services: a lever for e-commerce growth

Good logistics management is essential to ensure an optimal shopping experience and achieve customer satisfaction on marketplaces. Indeed, these attach great importance to customer satisfaction and have strict rules for their sellers: the notorious SLAs.

Nevertheless, the storage of products, the time required to validate orders, shipping, delivery, order tracking and so on, is no easy task for marketplaces sellers. This requires a human and financial investment that is not always manageable… and profitable. This is precisely where marketplace fulfillment services come in…

But what is fulfillment exactly? Is it really an e-commerce growth lever? 👇

SUMMARY

1. What is fulfillment stock management on marketplaces?
          a. What is e-commerce fulfillment?
          b. The main stages of the marketplace fulfillment process
2. What challenges do marketplace fulfillment services address?
3. The benefits of marketplace fulfillment services
4. Questions to ask yourself before opting for a marketplace fulfillment service

1. What is fulfillment stock management on marketplaces?

Before getting to the heart of the matter, let’s start by looking at what e-commerce fulfillment is, the models that exist, and the main steps in the process.

a. What is e-commerce fulfillment?

Does supply chain ring a bell? 🤔 In e-commerce, fulfillment refers to the logistical management of goods, from storage to delivery to the end customer, including the management of returns, and sometimes even customer service.

There are several types of fulfillment:

• Fulfillment by merchant: the merchant manages everything from A to Z, from storage in its warehouse through to delivery. This model is generally used for small volumes of products or for products that require specific logistics management (preparation, packaging, etc.).
• Third-party fulfillment: the fulfillment steps are carried out by an external service provider, either by a logistics partner or by a marketplace that offers these services.
• Multi-channel fulfillment: one inventory to perform all your online orders on your different channels such as your e-commerce site, marketplaces, social networks… Some partners even offer in-store replenishment. Practical for e-tailers. 😉

It is important to note that most of the leading marketplaces have a fulfillment service: Fulfillment By Amazon or shipped by Amazon (FBA), Mano Fulfillment (ManoMano), Octopia Fulfillment (Cdiscount), Fulfillment By Back Market, Rakuten Fulfillment Network, TOOBone (Spartoo) and Cdon.

Furthermore, at BeezUP, our sellers manage their orders in Amazon, Cdiscount and ManoMano fulfillment directly from their account.

b. The main stages of the marketplace fulfillment process

📌 Storage: your goods are stored in one or more of the marketplace’s distribution centres or “fulfillment centres”. Upon arrival, your products are received and counted. They are then stocked.
You have, of course, real-time monitoring of your stocks.

📌 Order processing: before processing your first order, your shop is connected to the logistics centre, via your e-commerce CMS (WooCommerce, PrestaShop, etc.) or via API, if it is part of the multi-channel fulfillment offer. When an order is placed by a customer on the e-commerce platform, it is selected, packed and prepared for shipment.

📌 Shipment and delivery: once the order is ready, it leaves the fulfillment centre to be delivered to the customer at home, or at a relay point.

📌 Management of returns: delivery does not always mark the end of the fulfillment process, as sometimes customers ask to return their order for various reasons (non-compliance, exchange, etc.). In this case, the marketplace will check the goods and put them back in stock.

2. What challenges do marketplace fulfillment services address?

• Stock management

Fulfilling orders requires good stock management, which is no easy task in a multi-channel context. You need to be in all places at once to ensure that you don’t make out-of-stock sales, and potentially get penalised by the marketplaces…
This implies that you have enough storage space, but also staff for the physical management of stocks and updating on your e-commerce platforms.
This risk is even higher during sales peaks, during e-commerce events such as Peak Season, French Days or Prime Days…

Marketplace fulfillment services have several strings to their bow to reduce this risk. For example, Amazon Multi-Channel Fulfillment (MCF) allows you to perform orders from your other e-commerce channels, including your site.

• Order management

Order acceptance time and marketplace shipping time are generally very short. On Amazon, you only have 24 hours to accept orders and one day (by default) to prepare the items and ship them…

In order to successfully meet marketplaces’ SLAs, it is essential that you have a sufficient number of qualified staff, specific equipment adapted to your products, and software for logistics and distribution.

By choosing to use the marketplace’s fulfillment service, you are guaranteed to always comply with its requirements. 😉

• Delivery

The increasing expectations of online shoppers make delivery a major challenge in e-commerce. You need to be able to offer a wide choice of delivery options, as well as the best possible delivery times to your buyers… And all this at the best price! 💥

“78% of French e-shoppers say that high delivery costs make them abandon their shopping cart, and 44% of European consumers abandon their shopping cart if the delivery time is too long*.”
Sencloud

Marketplace fulfillment services have distribution centres located throughout the country and have preferential rates with their carriers. Their large volume of orders allows them to reduce costs and delivery times.

Reducing costs and delivery time will increase your chances of winning the buy box and attracting more customers.

Let’s take the example of Amazon. Buyers are used to the marketplace’s delivery services. The marketplace is very competitive and offers a number of benefits such as same day or Sunday delivery.

• Management of returns and customer service

“84% of respondents say they would be willing to buy from a brand again if the return experience was positive.”* 

Good handling of product returns is essential to generate positive reviews and build customer loyalty. To do this, start by offering a flexible and advantageous returns policy.

However, this won’t be enough… Whether it is to answer customer questions about product returns, or any other post-sales request, it is essential to have a reactive customer service.

Some marketplace fulfillment services, such as Amazon’s or Spartoo’s, offer customer service in addition to returns management.

💡 If this is not the case, remember that BeezUP allows you to reply to your marketplaces customers’ messages before and after the sale, directly from its interface.

* Getbyrd

3. The benefits of marketplace fulfillment services

As you can see, by using a marketplace fulfillment service, you will gain access to a string of logistical benefits:

• It saves time for your teams by offloading the logistics and even customer service (if included in the package).
• It improves customer satisfaction on your marketplace orders (reduces complaints, generates positive reviews…) and consequently, keeps your seller account top tier by meeting the SLAs
• It simplifies storage: reduces storage space (no storage if your supplier ships directly to the marketplace), equipment, software dedicated to logistics, etc.
• Marketing benefits offered by certain marketplace fulfillment services. For example, with FBA, you can offer delivery to Prime members, get the Prime badge on your eligible products, and have more chance of winning the Buy Box. This is a good way to loyalise your customers and mark yourself out from your competitors.
• Easier access to international markets. You no longer have to manage the different warehouses, delivery firms and even the customer service! Spartoo offers a customer service in 20 languages in its “TOOBone” fulfillment offer.
• An increase in your turnover thanks to the ability of these services to process large volumes of orders and products. It can also be a good option to take advantage of business events with peace of mind. 🧘
• Increased awareness of your products, which benefit from the marketplace’s brand image.
• A lower-risk financial investment, because you can rely on the know-how of a market leader.
• Possible handling of stock and shipping for your other sales channels, including your e-commerce site (as offered by Amazon via its Amazon MCF offer).

4. Questions to ask yourself before opting for a marketplace fulfillment service

While this list of benefits may sound like a dream, the drawbacks of the fulfillment model must be kept in mind. It is not beneficial for all business models, product types and budgets.
So, you have to ask yourself the right questions 👇

• How much does a marketplace fulfillment service cost? In general, you have a subscription cost for the “basic fee” plus:
  Costs according to the type of products: number, size, weight, assembly…

💰 The cost of getting your products to the distribution centre: is the distribution of stock to the different warehouses done by the fulfillment service? How much does that cost?
💰 The reception and storage costs: invoiced by unit or by pallet? Are there installation costs? Is dead (unused) space invoiced?
💰 Costs related to the preparation, packaging and shipment of items
💰 Costs depending on the countries you ship to
💰 Costs depending on the logistics management carried out by your other e-commerce channels (if multichannel fulfillment): your website? Of other marketplaces?
💰 Costs related to after-sale services…

As you can see, the more comprehensive the marketplace fulfillment service, the more expensive it will be…

• Will you charge this cost to the shipping costs or to the selling price?
• Which product types and categories are eligible? Are your products “outsized” or do they need bundling (kit products)?
• For which sales channels will you subscribe to the fulfillment service?
• Is real-time stock management possible? Do you need a fulfillment software to manage your stocks?
• Does the marketplace fulfillment service handle the countries you sell your products to?
• Is there a customer/after-sale service? If there is, is it adapted to your (international) customers? Is it in a position to answer specific questions about your products?
• Is the service compatible with your tools: CMS, feed manager?

In addition to these issues, you should be aware that the marketplace fulfillment process is less flexible (personalised packaging, customer relationship management, etc.). This can therefore potentially impact your brand image…

So, can we say that marketplace fulfillment really is an e-commerce growth lever? Well, as you can see, that depends on your e-commerce and your strategy!

It is clear that the fulfillment services offered by marketplaces offer a number of benefits, make your teams’ work easier, and provide growth opportunities for your business, even internationally.
They are also the best placed to meet their own requirements in terms of customer satisfaction!

However, if you don’t ask yourself the right questions upstream, they also have their fair share of risks, depending on your business model, the types of product you sell, etc.

Whether or not you are using fulfillment services, using a feed management software like BeezUP simplifies the management of your orders and stocks on marketplaces.
Indeed, regularly synchronising your source catalogue allows you to automatically upload your orders to your shop’s back office and to keep your stocks up to date… Provided you choose the best feed manager for your business model! 😉

Annabelle Granulant
Content Manager at BeezUP