## When Should a Company Invest in Fulfillment?
**Factors to Consider**
Deciding whether or not to invest in fulfillment is a complex decision that should be based on a number of factors, including:
**1. Order volume**
The number of orders a company fulfills each day, week, or month is a key factor in determining whether or not to invest in fulfillment. A high order volume can justify the cost of investing in a dedicated fulfillment center, while a low order volume may not.
**2. Order size**
The average size of an order is another important factor to consider. Large orders may require more space and equipment to fulfill than small orders.
**3. Product type**
The type of product a company sells can also impact the need for fulfillment. Some products, such as food or perishable items, require special handling and storage.
**4. Delivery time**
The speed at which a company needs to deliver orders can also be a factor in the decision to invest in fulfillment. A company that needs to deliver orders quickly may need to invest in a fulfillment center that is located close to its customers.
**5. Cost**
The cost of fulfillment is a major factor to consider. Investing in a fulfillment center can be a significant expense. However, the cost of fulfillment can be offset by the benefits of increased efficiency and customer satisfaction.
**Benefits of Investing in Fulfillment**
There are a number of benefits to investing in fulfillment, including:
**1. Increased efficiency**
A dedicated fulfillment center can help a company to improve its efficiency by automating the picking and packing process. This can lead to faster order fulfillment and reduced labor costs.
**2. Improved customer satisfaction**
A fulfillment center can help a company to improve customer satisfaction by providing faster and more accurate order fulfillment. This can lead to increased repeat business and positive word-of-mouth.
**3. Reduced costs**
In the long run, investing in a fulfillment center can actually help a company to reduce its costs. This is because a fulfillment center can help to improve efficiency and reduce labor costs.
**4. Greater control**
Investing in a fulfillment center gives a company more control over the fulfillment process. This can help to ensure that orders are fulfilled accurately and on time.
**5. Scalability**
A fulfillment center can be scaled up or down to meet the changing needs of a company. This can help a company to avoid the costs of over-investing in fulfillment or the risks of under-investing.
**When to Invest in Fulfillment**
The decision of whether or not to invest in fulfillment is a complex one that should be based on a number of factors. However, in general, companies should consider investing in fulfillment if they:
**1. Have a high order volume**
**2. Have large or bulky orders**
**3. Sell products that require special handling or storage**
**4. Need to deliver orders quickly**
**5. Are looking to improve efficiency, customer satisfaction, and reduce costs**
**How to Invest in Fulfillment**
There are a number of different ways to invest in fulfillment, including:
**1. Building a dedicated fulfillment center**
This is the most expensive option, but it gives a company the most control over the fulfillment process.
**2. Outsourcing to a third-party logistics (3PL) provider**
This is a less expensive option than building a dedicated fulfillment center, but it gives a company less control over the fulfillment process.
**3. Using a hybrid approach**
This approach involves using a combination of in-house fulfillment and outsourcing to a 3PL provider. This can be a good option for companies that have a moderate order volume and need to balance cost with control.
The best way to invest in fulfillment depends on the specific needs of a company. However, by carefully considering the factors discussed above, a company can make an informed decision that will help it to improve efficiency, customer satisfaction, and reduce costs.
## Checklist for Deciding When to Invest in Fulfillment
**Yes** | **No**
—|—|
Do you have a high order volume? |
Do you have large or bulky orders? |
Do you sell products that require special handling or storage? |
Do you need to deliver orders quickly? |
Are you looking to improve efficiency, customer satisfaction, and reduce costs? |
If you answered “yes” to three or more of these questions, then you should consider investing in fulfillment.