“Commodity” versus “value-added” order fulfillment

By: Jim Pettinger, President of UCanTrade, Inc.
Third-party fulfillment warehouses have existed for many years, originally developing to handle “mail order” from various catalog companies, large and small. However, with the recent explosion of e-commerce and other internet sales, it’s become a whole new ball game. A major trend is the differentiation between low-cost, high-volume “commodity” sales, mainly to consumers, and higher-price, lower-volume sales, both to consumers and businesses (e.g., retailers). Typically, the latter require a variety of “value-added’ services because their customers have more clout and can request special services, such as unique packaging, price tags and point-of-sale materials. Unfortunately, many “newbies’ to the fulfillment game are caught in between because they have few sales and need “hand-holding” as they learn the ropes. We usually recommend they invest in some initial hand-holding from a value-added fulfillment company while they work through their initial marketing, product and packaging issues.
Naturally, the largest and most prominent example of a modern commodity fulfillment operation is “Fulfillment by Amazon” (FBA). If you’re new to the game, it’s worth doing some research via Google to fully understand the requirements and costs (fees, surcharges and returns).
TradeTips blog is published by UCanTrade, Inc., your cross-border experts since 1984.
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UCanTrade Staff