Start A Fulfillment Business

Start A Fulfillment Business

About

As e-commerce becomes the pillar in our retail landscape, fulfillment businesses are becoming more important.

Fulfillment companies enable e-Commerce by processing order receipts, packing, delivering, and handling returns from clients. These businesses act as a third-party warehouse and their core responsibilities include preparing and shipping orders. Thus, they store goods until they are ready to send to stores and customers. If you are planning to start a fulfillment service, some of the services will include:

  • Same day-delivery
  • Customer support through chat, text, and phone call
  • Complete order tracking from arrival at the fulfillment center to delivery to customer's door
  • Custom API integration
  • Climate-controlled storage space

To start a fulfillment center you need to find space, streamline with software, and set up and understand business KPIs with the target e-Commerce companies.

Starting a fulfillment business requires a great deal of effort, dedication, and most importantly passion.

If you're interested in how to sell fulfillment services, or selling fulfillment services online, you can use this page as a guide for everything you'll need to know.

Key stats

market size
$2.7B
revenue (monthly)
$3.79M
starting costs
$16.8K
gross margin
83%
time to build
360 days
growth
SEO
business model
E-Commerce
time investment
Full time

About

As e-commerce becomes the pillar in our retail landscape, fulfillment businesses are becoming more important.

Fulfillment companies enable e-Commerce by processing order receipts, packing, delivering, and handling returns from clients. These businesses act as a third-party warehouse and their core responsibilities include preparing and shipping orders. Thus, they store goods until they are ready to send to stores and customers. If you are planning to start a fulfillment service, some of the services will include:

  • Same day-delivery
  • Customer support through chat, text, and phone call
  • Complete order tracking from arrival at the fulfillment center to delivery to customer's door
  • Custom API integration
  • Climate-controlled storage space

To start a fulfillment center you need to find space, streamline with software, and set up and understand business KPIs with the target e-Commerce companies.

Starting a fulfillment business requires a great deal of effort, dedication, and most importantly passion.

If you're interested in how to sell fulfillment services, or selling fulfillment services online, you can use this page as a guide for everything you'll need to know.

Key stats

market size
$2.7B
revenue (monthly)
$3.79M
starting costs
$16.8K
gross margin
83%

 

time to build
360 days
growth
SEO
business model
E-Commerce
time investment
Full time

Startup Costs

Min Startup Costs Max Startup Costs
Office Space Expenses $0 $7,000
App Creation Costs $1,099 $20,099
Software Expenses $162 $2,894
Advertising & Marketing Costs $0 $2,500
Website Costs $13 $215
Training & Education Expenses $0 $850
Total Startup Costs $1,274 $33,558

Successful Businesses

Business URL Rank
TJX tjx.com #7,752
ShipMonk shipmonk.com #12,847
Shipwire shipwire.com #17,211
Rakuten Super Logistics rakutensl.com #42,045
Flowspace flow.space #59,108
Shipfusion shipfusion.com #59,381
Fulfillman fulfillman.com #67,795
Best Buy Careers bestbuy-jobs.com #75,624
Radial radial.com #84,847
Red Stag Fulfillment redstagfulfillment.com #96,109
Product Fulfillment Services efulfillmentservice.com #100,632

Pros & Cons

Pros Description
Flexibility You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own.
Ability to start your business from home It's not necessary to have a physical storefront or office space to get your business started. You can do everything from the comfort of your own home, at least in the beginning!
Rewarding work Starting a fulfillment business can be really rewarding work. After all, you are solving an immediate issue for your customer and you're working on something you truly care about.
Scalable With businesses and processes changing daily, there will always be demand for new features, products and services for your business. Additionally, there are several different business models and pricing tiers you can implement that will allow you to reach all types of customers.
Traffic to your website A fulfillment business gives people a reason to visit your website and to keep coming back to you!
No overhead costs To get your fulfillment business started, there are no costs associated with overhead, storage, packaging, etc. This will save you a lot of time and money!
Cons Description
Crowded Space Competition is high when it comes to your fulfillment business, so it's important that you spend a good amount of time analyzing the market and understanding where the demand lies.
Motivation of employees If you plan to have a sales/content team on board, finding creative ways to motivate them can be a challenge. It's important that you're able to offer great incentives and a good work environment for your employees.
Longer Sales Process A fulfillment business can be a big time and money investment for your customer, so it's important you plan and predict a longer conversion funnel and stay in communication with potential customers.
Security Issues With any Saas business, data loss and security issues may arise throughout your process of building your product. It's critical that you understand exactly what you're responsible for and how to avoid potential issues down the road.
Isolation Often times, as a fulfillment business, you typically work alone and do not have much face-to-face interaction with other team members.
Taxes As a fulfillment business, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.

Marketing Ideas

  • 1

    Affiliate Program

    Affiliate marketing is a great way to bring in a new revenue stream, especially when you don't sell products or services.

    Simply put, an affiliate program is an agreement where a business pays another business or influencer ("the affiliate") a commission for sending traffic and/or sales their way.

    The affiliate typically gets a unique link where clicks and conversions can be tracked.

  • 2

    Direct Sales

    Direct sales strategy implies a direct contact between a seller and a consumer without the involvement of any third party. Direct selling is popular in sectors where sellers communicate with their clientele personally. The sales technique occurs at non-store locations which include at home, work, or online.

    For direct selling to succeed, hire a few (or many) salespeople to support the sales conversion process. It's critical that you assign them specific roles and responsibilities to nurture the client and provide excellent support.

  • 3

    Word of mouth

    Word of mouth is when a consumers reflects their interest in a company’s product or service in their daily dialogues.

    Therefore, word of mouth advertising is essentially a free advertising triggered by the customers experience.

    According to Nielsen, 92% of people trust recommendations from friends and family.

    Therefore, in today’s hyper-connected world, a single recommendation through a word of mouth can have a huge impact to your business.