Fulfillment is simple at a brick and mortar store. The customer

pays for the merchandise and carries it away. However,

fulfillment is more complicated for a mail order business or a

business that is selling via the Internet.

Fulfillment includes taking the order, packing, shipping and

processing the financial transaction. It could also include

customer service, technical support, inventory management, and

processing refunds, returns and warranty claims.

Fulfillment is a vital but costly aspect of operating a

business. Your situation determines which approach works best

for you.

1. Drop Shipping Drop shipping is an arrangement in which a

wholesaler or manufacturer agrees to fulfil orders from items in

their warehouse. You make the sale, conduct the financial

transaction, and send relevant data to the company to process.

Since the company ships the merchandise, you do not have to

arrange warehousing or inventory management.

Many businesses will not agree to drop shipping, as they find it

more profitable to process large orders instead of individual

orders. However, there are exceptions. Find a company that

produces merchandise that you would like to sell then contact

them and see if they will negotiate.

Alternatively, look for a company that promotes drop shipping.

Run a Net search or a Yahoo search for "drop shipping." Before

signing a drop shipping agreement, ask for references from

satisfied merchants.

2. Set Up Your Own Mail Room Micro businesses might set up a

"mailroom" in the basement. It's cost effective, but labor

intensive.

You will need a means of processing payment (i.e. credit card

capabilities) and a means of keeping track of inventory, orders,

refunds, etc. Yahoo's Small Business category lists numerous

companies selling software for small business management.

Larger small businesses might opt to set up a mailroom in the

workplace and assign employees to handle order fulfillment. This

allows the most control over fulfillment as everything is done

on site. You can ensure that knowledgeable people handle

customer service, that packaging is appropriate, and that

refunds, warranties and are processed in a timely manner.

3. Integrated Fulfillment for the Web

Businesses that are adding online sales to their regular

operations require software that integrates with the existing

system, manages inventory, facilitates customer service and

generally handles all aspects of fulfillment.

If you're too large for the basement mailroom and too small to

outsource, you might consider using one of the companies that

are catering to small business. Check out Yantra, Manugistics

and EXE Technologies.

4. Fulfilling Digital Products

Businesses selling only digital products (computer documents,

software, music, video, etc.) have the easiest time with

fulfillment. You will need a web site, shopping cart software to

take the order, and a means of processing payment. The most

automated businesses use technology that serves automatic

download information to the customer upon processing a

transaction.

Online businesses might opt to purchase web storage, shopping

carts, encryption for secure ordering, and a credit card

processing service individually. Alternatively, they might look

for a "one stop shop" that handles the entire thing for a fee.

The former is likely to be lower cost but labor intensive; the

latter could be more costly but simpler to set up and manage.

To find ecommerce providers, run a Net search for "ecommerce

billing fulfillment service".

5. Out-Source to a Fulfillment Firm

If your sales justify it, you could outsource the entire process

to a fulfillment company. This may or may not be more expensive

than doing your own fulfillment. Calculate the cost of on-site

fulfillment and compare the price.

Out-sourcing reduces your control over fulfillment, as well as

the amount of contact you have with your customers. If customer

contact is very important to your operations, or if you need to

explain your product to customers before making a sale,

outsourcing might not be your best choice.

Before signing a contract, consider these issues: 1.Will the

company package your merchandise appropriately? Can they handle

your perishable products quickly? You want to avoid returns of

damaged goods.

2. Does the firm process orders quickly enough to accommodate

your turn-around time?

3. Is the company strategically located? Shipping costs and

transit times will be reduced if your fulfillment company is

located close to the majority of shipping addresses. For

example, 74% of the U.S. population lives close to or in UPS

zone five. A company situated in that region might be a good

choice for businesses that sell primarily to the US public.

4. Are sales reps assigned to your orders and are you permitted

to train them?

5. Can the firm provide references from customers running

similar operations to yours?

As the comedian said, "Delivery is everything."