Fulfilment Centre

A customer orders a product online, and the fulfilment centre receives the order instruction, locates stock, packs the item, labels it and hands it to a carrier, so the seller may never physically touch that order. Shopify describes receiving and storing inventory, picking, packing and shipping as core fulfilment-centre tasks, and notes possible fees for receiving, storage, returns and packaging when the work is outsourced.

Amazon's FBA overview describes a particular provider model in which sellers send stock to Amazon for storage and order fulfilment, and its service terms are not a general rule for every centre. Start with inbound control, because goods need receipt counts, identity checks and records for damaged or missing units, and a supplier's dispatch note is not proof that the centre received sellable stock.

Maintain accurate inventory locations, since a stock record should link a sellable item to a bin or zone and misplaced stock causes cancelled orders even when the accounting quantity looks sufficient. Define the order feed too, as the seller's store or marketplace must send the right SKU, quantity, address and service level and integration errors can create duplicate or missed orders.

Set cutoffs truthfully, because an order arriving before a stated cutoff may be packed the same day, subject to stock and operating hours, and carrier collection time is a separate constraint. Check pick accuracy, since the wrong colour, size or item creates a return and customer complaint and barcode scans or double checks can help but do not remove all error.

Choose packaging for the item, as fragile goods, liquids and temperature-sensitive products require different protection and branded packaging may cost extra. Clarify carrier handoff, since "shipped" can mean label created, parcel picked up or first carrier scan, so define the milestone before reporting it to customers.

Plan reverse logistics too: returns may need inspection, restocking, quarantine or disposal, and returned stock should not go back on sale without the appropriate condition check. Compare storage and activity fees, because a provider may charge per pallet, shelf, bin or cubic unit plus receiving, pick, pack and dispatch charges, so check minimum monthly amounts and extras.

An illustrative fulfilment handling cost per shipped order is included receiving, storage, pick and pack charges divided by shipped orders in the same period, so if those costs total $12,000 for 2,000 orders, the average is $6 per order, excluding carrier freight if not included. Volume affects the result, since fixed minimum fees weigh more heavily on a small seller and an unusually large order may cost more than the average, so price by order profile when practical.

Check geographical fit as well, because a nearby centre can reduce some transit time but stock placement, carrier network and cutoffs determine actual service, so avoid universal delivery promises. Control inventory ownership, since outsourcing storage does not necessarily transfer ownership to the provider and the contract should state loss, damage and insurance responsibility.

Set service reports on receipt time, inventory accuracy, on-time dispatch and pick accuracy, because they show different outcomes and a fast dispatch figure does not prove correct orders, and prepare for peaks by agreeing capacity, forecasts and overflow plans rather than assuming unlimited throughput. Keep customer data secure, as order feeds include names, addresses and contact details and access and retention should fit applicable privacy requirements and the contract, and for owners a fulfilment centre converts inventory into dispatched orders, so the key decision is whether its capacity, accuracy, fees and service fit the seller's order mix.