A Guide To Marketplace Fulfillment | Flowspace

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What Is a Marketplace?

A marketplace allows multiple vendors and brands to sell their products for a fee through the same online storefront, while the retailer or marketplace operator sells its own products alongside these third-party sellers. An example of a marketplace is Amazon. Amazon has its own products listed right along with products from other brands.

What Is Marketplace Fulfillment?

Marketplace fulfillment is the process of fulfilling products sold on marketplaces. One approach to selling on marketplaces involves delegating the task of fulfillment service to the marketplace itself. This marketplace fulfillment strategy outsources the storage, determines the shipping method, handles the return process, and even provides customer service to the marketplace provider. For example, sellers can sell on the Amazon marketplace, but they can also take advantage of Fulfillment by Amazon. This means that Amazon handles warehousing, picking, packaging, shipping, and returns. Other approaches include third-party order fulfillment, in which a brand outsources operations to a partner capable of fulfilling orders from marketplaces as well as other sales channels, and self-fulfillment, in which a brand manages storage and fulfillment operations directly. Marketplaces are an increasingly popular way for DTC brands to reach new customers and increase sales.

Benefits of Marketplace Fulfillment

Using a partner or relying on the marketplace itself for marketplace fulfillment allows a brand to get its products in customers’ hands quickly and offers a larger reach than if the brand were to handle the fulfillment process themselves. The brand won’t have to find room for overflow storage, won’t have to pay warehousing fees, won’t have to worry about transport stress, and won’t lose time managing returns. Choosing to sell on a marketplace can also help a brand expand to new or even international markets without having to pay for foreign warehouse management or send goods to foreign countries since most marketplaces have local distribution centers.

Downfalls of Marketplace Fulfillment

While marketplace fulfillment has some major benefits, there are also some downfalls as well. While Amazon is a marketplace that also handles fulfillment, that’s not common. Typically brands rely on individual third-party logistics companies (3PLs) or partners to manage fulfillment for marketplace orders as well as other channels. This can often mean working with a 3PL just to handle marketplace orders, which separates that fulfillment operation channel from other fulfillment operation channels. The other side of being able to borrow the reputation of a marketplace is that if the marketplace takes a hit, your brand will take that hit as well.

Does marketplace fulfillment make sense for your brand?

Deciding whether marketplace fulfillment makes sense for your brand is key before settling on a sales and fulfillment strategy. The first thing to decide is whether or not to outsource fulfillment operations. Self-fulfillment has a low initial investment and is easier to get started, but it’s harder to scale and can get expensive fast as your brand grows.

How to get started and optimize marketplace fulfillment

It’s important to understand each marketplace your brand wants to sell on. That includes understanding their customers and their fulfillment requirements. A key to success in scaling marketplaces is to create the same customer experience on a marketplace as the consumer would have received if they purchased on your own website. For that, brands need a fulfillment solution that can satisfy consumer expectations for “Prime-like” delivery. Flowspace’s OmniFlow Visibility Suite offers brands real-time visibility into inventory, orders, and fulfillment activity across all channels. This can help streamline fulfillment and tracking and provide that omnichannel experience needed to succeed across multiple channels. Marketplace fulfillment is an exciting development for a growing ecommerce brand and has some distinct advantages for brand scale. Ensuring that you’ve done your research and have the tools you need can make sure marketplace fulfillment is a successful strategy for your brand.