If you want your brand to dominate the market, it’s helpful to have a presence in multiple places at once. By utilizing multiple sales channels, customers are more likely to discover your products and gain awareness of your brand.
Contrary to popular belief, it doesn’t have to be difficult to incorporate new sales channels into your business. In this article, we’ll discuss the advantages of multi-channel fulfillment and how you can incorporate it into your business model.
What is multi-channel fulfillment?
When discussing multi-channel fulfillment in 2018, there are two popular meanings that we’d like to differentiate between: Multi-channel fulfillment vs. Amazon Multi-Channel Fulfillment.
1. Multi-Channel Fulfillment
In general, the term “multi-channel fulfillment” can refer to any business model that fulfills orders originating via more than one sales channel.
Multi-channel sales is about allowing customers many ways to discover and order your products.
Multi-channel fulfillment is about fulfilling orders from multiple channels using a single collection of inventory. This allows companies to create highly efficient fulfillment processes, reduce overall costs, and diversify their markets.
2. Amazon Multi-Channel Fulfillment (MCF)
Another popular reason you may hear this term is in regard to Amazon Multi-Channel Fulfillment. In this case, it refers to the Fulfilled By Amazon (FBA) program specifically. This service enables businesses to access Amazon’s global fulfillment network as well as their world-class operational expertise. Ultimately, it allows retailers to consolidate shipping logistics and fulfillment regardless of where an order originates, whether on Amazon.com, the retailer’s own website, or other sales channels. However, the costs of FBA MultiChannel Fulfillment can quickly cut into your profit margins and make your pricing uncompetitive.
What are the advantages of multi-channel fulfillment?
Increased product discovery & expanded brand reach
By maintaining a presence on multiple sales channels, you can heighten brand awareness, boost sales, and expand your company’s reach into new markets. Customers will often stay loyal to their favorite platforms, such as Amazon or Walmart, because they have learned to trust them. When a customer discovers your brand on a platform they already trust, they may be more likely to purchase your product than if they discovered it on your website. Using multi-channel sales and fulfillment allows you to access existing markets with greater ease.
Efficient use of inventory storage
With inventory managed from a centralized location, you can maintain an efficient flow of inventory received and orders fulfilled. Your business can fulfill shipments just as easily using one warehouse or multiple locations because one system is managing all orders. This can help reduce stale inventory and shrinkage.
Leveraging inventory
Multi-channel fulfillment also empowers you to leverage your inventory across multiple markets. This can enable you to streamline your purchase orders and manage inventory more efficiently during seasonal changes.
Efficient returns management
With centralized returns management for all sales channels, your business can reduce costs associated with processing returned orders and ensure they are managed effectively.
Centralized analytics
By managing all of your fulfillment data in one central system, your company can easily analyze consumers holistically and individually. Comparing channels side-by-side will provide key insights into different markets so you can customize your strategies on each sales platform.
Centralized analytics will also enable an improved ability to leverage cross-channel information. Your team will be empowered to use marketing research from one channel to improve sales in other channels.
Why is it important to choose a fulfillment center that enables multi-channel fulfillment?
When choosing a fulfillment center, make sure to choose a partner that will support your growth. Multi-channel fulfillment is not supported by all 3PLs. It’s important to choose a logistics provider that is able to provide this benefit, so your business can become more flexible and scalable.
In order for multi-channel fulfillment to run efficiently, inventory must be synchronized across all sales channels so inventory levels are constantly updated. If your fulfillment center doesn’t enable multi-channel fulfillment, inventory levels can quickly become incorrect, causing backorders and frustrated customers.
A fulfillment center should make your life and business easier, so choose a partner that can support multi-channel fulfillment.
What are some of the best online sales channels through which to offer your products?
This answer depends on where your target audience hangs out online. Options may include:
- Your own website
- Amazon
- Walmart
- Jet
- eBay
- Rakuten
- Bing
- Houzz
- Groupon
- Facebook, Instagram, and other social media channels that enable ordering
Incorporating Multi-Channel Fulfillment in Your Business
The high fees charged by FBA MultiChannel Fulfillment can be prohibitive to small businesses. Instead, consider partnering with a reliable third-party logistics provider (3PL) to incorporate multi-channel fulfillment into your current operations.
The process of using a 3PL is fairly simple:
- Ship inventory from your supplier to your warehouse(s).
- Integrate all of your sales channels with your centralized inventory management system.
- Orders are fulfilled from your available inventory and shipped according to your predefined guidelines.
- Emails with tracking information are automatically sent to customers.
- Inventory is synchronized and updated across all sales channels.
- Your customers receive their products quickly and become happy, loyal brand advocates.
- In the case of a returned order, the same centralized inventory system supports refunds and exchanges according to your predetermined specifications.
With the help of a great 3PL and their team of experts, your business can benefit from efficient inventory management and streamlined fulfillment while expanding your reach into new markets.
