Let`s face it that there’s no one-size-fits-all answer about fulfillment.
Based on whether or not an enterprise sells throughout more than one channel, gives a subscription container service, or ships to clients throughout the world — order success calls for planned delivery chain-making plans and execution to fulfill ever-converting marketplace demands.
To set up an agile delivery chain, certainly considered one among the largest tendencies we’re seeing in success is the concept of going “hybrid” to meet consumer expectations, live competitively, optimize costs, and decrease risk.
Let’s take a more in-depth have a take a observe what hybrid achievement is, how groups can gain from it, and whether or not it`s a very good alternative for you.
Hybrid Fulfillment Definition
Hybrid fulfillment is defined as a flexible and various technique to fill orders, which makes use of a mixture of various fulfillment models, consisting of in-house fulfillment, dropshipping, and/or 3PLs.
With this type of fulfillment method, e-commerce businesses will get more freedom in terms of managing their supply chain.
Types of Fulfillments
Today, e-commerce groups have extra alternatives on a way to control fulfillment than ever before. Here is a summary of the most common types of fulfillments:
- In-House Fulfillment
In-house fulfillment means that a company handles the entire fulfillment process, from warehousing and inventory management to picking, packing, and shipping.
Companies that choose to process their orders in-house hire staff to buy the equipment and space they need to process their orders efficiently (whether at home or in a warehouse rental).
In-house fulfillment is a great option for companies that need the ability to take full control of their logistics operations and manage everything themselves without compromising the customer experience.
With drop shipping, the company’s supplier or manufacturer sends the order directly to the end customer.
This fulfillment method allows merchants to focus their time and energy on other parts of the business without having to manage inventory or ship orders.
Although competitive and lacking in quality control and monitoring, this is a fairly hands-free approach and is suitable for companies that are just getting started or who do not have the resources to manage their inventory.
- Third-party Fulfillment
Third-party fulfillment relies on a third-party logistics provider (3PL) to handle the fulfillment.
The company’s 3PL partners handle all aspects of the retail fulfillment process. That is, pick-up, inventory management, warehousing, pick-and-pack, and shipping.
Outsourcing fulfillment to third parties allows fast-growing brands, both direct customers and B2B space, to fully delegate the fulfillment process to professionals.
- Hybrid Order Fulfillment
Hybrid order processing uses all or part of the fulfillment approach above, rather than relying on just one.
This approach gives the e-commerce business more flexibility and enables a more resilient supply chain to meet the ever-changing demands of the market while enabling growth. For example, a global e-commerce company can maintain local shipping in-house, use 3PL to handle international shipping, and work with drop shippers for specific items in the product catalog.
Hybrid fulfillment needs a customized fulfillment solution to meet the needs of companies and their customers, delivering fast-growing, diverse products, serving different markets with different expectations. It’s a great option for companies to do (such as fulfillment outsourcing). Fast-moving items that rarely fulfill orders for the SKU itself, such as fulfilling only regional orders).
Advantages of Hybrid Fulfillment Method
The hybrid fulfillment model is flexible and customizable, making it a popular approach for growing e-commerce businesses. With a variety of fulfillment strategies to choose from, it’s easy and reliable to change direction.
Selecting “Hybrid” for your fulfillment strategy gives you the freedom to test new products, processes, and channels without taking too much risk.
The hybrid approach can be more cost-effective if it is well-established, as you can choose from multiple fulfillment options. You need to think strategically about which products will be shipped and how.
For example, if you are planning to launch a new product line, dropshipping may be more cost-effective because you do not have to store large amounts of inventory or increase shipping costs.
Or, if you sell large and heavy items but don’t have the equipment and resources to meet them, outsourcing to 3PL can save storage, labor, and equipment costs.
How Can You Know if the Hybrid Fulfillment Method is Right for You?
Hybrid fulfillment is an option in the e-commerce business. However, there are many moving parts because you need to manage or at least monitor multiple fulfillment operations.
Managing inventory in different locations and ensuring on-time order fulfillment through all these different approaches can be difficult and time-consuming.
However, supply chain technology makes it easy to manage everything by centralizing important real-time data.
With the correct strategies, resources, and technology, the hybrid fulfillment model can give your business the flexibility it needs to grow.
This approach is ideal for you if:
- You rented a warehouse but want better coverage on the other side of the country (or another country).
- You just want to self-actualize a particular product.
- You are always testing new products, concepts, processes, and channels.
- You’re trying out online sales in a physical store and want to offer both pick-up and delivery options.
- You have the resources to efficiently manage all the different ways of implementing a strategy.
- You have no facilities or don’t want to store and manage large amounts of e-commerce inventory.
- Other fulfillment options are needed to meet product customization needs and meet consumer expectations.