5 Steps To Start Your Own Fulfillment Center Business

There are important steps to take in order to start your own fulfillment center business. In 2020, e-commerce retail sales increased by a whopping 43% in the U.S. In the wake of the pandemic, customers still rely heavily on online shopping. As e-commerce becomes more and more mainstream, the need for spaces to fulfill online orders increases also. As an aspiring business owner, start your own fulfillment center that offers services to existing e-commerce and brick-and-mortar retail stores and start a lucrative business. Read the following guide to get you started on this fulfillment center business journey.

Create a Business Plan

First, create a business plan for your fulfillment center. Write a comprehensive plan that outlines the entire development and trajectory of your business. Ahead of time, prepare for potential challenges and then generate solutions. Always determine the limits and needs of the company. Here, you should identify the leadership and staffing needs of the fulfill center. Establish the company’s startup costs, projected earnings, and day-to-day operations. Furthermore, conceptualize the customer persona and marketing strategy of your business with your team. While planning, register your business with the IRS and state tax agency. You will receive an Employee Identification Number to substantiate your business identity. Indeed, make an actionable business plan to start your own fulfillment center.

Determine Your Type of Fulfillment

Once you have written the best business plan, it is crucial to determine what type of orders your center will fulfill. Carve out your business role and the type(s) of business you will service. This helps you specify which e-commerce businesses to reach out to. Decide if your center will store products as well as ship them out. Establish with your team whether the center will only serve to track, package, and ship items. Importantly, identify what competitive advantage you offer to customers that they cannot find with a different fulfillment business partner. Bear in mind that there are multiple ways a fulfillment center can cater to e-commerce businesses. Absolutely, arrive to a clear understanding of your business functions to save a lot of time and energy.

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Find a Space

Next, you need to find a physical space to operate your fulfillment center. Start in a relatively small space that is partially in use or lease out space with another company. This saves money and allows you to commence operations quickly. If the space is outdated, modernize it to suit your business needs. Accommodate for the technology you will use in your space that will streamline your fulfillment process. Always ensure that the space itself is safe for use. This ascertains the technology and loading docks will not cause any injuries. Also, make sure the space is complementary to your type of fulfillment service. Always allow space for expansion, in case your business grows faster than expected. Definitely, find a space that is safe and scalable to host your fulfillment center operations.

Create A List Of Necessary Equipment

Then, create a list an essential list of equipment. Remember that your business should increase the efficiency of the flow of goods. Choose relevant and functional equipment that will streamline your order fulfillment process. Determine what type of storage equipment you need in your space—such as warehouse shelves, racks, and bins. Then, list what material handling equipment is required for your services. These entail transporting, loading, and positioning equipment. Importantly, choose appropriate packing and shipping equipment as they will be fundamental to the shipping aspect of the business. You will need materials to assemble, package, and label orders for your end customers. Finally, you need modern inventory management software to identify each item of your inventory. Get e-commerce software, barcode readers, printers, and labels to track your inventory. Certainly, list and invest in the best equipment to jumpstart a fulfillment center.

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Hire Staff

Last but not least, hire staff to handle your fulfillment business. Consider hiring logistics employees if you offer distribution services. These employees will arrange the shipping and tracking processes and track new arrivals to the facility. Always hire experienced individuals who can physically meet the demands of your business. They should be able to lift items and operate the relevant machinery. Additionally, consider hiring a fulfillment manager. This individual can make sales calls and connect with clients. Enlist a warehouse manager to install management systems and train personnel in the warehouse. Indeed, having the right staff will set your fulfillment center up for future success.

To wrap up, there are a few steps to take in order to start your very own fulfillment center business. This includes making a thorough business plan for the development and possible outcomes of your center. Then, define your type of order fulfillment business to determine how your business will function and serve others. Then, find a space that is suitable to conduct fulfillment operations. Always consider scalability and safety to secure your business. Next, create a list of the equipment you need for your type of work and invest in a variety of materials and equipment to start. Finally, hire the best staff to manage fulfillment and warehouse operations. These steps will guide you to your goal of becoming a fulfillment center business owner.