There are many different types of fulfillment centers and warehouses available when it comes to storage and fulfillment. When you’re looking for ecommerce fulfillment, it’s important to make sure that you’re looking at the right type to suit your needs.
Since businesses and customers have different requirements when it comes to fulfillment, you can expect some major operational differences between B2B and B2C fulfillment centers. Some ecommerce businesses will require a fulfillment center that can handle both B2B and B2C orders, so it is important to evaluate what you are looking for when choosing one. Here is what you need to know about the differences in B2B and B2C order fulfillment as well as the differences in the fulfillment centers that handle the fulfillment process so you can determine which one is the best option for your business.
What is B2B Order Fulfillment?
In B2B ecommerce fulfillment, products are shipped directly to a business or other retailer (sometimes called B2R). Orders are generally large so that the receiving business will have enough inventory to sell from. When businesses place orders, it’s usually more efficient for them to do so in advance, and to order in bulk, so they don’t have to make purchases for more orders frequently.
Accuracy is extremely important with B2B order fulfillment services. Businesses may have compliance requirements, such as tax rules, product restrictions, SKU codes, parcel labels, barcodes or specific invoicing structure. Because orders are bigger and in bulk, shipments can be expected to cost more and have longer delivery lead times. Expect to get more familiar with carrier information that you’ll need to ship your products far and wide, like sea freight or air freight, and international trade barriers like taxes, tariffs, and subsidies.
If you choose to have your B2B orders fulfilled by a 3PL they should focus on providing fast and reliable delivery. Since businesses deal with other companies, they expect these fulfillment providers to be optimized for cost-cutting and increased efficiency. They also play a crucial role in the ability to meet orders in time. Delays and mismanagement on the part of a 3PL can harm the reputation of the company they represent, as well as incur penalty fees and refund losses that they might have to provide.
What is B2C Order Fulfillment?
As the acronym indicates, B2C orders will go directly to the end customer. B2C generally has a lower average order value than B2B does, and the process of order fulfillment for B2C is also often simpler since there aren’t as many regulations and specific requirements to follow when fulfilling single orders. B2C typically has set pricing and will display the same price for all customers, excluding seasonal or promotional activities that might occur. B2C payment processing is also more streamlined, typically because the online checkout process has been made easy for payment transactions.
With B2C customers you are generally fulfilling one-off purchases from individual end users. This type of order fulfillment has a relatively low barrier of entry because customers are typically buying directly from your website, and at this point many people are very comfortable with online shopping.
If you work with a 3PL to outsource your B2C order fulfillment, their role is to ensure that all orders are delivered damage-free, on time, and with accurate documentation—some also handle returns and refunds. Partnering with a third-party logistics provider (3PL) can bolster your company’s ability to deliver ordered products to customers faster—sometimes on the same day. Mismanagement, delays or errors on the part of a 3PL can lead to bad reviews for the manufacturer and additional costs in terms of refunds and returns.
What is a B2B Fulfillment Center?
When businesses order something, it’s more efficient for them to do so in advance and in bulk so they don’t have to spend time each day buying various items.
A B2B fulfillment center specialize in handling recurring, bulk orders, this means accuracy is extremely important. Businesses may also have compliance requirements, such as tax rules, product restrictions, barcodes, parcel labels, and invoices, so these warehouses must prove they can comply with these requirements.
Since orders are bigger and in bulk, shipments can be expected to cost more and have longer delivery lead times, as fulfillment can be via sea freight, air freight, or ground.
You can expect account managers for these warehouses value your relationship, as a lot of negotiating will be done and if successful, these large orders will be a recurring business for them in the foreseeable future.
What is a B2C Fulfillment Center?
A B2C fulfillment center is meant to handle large volumes of orders at a time, and these orders will be a lot smaller in size and weight compared to the bulk orders of a business. That being said, you can imagine how different a B2C warehouse operation would be.
For B2C fulfillment centers, both speed and accuracy are important in fulfilling orders, as customers expect quick, or same-day delivery. You should expect them to have updated technology and good management systems to keep track of all these shipments, as you’ll want to be able to generate reports to keep track of your business operations.
They are also able to offer special packaging features to enhance the unboxing experience – for example, using special tissue paper, gift wrapping items, or inserting personalized greeting cards.
These warehouses are also better suited to handling reverse logistics, a very common issue in ecommerce.
Depending on the type of business you run, you may have to deal with B2B order fulfillment, B2C order fulfillment, and likely both. Navigating the differences between each can be challenging, but hopefully now that you are more familiar with the terminology and concepts that make each one unique you are better equipped to make the right decisions for your brand.
If you are looking for a fulfillment partner we’d love to hear from you. Send us a note to connect about how we can help your company grow. You can read DCL’s list of services to learn more, or check out the many companies we work with to ensure great logistics support.