What is fulfilment for marketplaces?

Large online marketplaces are popular among both novice and experienced sellers, as they allow them to launch their business quickly and at minimal cost. The platform provides an online store with a place to sell and a large customer base. But before starting work, a seller needs to understand what fulfilment for marketplaces is and how it works.

Як працює маркетплейс

Advertising and promotion of your own products are important, but no less attention should be paid to the logistical aspect. Marketplaces offer their sellers a choice of two schemes:

1. FBS (Fulfilment by Seller). In this scheme, logistics-related tasks are handled by the company itself. In other words, marketplaces do not deal with fulfilment, and the seller must find and equip a warehouse on their own, organise the delivery of orders to the end consumer, draw up documentation, etc.
2. FBO (Fulfilment By Operator). When choosing this scheme, fulfilment services are the task of a third-party contractor, which can be the marketplace itself or a specialised company. The latter takes care of all logistics tasks, from accepting goods from the supplier/manufacturer to delivering them to the buyer. The seller only has to pay for the services of the contractor.

Important! Fulfilment for marketplaces is an effective tool for online trading, provided that the assortment offered by the seller is in demand. In this case, the goods will not linger in warehouses, requiring constant financial expenses for storage space.

What services does fulfilment provide for marketplaces

In a general sense, fulfilment for marketplaces is a set of services related to the transportation, delivery, storage and documentation of goods. It may include:

• acceptance of consignments with checking the items specified in the documentation for availability, packaging integrity, and absence of defects;
• placement and targeted storage in the warehouse. Since the logistics company is responsible for the goods, it ensures that the conditions are right (temperature, humidity, protection against damage, theft, etc.) Each item is assigned a code that is entered into specialised software. This allows you to quickly find the right item;
• picking orders received from customers. At this stage of fulfilment, marketplaces or other contractors find the necessary goods in the warehouse, pack them, label them, and draw up the relevant documentation;
• ensuring delivery to the end consumer. Formed parcels are handed over to couriers or sent by postal operators;
• Work with returns. This involves accepting returned parcels, checking them for inconsistencies, defects, and responding to customer complaints.

Advantages and disadvantages

Having understood what fulfilment is for marketplaces, the seller has to decide which option to choose. Engaging a professional fulfilment provider will provide a number of advantages:

1. Saving costs on warehouse rent, maintenance, and warehouse workers’ salaries.
2. Freeing up the time that was needed to solve logistics problems to achieve the main business goals.
3. No weekends and holidays. Logistics processes are carried out continuously.

Important! Choosing a third-party logistics company will allow you not to depend entirely on the marketplace. This will allow you to sell goods on more than one platform. For example, you can combine sales on the marketplace and your website.

How to choose fulfilment for a marketplace

When choosing a contractor, pay attention to a number of aspects:

1. Clarity and transparency of tariff plans. When concluding a contract, it is important to fully understand how the amount of payment for services will be calculated and what items will be included. In some cases, marketplaces themselves provide fulfilment services at more affordable rates.
2. Storage and delivery conditions. It is necessary to understand what volumes of consignments of goods the warehouse is ready to accept, and what transport companies the contractor has contracts with.
3. Whether the company provides a service for handling complaints, returns, and claims from customers.
4. Convenience of tracking sales in your personal account. The information should be updated promptly and received in full.

Conclusion

When choosing one of the schemes of working on a trading platform (FBS or FBO), celery growers often prefer the second option. Obviously, such fulfilment for marketplaces is much more convenient and efficient than solving numerous logistics, warehousing, and documentation tasks on their own. Delegation of non-core business tasks allows you to free up resources for the development of new areas, finding ways to attract customers, entering untapped markets, etc.

The return of demand

Sales on marketplaces have long been a trend. According to the marketplaces themselves, about 75% of sellers have now returned to selling on their platforms after 24 February.

And consumer demand has grown significantly in the last months of the war. According to Kantar CMeter research, in October 2022, 7 marketplaces entered the TOP 25 most visited websites in Ukraine. Rozetka took the third place in the list.

But before you run headlong into sales on marketplaces, you need to understand their requirements. Of course, each platform has its own, but the basic ones are the same.

One of the main requirements is the pre-sale preparation of the product itself. This is what we will discuss in this article.

The basis of cooperation

As we wrote in our previous article, marketplaces are based on two schemes of working with clients.

FBS (Fulfilment by Seller) – when the seller directly sends the order to the customer, and FBO (Fulfilment by Operator) – when the orders are sent to the customer either by the marketplace itself, if you use its fulfilment services, or by a third-party company, where you also use fulfilment services.

Important! Choosing a third-party logistics company will allow you not to depend entirely on the marketplace. This will allow you to sell goods on more than one platform. For example, you can combine sales on the marketplace and your website. In any case, before you start selling your product, the seller needs to prepare it. That is, to make pre-sale preparation.

Let’s take the example of the Fashion segment to explain what pre-sales preparation includes.

Product Features

• Article no
• Size
• Category
• Color
• Pattern
• Gender
• Seasonality
• Style
• Country of manufacture
• Composition
• Other

Content

One of the most important components of sales on any platform. Don’t forget, the photo sells first and foremost.

Packaging and labelling of the product itself

FashionLogistics cooperates directly with Kasta and Rozetka marketplaces. Also, the contractor company can send orders directly to the client, which allows it to receive funds for orders directly from the client and sell through several sales channels simultaneously.

The goods must be unwrinkled, neatly packaged (the customer should be pleased to pick them up), and checked for defects. It must also contain a barcode for identification.

New solutions

Of course, in today’s reality, almost all marketplaces provide content production services. But what about the description (characteristics) and packaging of goods? As a rule, it takes a lot of time for the seller, thus taking away precious time.

Many sellers do not even know that there are already specialised companies on the market that provide these services. It is enough to send a request and confirm the terms of reference. Then, if necessary, the contractor company will deliver the goods to its warehouse, make a full description of the characteristics of the goods, mark them and fully prepare them for shipment to the client. There is no need to hire temporary staff, train them, or rent premises.

As a result, the seller, as in the case of the fulfilment service, saves on staff costs, rent and, most importantly, time!

FashionLogistics has been such a company for a long time. The company has more than 10 large sellers on marketplaces and 500+ thousand prepared goods.

Conclusion

Working with marketplaces is not as easy as it seems at first glance, but there are already companies on the market that can provide a full range of services for sellers. As a result, you save time and money that you can spend on business development.