June 26, 2011 AT 12:01 am

More Entrepreneurs Hire ‘Fulfillment’ Outfits to Store and Ship Their Products

Mk-Bm984 Fulfil Dv 20110622164649

More Entrepreneurs Hire ‘Fulfillment’ Outfits to Store and Ship Their Products @ WSJ.com

Brett Teper faced a logistical problem when he and a partner founded ModProducts LLC’s ModKat, which makes high-end litter boxes for cats, a few years ago. The New York City residents needed a way to cheaply store and ship their bulky goods.

Their solution was to outsource product distribution to Shipwire Inc., one of several services that small- and medium-size businesses are increasingly using for storage and shipping, or “fulfillment.”

With Shipwire, Mr. Teper doesn’t touch his products. They are sent from a Taiwanese manufacturer to a Shipwire warehouse near Los Angeles, where they are packed. When a customer buys off ModKat’s website, an employee approves the order, which then goes directly into Shipwire’s system. The boxes are shipped within 24 hours.

The service “allows us to do this without really thinking about … fulfillment and logistics,” said Mr. Teper.

Businesses such as Shipwire, Webgistix Corp. and Amazon.com Inc.’s Fulfillment by Amazon, among others, do the work. EBay Inc. plans to test its own service this year, a spokeswoman for the online marketplace said. A small group of eBay sellers in the U.S. and China will be able to have eBay handle all parts of fulfillment. It’s unclear whether eBay would run its warehouses or use a contractor.

We often get asked if we ever plan to outsource our shipping, we do not. But it is an option for the kit maker/maker business who does not want to do shipping. Lots of small companies we know do outside fulfillment and they seem to be happy with the results. If you use any of these services post up in the comments and share your experiences (as a customer or as a partner).

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  1. These sort of services seem to be most useful when you have a small number of large products, for a business like ours with a large number of small products the set up costs (which seem to be charged per line) seem to outweigh the potential benefits.

  2. I am thrilled to hear that you don’t plan on changing your current order fulfillment system; yours has always been the best and fastest I have ever experienced.

  3. Currently using Amazon for a storefront and some fulfillment and it works OK once you debug the process. However, we are looking at in-sourcing more of these operations so that Amazon can’t decide to pull an Apple and Sherlock us.

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