The road ahead: Outsourcing of E-Commerce Fulfillment

With e-commerce witnessing double digit growth over the past few years there has been an increased complexity to manage the fulfilment process. It has been noticed that rising customer demands, logistics cost and global distribution are the major factors affecting the profit margins of the e-commerce industry. It has been observed that 41% of the major players observe fulfilment as a barrier to the growth of e-commerce industry. In order to achieve economies of scale mid-sized ecommerce companies can outsource their fulfilment services to a company that has the ability to share back office systems, ware house space and human resources with other companies, hence allowing orders to be fulfilled for less than 10 percent of the revenue. The cost savings arising out outsourcing the fulfilment operation has enabled companies to identify potential service providers in the fulfilment area.