e-commerce Order Fulfillment

A big strategic issue for online retailers is whether to perform order fulfillment activities internally or to outsource them. Building central warehouses, stocking them with adequate inventories, and developing systems to pick , pack and ship individual orders requires substantial start-up capital but may result in lower overall unit costs than would paying the fees of order fulfillment specialists who make a business of providing warehouse space, stocking inventories, and shipping orders for online retailers.

Outsourcing is likely to be economical unless an ecommerce business has the high unit volume and the capital to invest in its own order fulfillment capabilities. Overstock.com, an online superstore consisting of thousands items has partnerships with many leading brand-name companies and uses outsiders to stock and ship those products.