Fulfillment service in e-commerce logistics

Abstract

Background: The logistics service of e-commerce is usually limited in the literature to the issue of product delivery to customers. However, before goods are sent to the customer, the vendor has to order them from the supplier. Next, they are taken into the warehouse and stored, and after the order has been placed, they are packaged and sent to the customer. These processes are defined in e-commerce as fulfillment. Due to their complexity and time and cost pressure of e-customers, they are more and more often conducted by external operators. Despite the dynamic development of the fulfillment service in e-commerce practice, this still remains a relatively unknown issue in management theory. \n \n\tThe aim of this paper is to present and analyze the fulfillment service in e-commerce logistics. The author has made an attempt to indicate and define the main models of logistics processes connected with the fulfillment service in e-commerce logistics, their strengths and weaknesses. An additional aim of this paper was to recognize development directions of the market of fulfillment services. \n \n\tMethods: For the needs of the paper research was conducted using the methods of direct observation and analysis of primary and secondary sources. The primary materials included data obtained from companies providing fulfillment services in Poland and abroad, and the secondary ones - reports, studies and Internet sources. In addition, in-depth interviews were performed with representatives of companies that offer fulfillment services or those which are potential bidders. \n \n\tResults: The article characterizes the details of the fulfillment service, whose importance has been increasing in e-commerce logistics. The author has described the division and characteristics of the fulfillment service models and discussed the potential trends in the fulfillment service market. \n \n\tConclusions: The presented review and characteristics of various implementations of fulfillment services allows to evaluate to what extent logistic processes should and could be delegated to specialized companies in order to focus on the core competencies only. The usage of fulfillment service is useful especially at the phase of the rapid growth of the e-company. It involves, however, also some disadvantages, such as relatively high fees, a lack of physical contact with the goods, a partial loss of control over the process.

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