Hybrid Fulfillment: Definition, Pros and Cons, Use Cases and How It Enables Faster Growth in eCommerce Sales in 2022
August 23, 2022
When an eCommerce company wants to make its selling process hassle-free, they primarily look toward a fulfillment company to streamline its supply chain process. Sometimes it is complex due to long distances or product types so a seller is expected to choose the delivery partner cleverly. Similar to other hybrid concepts, hybrid fulfillment combines two or more diverse things with one common objective to give you the best of both worlds which is fueled by a need to get order fulfillment for your online store in a more balanced way.
Your selected fulfillment strategy must change and expand along with your online store. In this blog, we will learn the importance of hybrid fulfillment, the pros & cons associated with it, and how to apply it in your eCommerce business. Also read about micro fulfillment marketplace.
What is Hybrid Fulfillment?
As the name suggests, hybrid order fulfillment is a flexible and diverse approach (sometimes a mixture of both) to fulfill orders. Here, fulfillment models including in-house fulfillment, drop shipping, and/or third-party logistics are used in combination with each other to fulfill orders. This kind of fulfillment approach gives eCommerce companies more flexibility in how they manage their supply chains and order types, whether they are engaged in D2C or B2B eCommerce.
Hybrid fulfillment services have been developed to meet the needs of retailers that are seeking hybrid order fulfillment by giving brands greater flexibility and more options to deliver orders to customers. This is similar to how businesses around the world have evolved into hybrid work models for partially remote and in-person environments.
WareIQ, an eCommerce fulfillment company, empowers online brands with a superior-tech platform to compete with Amazon like service levels by bringing their average delivery timelines from 5-10 days to 1-2 days.
Types of Order Fulfillment in eCommerce
Dropshipping
Dropshipping involves sending orders from a manufacturer or supplier directly to the end user. By using this fulfillment strategy, retailers are able to concentrate their time and efforts on other aspects of their business instead of worrying about inventory control or order fulfillment. It is a very hands-free approach that works well for firms that are just starting out or don’t have the capacity to handle inventory on their own, despite being competitive and lacking some quality control and monitoring.
In-House Fulfillment
When a company manages the full order fulfillment process in-house, including picking, packaging, and shipping as well as inventory management and eCommerce warehousing, it is known as in-house fulfillment. Businesses who opt to handle order fulfillment in-house engage with personnel, invest in the necessary tools, and acquire the necessary space either in their own home or a rented warehouse to handle orders effectively. Businesses that desire complete control over their logistical operations and have the resources to handle it all themselves without sacrificing the customer experience should strongly consider in-house fulfillment.
Third-Party Fulfillment
A third-party logistics (3PL) provider handles fulfillment in this type of fulfillment strategy. Every step of the retail fulfillment process is handled by a company’s 3PL partner, including warehouse receiving, inventory control, storage, picking and packing, and shipping. Fast-growing firms in the D2C and B2B sectors can entirely entrust the fulfillment process to professionals by outsourcing fulfillment service to a third party to accelerate eCommerce and D2C growth.
Hybrid Fulfillment
Hybrid order fulfillment is utilizing a combination of the above-mentioned fulfillment strategies rather than depending primarily on a single channel. This strategy allows for a more resilient supply chain to satisfy the constantly shifting market demands while also promoting growth, giving eCommerce enterprises more flexibility. A worldwide eCommerce company might continue to employ in-house fulfillment for local shipments, rely on a 3PL to handle international shipping, and engage with a drop shipper for particular items in their product catalog.
Businesses that are expanding quickly, provide a wide variety of products, cater to many markets with different expectations, and need a custom fulfillment solution to meet the needs of both the company and its clients may consider hybrid fulfillment such as outsourcing fulfillment of fast-moving products and fulfilling rarely ordered SKUs themselves, only fulfilling regional orders themselves, and offloading the rest to another form of fulfillment.
Benefits of Hybrid Fulfillment
Provides a Variety of Delivery Options
A hybrid fulfillment strategy will let you provide customers with more delivery options. The fulfillment provider you choose will have its own delivery options and costs, using multiple methods with better options available for buyers to receive their orders. Since hybrid fulfillment involves using the best fulfillment method for every stage, deliveries become more quick and seamless as a result.
Increases Fulfillment Speed
A large number of warehouses across the nation or in other countries is probably unaffordable. You can increase the number of fulfillment locations in your network by working with 3PLs. By doing this, you can provide inventory to potential customers wherever they may be. This closeness results in happier consumers and delivery timeframes that are frequently two days or less.
Suggested Read: Choose the Type of Warehouse for Your Business
Heightens Flexibility in Operations
The flexibility that a hybrid order fulfillment strategy offers is arguably its greatest advantage. With numerous approaches, you can avoid getting stuck in a bad scenario. Your 3PL or dropshipping partners can still take care of a lot of your customers if you are unable to fulfill orders because you have run out of packing material or your warehouse is out of stock.
If the increase in orders during a sale is more than you can handle, you can alter and assign more duties to a fulfillment partner. Hybrid fulfillment means you have more open doors to walk through to discover the ideal fit as your business expands and develops. And your spending habits reflect this flexibility. The hybrid strategy enables you to identify the least expensive solution for each circumstance and SKU.
Reaches New Buyers
You may be able to reach even more buyers if you use a hybrid fulfillment strategy rather than sticking with one fulfillment option. This is because a single fulfillment source would not get overburdened by fulfilling all of your orders. Hybrid fulfillment splits the workload so that everyone is able to do more, which will enable your online store to satisfy even more customers.
Facilitates Growth
By using a hybrid fulfillment strategy, you will be able to complete more orders in less time, which will benefit the expansion of your firm. Additionally, it means that you can relax knowing that order fulfillment is handled properly, freeing up your time to concentrate on other tasks like marketing and product development which will aid in the further expansion of your business.
Drawbacks of hybrid fulfillment
Has Less Consistency
There is no guarantee that hybrid fulfillment techniques will perform equally well. You might ship orders more slowly by relying on dropshipping than a 3PL. Additionally, it can take your dropshipper weeks to deliver an item to your clients. Perhaps you would also prefer to include unique packing inserts in each box but your print-on-demand vendor does not offer this option. Although it is not a deal breaker, it can be frustrating for entrepreneurs that pay close attention to detail and are working to create a unified eCommerce experience.
Is More Complex
The obvious drawback of hybrid fulfillment is complexity. It can be a lot of work just getting things up and running when you are using several methods and multiple partners are involved, each with their own systems and tools. You must make sure that there is constant communication about the shipped items, inquiries from customers, etc. When everything is taking place in one location, fulfillment can be monitored much more easily whereas you could feel like you’re spending more time organizing everything and finding information when you are using hybrid order fulfillment.
Real-World Use-Cases for Hybrid Fulfillment
For online stores, hybrid fulfillment is always a good option. However, there are many moving elements because you need to supervise numerous fulfillment activities. It can be difficult and time-consuming to manage your inventory across multiple locations and guarantee that orders are delivered on time using all of these varied strategies. Supply chain technology, on the other hand, makes it simpler to manage everything by centralizing crucial, real-time data. A hybrid fulfillment model can provide your company with the adaptability it needs to expand with the correct strategy, tools and technology. You should choose this option if you meet the following criteria:
- You already have a warehouse lease but you would like better coverage nationwide or in other countries
- You want to fulfill certain products by yourself
- You frequently test new goods, ideas, methods and channels
- You want to provide both pickup and delivery choices while you test out online sales for your brick-and-mortar company
- You have the resources to effectively coordinate all of the fulfillment need to execute your approach
- Large amounts of eCommerce merchandise needs to be stored and managed but you lack the space or don’t want to do it.
- To meet customer expectations and accommodate requests for product customization, you need a variety of fulfillment solutions
Differences Between Companies That Would Benefit From Hybrid Fulfillment vs Those That Wouldn’t
If you’re still unsure about whether hybrid fulfillment is a good fit for your company, the table below should be able to clear things up:
| Businesses That Benefit From Hybrid Fulfillment | Businesses Unlikely to Benefit From Hybrid Fulfillment |
|---|---|
| Large eCommerce businesses that need to fulfill numerous orders. | Small eCommerce businesses that only receive a few orders. |
| Businesses seeking rapid growth and expansion. | Retailers that sell easy-to-ship products. |
| eCommerce businesses that sell bulky, fragile or challenging-to-transport goods. | eCommerce businesses that focus on serving a local market. |
Conclusion: Why Choose WareIQ to Fulfill Your Online Orders?
Having a trustworthy eCommerce fulfillment partner is essential whether you decide to go with a hybrid fulfillment model or choose to outsource 3PL fulfillment. If you need assistance with a variety of eCommerce requirements, you can consider partnering with WareIQ.
WareIQ is one of India’s leading eCommerce fulfillment companies that uses technology to provide a competitive advantage to our customers. WareIQ can help your business by providing the following services:
- We offer a warehouse management system (WMS) that can integrate with more than 12 eCommerce marketplace fulfillment so that all your orders will be consolidated in one place and if you’d like to employ a hybrid method, you can even use WareIQ’s fulfillment network.
- We manage all aspects of your fulfillment process, from inventory management and storage through delivery to your consumers’ doorsteps.
- We provide ulta-fast delivery through our partnership with more than 20 shipping aggregators and automicatically assign the fastest and cheapest option for every order.
- You can store your inventory in our decentralized fulfillment centers across a nationwide network where orders are instantly chosen, packaged and shipped.
With your eCommerce store integrated with WareIQ’s best-in-class technology, any orders you relieve will be fulfilled to the highest standards.
Hybrid Fulfillment: FAQs
