The basic idea of fulfillment is getting an item from the supplier to the customer. That’s a deceptively simple description, however, and there is an entire industry contained in it! In the past few decades, with the rise of digital commerce and logistics technologies, fulfillment has become one of the most innovative areas of the economy.
One of the biggest divisions in the field of fulfillment is B2B versus B2C. If a third-party logistics company is handling your B2B fulfillment as if it’s B2C, you are probably losing money and even being held back from everything that your organization could be doing. Here’s an overview of some of the big differences between these two models and why it’s important that your fulfillment partner get it right.
Packaging
The typical B2C fulfillment project involves small boxes, with each one containing either a single item or just a few different ones. That box is left on the customer’s doorstep typically, where they pick it up and open it themselves.
A B2B shipment looks very different! Rather than a single box, it’s typically a pallet or multiple pallets with hundreds or even thousands of individual items boxed up. Moving those pallets obviously requires more than just workers carrying boxes on their own, so forklifts and other mechanical equipment are used in the warehouse.
Payment Structure
A fulfillment provider that serves mainly B2C customers will most often process credit card numbers as the form of payment. Each transaction is relatively small, and there are many individual transactions to track.
B2B fulfillment may involve credit card payments, but more often it is based on invoices, purchase orders, and other direct communications between sellers and buyers. The average payment amount is much larger than the average B2C transaction.
In B2B fulfillment, there can also be complications due to unexpected fees or “chargebacks.” Purchase orders frequently have stipulations about how shipments must be packaged, processed, and delivered, and if one of the parties fails to comply with those stipulations, the invoice could be altered from its original amount.
Shipping Method
As mentioned before, B2C fulfillment usually concludes at a home, or possibly a business. The person who actually leaves the package at the recipient’s address is typically a worker for UPS, FedEx, or another commercial delivery service.
B2B fulfillment most frequently involves the service of a freight carrier, who sends a truck to the fulfillment provider’s facility, loads the shipment, and delivers it to the B2B customer’s facility. This process may sound simple, but there are many potential hiccups along the way that could cause costs to rise unexpectedly.
“Accessorial fees” is a category of charges that are incurred whenever a truck driver encounters trouble in making a delivery as expected. For instance, if a driver arrives at a B2B customer’s facility but all loading docks are occupied by other trucks, he may be forced to wait for an hour until a dock opens up. That delay would trigger an added fee. Freight carriers also sometimes charge extra fees for delivering to a military base or a facility where security is exceptionally tight.
If a 3PL provider is inexperienced in B2B fulfillment, they may not be prepared to anticipate and avoid these circumstances, resulting in accessorial fees that get billed to their client. A fulfillment provider, however, that has extensive experience working in the B2B space is better able to know exactly what to look for and how to make sure that the final invoice amount is what the client was expecting to see.
Volume
In general, B2B fulfillment involves higher volumes than B2C fulfillment. This doesn’t just mean a larger facility is needed, although that is certainly part of it. It also means that your fulfillment provider needs to have an incredibly organized, well structured system in place for every part of the fulfillment chain. A single mistake made during receiving, inventory management, or shipping doesn’t just involve a single $30 order headed to a home; it involves thousands of dollars and many customers later on in the process.
This is one reason it is critical to consider more than the simple up-front monthly contract price that a servicer provider quotes. That low price could be very deceptive if the fulfillment provider is inexperienced or disorganized, as accessorial fees, costly mistakes, and other issues add to the amount that you ultimately have to pay. That doesn’t include, of course, the long-term costs of having B2B customers decide that they can’t trust your organization to come through with dependable fulfillment for their orders.
Trust The B2B Fulfillment Experts
If you’re on the hunt for a B2B fulfillment partner that you know you can trust to handle your orders, Spectra is a fantastic choice. For more than 26 years, the Spectra team has been providing fulfillment services for large national companies and small startup businesses alike. We’ve helped our clients thrive through the huge shifts in the economy over that time, and even the unpredictable, devastating effects of the global COVID-19 pandemic. Our proven success with industries of all types gives our new clients confidence that we can come through on the promises we make.
Our blog archives contain multiple case studies to illustrate just how capable our fulfillment team is. Large corporations regularly run small pilot programs with us to find out how our team works, then ultimately decide to dramatically expand their relationship when they see just how experienced and professional our experts are.
Whatever industry your organization works in, Spectra has a slate of services that can be perfectly customized to meet your needs. From standard items to specialty products that require specific spot testing and labeling requirements, we offer flexible “value add services” so that you know each shipment is received, stored, and shipped just the way you want it done.
Curious about specifics? Book a free consultation and we’ll be happy to put together a quote for your B2B fulfillment needs. We can’t wait to meet you!
