A fulfillment house is a company that specializes in providing product fulfillment on the behalf of the product owner.
Types of fulfillment company services[change | change source]
Standard types of these services are as follows: storage and warehousing (company stores an item until and order for that item is received), inventory control (maintaining and publishing inventory counts), pick and pack services (preparing ordered items for shipping) and shipping (outsourcing to courier or delivery companies).
Outsourcing to a fulfillment house or company[change | change source]
Advantages of outsourcing to such companies are: facilities (in early stages of business development you may have no place and money needed to store your items), shipping costs (because of special shipping rates when you ship thousands of items, which is not available for small companies), shipping materials costs (same reason as before), fulfillment costs (beneficial pricing when all fulfillment activities are bundled in one order), e-Commerce  (fulfillment houses use advanced e-Commerce systems to help in management).
On the other hand disadvantages of outsourcing are: indirect control (if there are any problems with services provided by the fulfillment company the blame and bad reputation will be on your company's shoulders) and product damage or shrinkage (fulfillment companies won't take full responsibility for any product damage or shrinkage until they're proven directly responsible).