Hybrid Fulfillment: What Is It and How Can It Benefit Your Online Store?
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Hybrid feels like a bit of a buzzword at the moment. There are hybrid cars on the road, and hybrid working models post-pandemic, but what about hybrid fulfillment?
Hybrid fulfillment is the same principle as other hybrid concepts, combining two or more different things with the same goal, to give you the best of both worlds.
When it comes to order fulfillment for your online store, you need to get it right. Your chosen fulfillment model needs to adapt and grow with your ecommerce business.
Hybrid fulfillment can often be the ideal solution if you’re running a successful ecommerce store, but what is it and how can it benefit your business? Read on to find out!
What Is Hybrid Order Fulfillment?
Hybrid fulfillment is the process of combining multiple different methods of fulfillment to fulfill your ecommerce orders.
These can include dropshipping, 3PL (third-party logistics), and self-fulfillment. Hybrid fulfillment allows you to optimize and personalize your fulfillment strategy for the best possible results.
Types of Order Fulfillment
In order to fully get to grips with hybrid fulfillment and how it works you need to understand the different types of order fulfillment that you can use as part of a hybrid model.
Dropshipping is a fulfillment method that has rapidly grown in popularity in recent years.
With dropshipping, when someone places an order from your online store, that order is sent directly to your supplier who will package and ship the order directly to the customer.
Rather than having to invest in large quantities of inventory, you’ll simply pay for each item that’s actually purchased, making it a great option for those with small budgets or minimal storage space.
Dropshipping allows you to take a complete step back from order fulfillment and is seen as a stress-free approach to fulfilling online orders.
3PL fulfillment is the concept of outsourcing your fulfillment to a third party. The third-party provider will manage all of the fulfillment processes for you such as storage of inventory and stock management, order processing, packaging, and shipping.
3PL allows you to hand over the fulfillment process to an expert while still being able to order in your own stock and oversee elements such as quality control and design.
Self-fulfillment, also known as in-house fulfillment, is when you oversee and manage the whole fulfillment process yourself.
This includes ordering and managing inventory, storage of stock, order processing, packaging, shipping, and overseeing returns.
Usually, to manage the fulfillment of orders yourself you will need a team of staff and dedicated space either within an office or a warehouse.
If you want to keep control over the whole order process then self-fulfillment is the right choice. However, it’s only an option for companies with a huge budget who can afford staff and warehouse space or small businesses who are only expecting a very small volume of orders.
Print on Demand
Print on demand builds even further on the dropshipping method of order fulfillment.
Whereas with dropshipping the item already exists before a customer orders it, with print on demand, products are only created once an order has been placed.
This is largely due to the fact that print on demand orders are usually personalized and bespoke.
Print on demand companies will receive the order directly and manufacture the product before processing, packing, and shipping orders to customers.
Applying Hybrid Order Fulfillment
When it comes to applying a hybrid fulfillment method to your online store, there are various ways that you can approach it.
Like any hybrid model, it’s important to combine the options that will work best for your personal brand and will provide you with the best results.
The different ways you can create a hybrid fulfillment model include
Different methods for different products – This is probably the easiest way of creating a hybrid fulfillment model and allows you to choose the best fulfillment option for individual items.
For example, you may decide that for high-value or fragile items you want to operate self-fulfillment, but for cheaper and non-fragile goods you will outsource to a third-party provider.
This makes splitting the fulfillment easy and each provider knows exactly what they are in charge of. It can, however, sometimes prove complicated if a customer places an order that includes multiple items that fall into different fulfillment categories.
In this instance, your customer may end up with multiple shipping bills, order labels, and packages which won’t necessarily lead to the best customer experience.
Different methods for the same products – This approach is usually used when businesses want to divide their shipping geographically.
For example, you may be based on the west coast and decide that you’re capable of self-fulfilling all orders that are being delivered to west coast addresses, but you’ll outsource the fulfillment to all other locations, including international orders.
This will usually require a more logistical setup and you’ll need to keep a close eye on stock levels. For example, you may run out of one item faster on the west coast than on the east coast, which may lead to delivery delays.
Mixed methods – A mixed approach allows you to use multiple, overlapping fulfillment methods.
For example, if you sell furniture from your online store you may decide to use one fulfillment option for chairs and sofas, another for tables, but both for soft furnishings.
In order to operate a mixed approach like this, you’ll need to be on top of your logistics and planning and will need to ensure that all of your chosen fulfillment providers can communicate with each other.
Often the additional workload of managing the logistics of this makes outsourcing fulfillment in the first place pointless and there are very few times when this would be the best model for your business.
4 Benefits of Hybrid Order Fulfillment
Hybrid fulfillment has become popular for a reason and there are various benefits to adopting a hybrid model to fulfill your online orders including:
Adopting a hybrid fulfillment model can be a great way of saving money. It gives you the chance to test multiple different fulfillment methods to find the ones that work best for you, preventing over-spend.
For example, if your items are large, investing in 3PL may be cheaper than paying out for storage space. If you’re introducing a new line of products, dropshipping may allow you to save money while you monitor demand.
More Delivery Options for Customers
A hybrid fulfillment approach will undoubtedly allow you to offer more delivery options to customers.
Each fulfillment provider you choose will have its own delivery options and costs, meaning using multiple methods to fulfill your order will broaden the options available for customers to receive their orders.
Reach New Customers
Rather than sticking to one fulfillment option, if you opt for a hybrid model you’ll have the potential to reach even more customers.
This is thanks to the fact that one fulfillment provider won’t become overwhelmed with fulfilling all of your orders. Instead, by sharing the load, each will have more capacity, helping your online store to serve even more happy customers.
A hybrid fulfillment approach will allow you to fulfill even more orders in a shorter space of time, helping your business to grow.
It also means that you can rest assured that order fulfillment is well taken care of, enabling you to focus on other areas such as marketing and product development.
Is Hybrid Order Fulfillment For Me?
If you’re still wondering whether or not hybrid fulfillment is right for your business, take a look at the table below to help you out.
|Businesses that benefit from hybrid fulfillment||Businesses unlikely to benefit from hybrid fulfillment|
|Large businesses with multiple orders.||Small businesses with small order volumes.|
|Businesses looking to expand and grow quickly.||Businesses with simple-to-ship products.|
|Businesses that sell large, fragile, or difficult to transport items.||Businesses that focus on serving a domestic market.|
Hybrid Fulfillment: Summary
A hybrid fulfillment method can have many benefits for your online business, but deciding if it’s right for you is important.
Some of the main benefits of undertaking a hybrid fulfillment approach include:
- Cost efficiency
- Helps to utilize your storage space (or lack of)
- Timely order delivery
- Lays the foundations of growth
Just because it comes with so many benefits, however, doesn’t necessarily mean that it’s right for you. Sometimes your business may require a simpler and more streamlined fulfillment process.
Whatever you decide, fulfilling your orders is important. Why not check out our guide to fulfillment centers next to help you make the right fulfillment choice for your ecommerce store.
Frequently Asked Questions
Hybrid fulfillment allows you to combine any fulfillment methods that work for your business including in-house fulfillment, dropshipping, 3PL, and print on demand services.
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