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Contract Assembly Service Primer: When and How to Buy
One of the key decisions to be made in expanding any product-oriented business involves the strategic direction of order fulfillment. When fulfillment processes become too time-consuming or cost-prohibitive to be handled in-house, companies should weigh the option of entrusting them to a contract assembly service.
Contract Assembly by the Numbers
Home to a variety of profitable ventures, the state of Florida provides a satisfactory cross-section of assembly service trends that businesses can use to gauge the effectiveness of third-party outsourcing. The 2009 Fulfillment Service Bureau Survey reveals several eye-opening statistics with respect to customer-centric operations.
Defining the Assembly Service
Contract assembly is basically an extension of the business itself. Third-party vendors accept orders on behalf of the company and fulfill those orders to exact specifications. The inherent value of these services is obvious. The business can reduce labor hours and costs of storing merchandise, refocusing these resources on brand-building activities. E-commerce and Internet-based businesses, routinely piloted by single persons or small staffs, have found contract assembly services to be invaluable.
William King, director of UK Wholesalers andamp; Drop Shipping Suppliers Directory, Wholesale Drop Shipping Trade Supplies, and Canada Wholesalers andamp; Drop Shippers Directory, labels the assembly service as an indispensable resource for businesses on the move. According to King, successful online ventures can benefit from assembly services in several unique ways. Instead of worrying about consistent delivery, companies can concentrate on product development and identification of profitable niche identification.
Evaluating Contract Assembly Services
When the time arrives for the business to consider adding an assembly service to its operations, careful consideration of the partnership is paramount. Chris Malta and Robin Cowie of WorldwideBrands.com offer experienced insight into evaluating a third-party fulfillment vendor. Because the reputation of the brand often hangs in the balance, its critical to confirm the expectations of all parties involved. Failure to do so often results in lost time and profits--the precursors to stagnation.
As with most operations, communication is the key. Best-practices dictate that processes must be in place for such activities as product returns, customer follow-up, and cross-selling and up-selling opportunities. Because drop shipping is a volume business, companies should be doing a robust amount of business to see an acceptable return on investment as determined by monthly sales figures and projected receipts.