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.

• Dramatic Volume Increase. Fulfillment, bureau-managed e-mail lists experienced a sharp increase in 2008 to an astonishing 404 million records
• Staffing Levels Holding. Despite noticeable business growth, staffing levels remained on par indicating a push for more third-party outsourcing of assembly services
• Customers Remain the Focus. Integrated databases and enhanced customer record management (CRM) strategies ensure customer-centric business practices.

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.

Sources

Audience Development

Interaction Media Group

Worldwide Brands