Let’s face it — there is no one-size-fits-all solution when it comes to fulfillment.
Depending on whether a business sells across multiple channels, offers a subscription box service, or ships to customers across the world — order fulfillment requires deliberate supply chain planning and execution to meet ever-changing market demands.
To establish an agile supply chain, one of the biggest trends we’re seeing in fulfillment is the idea of going “hybrid” in order to meet customer expectations, stay competitive, optimize costs, and reduce risk.
Let’s take a closer look at what hybrid fulfillment is, how businesses can benefit from it, and whether it’s a good option for you.
What is hybrid fulfillment?
Hybrid fulfillment refers to a flexible and diverse approach to filling orders, which may use a combination of different fulfillment models, including in-house fulfillment, dropshipping, and/or third-party logistics.
This type of fulfillment model offers ecommerce businesses in both direct-to-consumer and B2B ecommerce more freedom in how they manage their supply chain and order types.
Just like businesses around the world have evolved into hybrid workplaces for partially remote and in-person environments, hybrid fulfillment has evolved to meet the hybrid consumer where they are, giving brands greater flexibility and more options to get orders to those customers.
What types of fulfillment are there?
Today, ecommerce businesses have more options on how to manage fulfillment than ever before. Here is an overview of the three most common fulfillment types.
In-house fulfillment is when a business handles the entire fulfillment processes on its own, from warehousing and inventory management to picking, packing, and shipping.
Businesses that choose to fulfill orders in house hire staff and purchase equipment and space needed to fulfill orders efficiently (whether it’s in their own home or leasing a warehouse).
In-house fulfillment is a great option for businesses that want complete control over their logistics operations and have the means to manage it all themselves without compromising the customer experience.
With dropshipping, a business’s supplier or manufacturer sends orders directly to the end customer.
This fulfillment method gives merchants to freedom to focus their time and energy on other parts of their business without needing to worry about inventory management or shipping orders themselves.
Though competitive and lacking some quality control and oversight, t’s a pretty hands-free approach that works well for businesses that are just starting out or don’t have the resources to handle inventory on their own.
Third-party fulfillment relies on a third-party logistics provider (3PL) to take charge of fulfillment.
A business’s 3PL partner handles every aspect of the retail fulfillment process: warehouse receiving, inventory management, storage, picking and packing, and shipping.
Outsourcing fulfillment to a third-party enables fast-growing brands in both the direct-to-consumer and B2B space to fully delegate the fulfillment process to experts.
“We never wanted to be a logistics company, so we found a really good partner in ShipBob to offer the fulfillment services, technology, and other tools needed to stay competitive.”
Matt Dryfhout, Founder & CEO of BAKblade
Hybrid order fulfillment
Hybrid order fulfillment involves using all or some of the above fulfillment approaches rather than solely relying on one.
This approach offers more flexibility to ecommerce businesses and enables a more resilient supply chain to meet ever-changing market demands while also enabling growth.
For example, a global ecommerce business might stick with in-house fulfillment for local shipments, rely on a 3PL to take care of international shipping, and work with a dropshipper for specific items in their product catalog.
Hybrid fulfillment is a great option for businesses that are growing fast, offer a diverse range of products, serve a multitude of markets with different expectations, and require a custom fulfillment solution to meet the needs of the business and its customers (e.g., outsourcing fulfillment of fast-moving products and fulfilling rarely orders SKUs themselves, only fulfilling regional orders themselves, etc.).
Benefits of a hybrid fulfillment model
The hybrid fulfillment model has become a popular approach for growing ecommerce businesses due to the flexibility and customization it offers. Since there are different fulfillment strategies to choose from, you can easily change directions and have something to fall back on.
Choosing to go “hybrid” with your fulfillment strategy offers freedom to test out new products, processes, and channels without too much risk.
With the ability to choose between multiple fulfillment options, a hybrid approach also has the potential to be more cost-effective if established well; you will need to be strategic about which products get shipped using each method.
For example, if you’re planning to introduce a new line of products, dropshipping may be more cost-effective since you won’t have to stock large amounts of inventory and rack up carrying costs.
Or if you’re selling large and heavy items but lacking the facilities and resources to fulfill them, outsourcing to a 3PL will help you save on storage, labor, and equipment costs.
Is a hybrid fulfillment approach right for me?
Hybrid fulfillment is always an option for ecommerce businesses. But there are a lot of moving parts involved since you have to manage or at least oversee multiple fulfillment operations.
Managing your inventory across different locations and ensuring orders are fulfilled on time through all these different approaches can be challenging and time-consuming.
However, supply chain technology makes it easier to manage it all by centralizing important, real-time data.
With the right strategy, resources, and technology, a hybrid fulfillment model can give your business the flexibility you need to grow.
This option is ideal for you if:
- You have a lease for a warehouse but want better coverage on the other side of the country (or in other countries).
- You only want to fulfill certain products yourself.
- You’re constantly testing new products, concepts, processes, and channels.
- You’re experimenting with online sales for your physical store and want to offer both pickup and delivery options.
- You have the resources to efficiently manage all of the different fulfillment methods involved in your strategy.
- You don’t have the facilities or don’t want to store and manage large amounts of ecommerce inventory.
- You need a different fulfillment options to serve product customization needs and meet consumer expectations.
How ShipBob enables growth through fulfillment
Whether you’re choosing to go hybrid or looking to outsource fulfillment to the experts, having a reliable ecommerce fulfillment partner is crucial.
ShipBob is a premium fulfillment solution that:
- Offers a warehouse management system (WMS) you can use to fulfill your own orders and even utilize ShipBob’s fulfillment network if you want (e.g., in other countries) for a hybrid fulfillment approach.
- Handles every aspect of your fulfillment process – from storing and managing your inventory to getting them delivered to your customers’ doorsteps. We can take some of your products to fulfill (or all).
ShipBob’s best-in-class technology integrates with your store(s), so whichever orders you want us to fulfill are automatically sent to our warehouse(s), where they’re immediately picked, packed, and shipped out.
Have your own warehouse and want a hybrid fulfillment solution?
With ShipBob, you also have the option to utilize our warehouse management technology to strengthen your in-house fulfillment operations.
For example, DTC snack brand Muddy Bites wasn’t ready to outsource fulfillment but needed access to a robust WMS to support their in-house fulfillment operations, so they took advantage of ShipBob’s Merchant Plus solution.
With ShipBob, Muddy Bites was able to meet an immediate need, while also preparing the business to expand globally with ShipBob in the future.
“Having a good partner in ShipBob means if we want someday, we could even use ShipBob’s blended fulfillment approach, having them fulfill orders overseas for us — for example, in their European fulfillment centers — to take a leg off the journey in global expansion.”
Jarod Steffes, CEO of Muddy Bites
ShipBob’s distributed, international fulfillment network allows you strategically store your inventory closer to your customers.
Through the ShipBob dashboard, you’re given insights into how to create an ideal distribution based on where your customers are located. With this information, you can establish a strategic and optimized distribution strategy to reduce shipping costs while speeding up last-mile delivery.
“We just got started in ShipBob’s EU fulfillment center, and will next expand into their UK facility to continue building momentum. When I was shipping orders myself, what I paid per order is the same price now to pick, pack, and ship orders through ShipBob.
It’s even much cheaper to ship to certain countries, which used to take ages and often got lost with localized post here. Now, I have very transparent pricing, and I can easily run and plan my business.”
Leonie Lynch, Founder & CEO of Juspy
No matter where your business is in terms of growth and expansion, ShipBob can meet you where you are and help you get to where you want to go.
Whether you’re looking for a technology to support your in-house operations or need access to a global fulfillment network, ShipBob offers the resources, expertise, and world-class service you need to grow your ecommerce business.
For more information about our technology, expertise, and fulfillment network, contact the ShipBob team today.
Hybrid fulfillment FAQs
Here are answers to the top questions about hybrid fulfillment.
What is hybrid order fulfillment in ecommerce?
Hybrid fulfillment refers to a flexible and diverse approach to filling orders, which uses a combination of different fulfillment models, including in-house fulfillment, dropshipping, and/or third-party logistics.
Is hybrid fulfillment good for ecommerce businesses?
With the flexibility it offers, hybrid fulfillment is a great option for ecommerce businesses that want to continue to scale and experiment with different approaches before making a commitment (or while in transition with a warehouse lease). For example, you could start by implementing a 3PL’s technology to strengthen your in-house fulfillment operations before fully outsourcing fulfillment operations.
Does hybrid fulfillment require a 3PL company?
Sometimes, but not always. A hybrid fulfillment strategy could consists of 2 or more of the following: in-house fulfillment, dropshipping, and third-party fulfillment. However, many 3PLs like ShipBob offer technology and geographic locations you can use without making a commitment to 100% fulfillment with a 3PL.
Can ShipBob handle hybrid fulfillment?
Yes. Whether you’re looking for a powerful logistics technology such as a WMS to support your in-house operations, or need access to a global fulfillment network, ShipBob offers the resources, expertise, and world-class service you need to grow your ecommerce business. For example, you can fulfill certain products yourself (or orders in nearby regions yourself), and have ShipBob fulfill your fastest-moving SKUs and/or fulfill your orders in the EU, Australia, etc.