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The global e-commerce fulfillment services market size was valued at USD 86,449.97 million in 2021 and is expected to grow at a compound annual growth rate (CAGR) of 9.5% from 2022 to 2030. The proliferation of electronic commerce and the resulting rise in the number of online buyers, especially in emerging economies is anticipated to fuel market growth. Fulfillment service centers enable online merchants to outsource services including bundling, warehousing, shipping, and other value-added services, such as return management and urgent parcel service. A fulfillment center is ideal for merchants that do not have robust warehousing capabilities to manage inventory directly and do not want to invest additional efforts in shipping.

As an operations and business model, ship-from-store makes no sense at all. It just adds extra layers of handling and that adds up to costs. The only sense it makes is to use it to balance out-of-balance inventories that are in stores. Efficiency comes from consolidating inventory, automated picking and bulk shipping. Ship-from-store is contrary to all these steps.

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Service portfolio extension remains the premier strategy adopted by the fulfillment service providers. For instance, in February 2019, United Parcel Service of America, Inc. launched a new e-fulfillment platform. This new platform connects the company’s fulfillment service centers to small- and medium-sized businesses on 21 online marketplaces, including Amazon.com, Inc. and Etsy, Inc.

Shipping costs can be a concern for ecommerce businesses, and they can also affect your conversion rates. Third-party fulfillment companies often charge by the weight, volume, or dimensions of your product. Some services also offer prepaid return labels.

So in the right situations, it’s smart to have the local stores picking and packing, yet there may be a tipping point where it makes sense to have the centralized distribution. I refer to these retailers as “savvy” for a reason. They are smart enough to figure out what their best option is.

b. The global e-commerce fulfillment services market size was estimated at USD 86,449.97 million in 2021 and is expected to reach USD 96,257.94 million in 2022.

Thus, fulfillment centers remain a preferred choice for e-commerce companies that require efficient partners for their fulfillment operations. The ongoing COVID-19 pandemic has taken a severe toll on businesses across every sector, curbing profits and drying up cash flows and financial reserves. Electronic commerce companies and fulfillment centers are no exception to this as the industry suffered a minor setback during the pandemic initially due to supply chain disruptions and labor shortages. Thereafter, with consumers shunning in-store purchases and preferring to shop online, the surge in online orders did put an unprecedented strain on the logistics and transportation services of online merchants and distributors.