Starting an Online Business All-in-One For Dummies®, 3rd Edition

Developing an In-House Fulfillment Model

Many small businesses take care of their own fulfillment, which means that they pack and ship their own products and send them out the door. Doing so allows these businesses to control the quality of their shipments so that they know their customers are being served. Typically, doing so makes sense: Because the inventory is on-site, orders can be packed at the source and sent out rather than relayed to some far-flung warehouse.

Setting up an in-house fulfillment model requires first having enough inventory on hand and available at your location. After you know how much inventory you need to have in stock, you can plan for the space required to hold this inventory. After you're in business a while, you know from your average order level how much inventory to have. In the beginning, you need to estimate orders and decide how many different products to carry in your store. Be sure to have enough on hand to fill initial orders.

Don't let a lack of available space be the reason that you don't carry more inventory. Different models, both in-house and outsourced, allow you to hold more products than your current available space allows.

Your relationships with your vendors help determine the amount of space that's required. If you receive shipments in batches, make sure that you have enough space available to take in a shipment and hold it until ...