To get your fulfillment — the process of storing, picking,
packing, and shipping products — running smoothly, sometimes
it’s best to do it yourself. DIY is at the heart of the
In-house fulfillment means fulfilling orders all on your own.
When they first launch their own online enterprise, e-retailers
usually begin learning the ropes of fulfillment via in-house.
It’s square one, and that square tends to be a
living-room-turned-HQ. It’s literally fulfilling orders in the
The model’s the easiest fulfillment framework to get off the
ground, it’s cost-effective so long as order volume is
manageable, and it offers you total control over getting product
to the customer. And because you’re storing, packing, and
shipping within your living room, you won’t need to make a large
overhead investment on warehouse space or hiring — those may
arrive later, though.
Just be sure to pay your rent!
In-house fulfillment is both clear-cut and simple compared to
other fulfillment models. Here’s the flow.
To get product to sell, you must first request and
purchase it from your supplier(s). Note: when purchasing
inventory, be sure that the send-to address is that of
wherever you’re storing it.
Store the product
Once the product you’ve bought makes its way to your HQ,
unpack it, make sure it’s all accounted for, store it,
and keep it safe, sound, and organized.
Make a sale
After driving traffic to your webstore and working your
marketing magic, a sale is made!
Fulfill the order
Pluck the products in the order from storage, package
the shipment, and send it on its way.
On a spectrum of control, in-house fulfillment offers the most
compared to other fulfillment models. Control is the single
largest benefit of the model, and — although it does have
important disadvantages that we’ll cover soon — it provides some
major pluses when it comes to getting products from A to B.
Because you won’t be working with any third party to store and
ship orders — like a
third-party logistics provider
or dropshipper — you won’t need
to worry about any other service failing to meet your
fulfillment standards. Orders are fulfilled by you or anyone
related to you, whether they’re a friend, family member, or
employee once you get large enough to hire.
Unlike other models, in-house fulfillment also guarantees the
ability to brand all of your
packaging materials, so long as
your budget allows for it. Custom-branded or colored boxes,
packaging supplies, or business cards are all fair game. Throw
in some peppermints. Include a discount code. It’s all up to
And as the ecommerce space gets more and more crowded, those two
— quality control and branding — can significantly differentiate
your business. Whether you’re selling on a hosted cart like
a marketplace like eBay, in-house fulfillment provides the means
to change a customer’s experience from a boring to a memorable
Reacting to Demand
If an ever-rising order volume isn’t enough of a sign, growth
will be pretty obvious once that living room turns into a scene
out of an episode of Hoarders. In-house fulfillment
let’s you quickly react to fluctuations in demand more so than
any other model.
Inventory is at arm’s length — if product is moving quickly,
you’ll know it, and restocking is in your hands with no
intermediary like a third-party warehouse that needs to be
alerted in advance. And if a product is stuck rotting on the
shelves, you have the power to put up a promotion and
restock product with ease once
it kicks in.
All of that control also makes the irritating and ever-present
process of returns management far easier as well. For instance,
if you were dealing with
outsourced fulfillment — a model
that places fulfillment squarely in the hands of a partner that
you pay — an unwanted product would be sent back to them instead
of you since they’re the ones storing and shipping the product.
That can be an issue.
Any third party in your fulfillment process stands between you
and your customer. The children’s game called “Telephone” comes
to mind, where someone whispers a message and eventually it’s
completely different — the more barriers between you and the
customer, the more likely important information is to get lost
in the mix.
The feedback you receive from a return can be important. Was the
product not what the customer expected? Was it damaged? Not only
is it important to satisfy the customer, it’s an opportunity to
fix a mistake on your end that might occur again. With in-house
fulfillment, communication is one-way.
In total, the control provided by in-house means clear
visibility of inventory and a clear line of feedback with
customers. It’s the simplest fulfillment model to start off
using, and it also lets you bring in some branding.
In-house sounds relatively simple, but when order volume rises,
so does the amount of time and money you spend fulfilling
in-house. As you grow and buy up larger amounts of inventory to
meet increasing demand, that living room may become unlivable.
That means it’s time to raise the complexity of your operation
To store a higher amount of inventory that meets your demand,
look into leasing out a storage unit, warehouse, or some sort of
commercial real estate.
It’s a matter of scaling — if you have a modest amount of
product that doesn’t fit in your residence but is too small to
warrant a warehouse, use a storage unit. And if your fulfillment
operation is getting unwieldy, look into a warehouse or office
space with enough space to store and ship your orders.
To easily find a storage unit:
To locate a warehouse or warehouse space for rent:
Every minute it takes to fulfill orders is a minute that could
be spent on other business matters. At a certain order volume, a
merchant may find themselves spending the majority of their day
picking, packing, and shipping. If budget allows, it may be time
to hire some part or full-time employees that do the job for
At the end of the day, in-house can certainly scale, but the
majority of its downsides revolve around growth. It might be an
easy-to-start fulfillment model, but higher order volumes mean a
higher workload and higher expenses, whether they’re security
deposits, rent, hourly wages, or more cash tied up in inventory.
To be sure, running your business’ own fulfillment operation,
regardless of scale, offers more control than other models. But
that c-word is a burden as well. It can’t be said enough —
in-house fulfillment means full responsibility for storing and
shipping, and that means you’ll be dumping a considerable amount
of money and time into the daily grind of cranking out orders
that could be better spent on other business functions.