eFulfillment Service, Inc.

Ecommerce Warehousing & Distribution in the U.S.


Ecommerce Warehousing & Distribution in the U.S.

published on 30.11.2017 in Blog by

U.S. Order Fulfillment WarehousingAt eFulfillment Service (EFS), we provide warehousing and order distribution to hundreds of ecommerce merchants around the world that are looking to grow here in the United States.

We regularly receive a variety of questions regarding our fulfillment services, ranging from the types of distribution companies here in the U.S., to the the things that make our company unique.

As such, I wanted to write a post that covers a few topics related to U.S. warehousing and order distribution, including the type of company that may be best suited for your needs, and what types of questions to ask a potential fulfillment partner here in the USA.

Sections of Article:

Types of Fulfillment Warehouses in the USA
Drop Ship Warehouses
Outsourced Fulfillment Warehouses
Right Fulfillment Option for You
Questions to Ask Fulfillment Providers

Types of Fulfillment Warehouses in the USA

Let’s start with a quick definition, just to make sure we’re on the same page with this term:

An order fulfillment warehouse, also referred to as a distribution center, is defined as a place in which various types of merchandise are stored and shipped from in order to reach a specific type of customer.

By itself, the term, “fulfillment warehouse,” doesn’t necessarily describe the type of distribution center, as some warehouses focus on specific types of merchandise, orders, and customers. For the purpose of this article, I’m going to focus on two common types of ecommerce distribution centers….

1. Drop Ship Warehouses

2. Outsourced Fulfillment Warehouses

Drop Ship Warehouses

Drop shipping is defined as order fulfillment via a manufacturer or wholesaler, meaning the retailer does not carry the stock.

For example, let’s say you sell two types of widgets. For the first widget, you source it from supplier A, and for the other, you source it from supplier B. With drop shipping, when a merchant receives an ecommerce order for widget #1, it will be shipped directly to their end customer by supplier A. If someone orders widget #2, then supplier B will do the shipping. If someone orders both, they’ll receive two separate packages, one from supplier A, one from B.

Benefits of Drop Shipping

Less Capital Required

With drop shipping, manufacturers typically will send orders to the merchant’s customers as the merchant receives those orders. This means that the merchant does not have to purchase a large amount of inventory. Instead, they’re essentially only purchasing inventory when they’ve made a sale, allowing a merchant to start listing products and making sales with a much smaller capital investment up front.

Product Selection

When ecommerce sellers utilize drop shippers here in the U.S., they often have access to a wide assortment of products that are offered by one or more manufacturers. Because these merchants don’t have to purchase the stock in bulk and, instead, the products are shipped by the manufacturer as the merchant receives orders for those products, they can more easily test new products at a lower cost.

Drawbacks of Drop Shipping

Less Profit

Any time you purchase goods in bulk, the price per unit is typically less. It’s no different with drop shipping via manufacturers. Because merchants are essentially only purchasing one unit as a time as they make a sale for that unit, the unit price is typically higher than it would be if they ordered several units at one time, leading to smaller margins for the merchant.

Higher Shipping Costs

Drop shipping can also lead to higher order fulfilment and shipping costs for ecommerce sellers. There are a couple of reason for this. First, if you’re using a U.S. manufacturer that isn’t set up well for ecommerce order fulfillment shipping, their internal costs may be higher than a traditional 3PL (third-party logistics provider), and those higher costs will be passed on to the ecommerce seller.

Additionally, if you’re using multiple drop shippers, then you’ll likely receive orders with items that need to be filled from multiple suppliers, which adds to your shipping costs, as shipping two boxes is more expensive than shipping one box from one location.

Slower Turnaround & Delivery Times

In many cases, the time it takes to get an order out the door and have it reach the end customer is longer with drop shipping compared with a 3PL. As with the potentially higher costs, one reason for this is that some drop shippers aren’t set up as well as a 3PL when it comes to their technology and internal efficiencies relative to small parcel distribution. Another big reason for the slower turnaround time is that drop ship suppliers will generally produce the units once they receive the order, which is slower than simply picking an item off the shelf and shipping it.

More Competition

As an online seller, when you find a supplier that’s willing to drop ship, that generally means that the same product that’s being drop shipped for you is also being drop shipped for other online sellers. So, as compared to a product that’s custom-manufactured to your specifications, those that are drop shipped often come with an increased amount of competition within the ecommerce landscape.

Outsourced Fulfillment Warehouses

Outsourced order fulfillment is defined as order fulfillment via a third party, one that requires the merchandise to carry stock. This is also commonly referred to as using a 3PL, or third-party logistics provider.

Drop shipping is essentially a form of order fulfillment. The difference, though, is that, with drop shipping, the retailer has their manufacturer ship the orders. With outsourced fulfillment via a 3PL, the retailer is using a third party that specializes in order fulfillment (and typically does not manufacture any products).

At eFulfillment Service, we are an outsourced order fulfillment company, meaning we do not produce or manufacture any goods. Instead, our clients, which are ecommerce sellers, will have their goods produced from a supplier here in the U.S. or overseas, they’ll send us those goods in bulk, and we will warehouse those goods until they’re sold, at which time we’ll pick, pack and ship them to our clients’ end customers.

Benefits of Outsourced Order Fulfillment

Higher Profits

Our clients will generally purchase their merchandise in bulk from their suppliers and then ship it to our U.S. fulfillment warehouse. By doing so, they do have to account for the shipping cost to our facility, although that added cost is typically quite a bit less than the savings they get by purchasing in bulk, ultimately leading to higher profits.

Lower Shipping Costs

By filling an entire order out of one warehouse (as opposed to splitting that order among multiple drop shippers), merchants save money on shipping. And again, while the inbound shipping to the fulfillment center needs to be accounted for, when shipping in bulk, the per unit cost is significantly less than a small parcel shipment, meaning the merchant still comes out ahead by not having to split outbound orders.

Faster Turnaround & Delivery Times

When using an outsourced fulfillment company here in the U.S., because your products are sitting on the warehouse shelves ready to be picked and packed, you’re generally able to reach your customers faster.

Easier to Manage

Drop shippers offer a number of advantages. However, as mentioned, as an online seller, you may have to deal with multiple drop shippers, which can not only lead to higher shipping costs, it can also make it more difficult to manage on your end.

Drawbacks of Outsourced Order Fulfillment

Product Selection & Testing

When you use an outsourced 3PL, it doesn’t mean that you can’t sell a wide variety of products, it’s simply that it may not be as easy to test your marketing strategy and customer demand for those products. A fairly common tactic is to use a drop shipper to test new products; then, if those products show promise, the merchant will purchase them in bulk and then use a third-party fulfillment center to reduce their costs.

More Capital Up Front

With more inventory comes the need for a larger initial capital investment. This can be difficult when sellers are just starting out, and inventory often represents the bulk of startup costs for an ecommerce seller. When using a 3PL vs. a drop shipper, this up-front inventory cost can be higher, although, as discussed, it can ultimately be more cost-effective.

Here is a table showing typical pros and cons of order fulfillment vs. drop shipping….

Order Fulfillment ProsOrder Fulfillment ConsDrop Shipping ProsDrop Shipping Cons
Lower per unit inventory costMore capital required up frontLess capital required up frontHigher per unit inventory cost
Lower order fulfillment & shipping costMore costly to test new productsTest new products more easilyHigher order fulfillment & shipping cost
Faster turnaround times with ordersSlower turnaround times with orders
Fewer vendors to manageHigh competition with drop shipped products

Which Type of Order Fulfillment Approach is Right for You?

If you’re trying to determine the right U.S. order fulfillment option for you and are comparing drop shippers and 3PLs, solidifying the right distribution method(s) will ultimately require some analysis based on your particular situation.

For example, if you’ll be selling a product that’s custom-manufactured to your specs, one that can be produced in bulk (as opposed to having to be produced on-demand), then your manufacturing options may be more limited and you may not have a choice but to use an outsourced 3PL, or handle the order fulfillment yourself.

If you’re custom-manufacturing goods per order, then the opposite may be true, which is that you aren’t able to bulk produce those goods and need to drop ship per order (or again, handle the order fulfillment in house).

If you’re a startup company and are looking to test generic products, then drop shipping may be the way to go to afford you a larger product assortment, at least initially, even if that means less margin.

If you’re based outside the USA and have an established ecommerce business overseas, meaning you already manufacture goods in bulk, then using an outsourced order fulfillment center here in the U.S. may be the most appropriate, cost-effective option.

It’s not uncommon for ecommerce sellers to utilize a hybrid approach, meaning that some of their merchandise is drop shipped from suppliers, and some is warehoused and shipped using a 3PL. In other cases, a merchant may handle order fulfillment in-house for some types of products, perhaps those that require customization and/or greater quality control, and others are handled by an outsourced provider.

Questions to Ask U.S. Order Fulfillment Companies?

Drop shippers and order fulfillment companies all seem to charge a bit differently. Some lump multiple services into one fee, while others break everything out. Some will charge more fees than others, while some have rates that change based on how much or little you’re shipping.

Also, aside from price, you’ll find companies with varying degrees of experience, financial stability, service offerings, technology, etc. So, to help you get a solid understanding of their strengths, weaknesses, and whether or not they’re a good fit for your ecommerce business, here’s a list of 20 questions to ask prospective order fulfillment companies here in the U.S…

1. How many years have you been in business?

2. What percentage of your orders are direct-to-consumer (D2C) vs. B2B?

3. Where are your warehouses located?

4. How large are your warehouses and how close are you to capacity?

5. How many clients do you currently work with?

6. How many orders do you ship per day?

7. Are there specific types of products that you specialize in working with?

8. What is your fulfillment pricing structure?

9. Does pricing change as my business grows?

10. Do you have minimum order requirements?

11. Do you have any setup fees?

12. Do you have a minimum monthly retainer?

13. Do you ship outside of the United States?

14. Do you control all parts of your business, or do you outsource the warehousing/fulfillment, customer support, IT, or anything else?

15. What shopping carts / marketplaces do you integrate with?

16. What are your service-level agreements regarding turnaround time for inbound and outbound shipments?

17. Can you provide me with your Dun & Bradstreet ratings?

18. Do you have a long-term contract?

19. What do you consider to be your strengths and what sets you apart?

20. What do you consider to be your weaknesses?

There are likely more questions you’ll want to ask a prospective drop shipper or 3PL as they relate to your particular business, although these will help you to gain a better understanding of the company’s overall level of experience, pricing structure, and if they may be a fit for your business now and into the future.

Ecommerce Warehousing & Distribution in the U.S.
Article Name
Ecommerce Warehousing & Distribution in the U.S.
In this article, I cover two common order fulfillment options here in the U.S., which include drop shipping and outsourced fulfillment via a 3PL.
eFulfillment Service

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34 Responses to “Ecommerce Warehousing & Distribution in the U.S.”
  1. Penelope says:

    Good morning.
    We are an online retail shop based in the Philippines. Would you be able to help with information on whether we can sell the items we carry in shop to customers in the US, using your fulfilment center? Or will we need to be a US-based company to be able to do that?

    Thank you so much.

    • Steve Bulger says:

      Hi Penelope –

      Thank you for reaching out here. And is a great question!

      We work with many internationally-based sellers and, typically, it is not a requirement that those sellers establish a U.S. company in order to use our fulfillment center. If you’re using a U.S. order fulfillment company to handle only orders from U.S. customers, then you will generally only need an importer ID, which is something that a customs broker can help you with.

      If you’d like, please feel free to fill out our contact form and one of our friendly team members here can reach out with additional information on our fulfillment services, including how to go about generating an importer ID for your business.

      Thank you!
      Steve Bulger

  2. Melvin says:

    Hi Steve,
    Love the articles published here.
    I’m looking for a warehouse in the US to hold stock and do fulfillment of orders sold.
    I would like to understand your charges. Could you kindly provide all the relevant information for me. Thank you

    • Steve Bulger says:

      Hi Melvin,

      Thank you for reaching out regarding our ecommerce order fulfillment services. We’d love to chat and learn more about your business and provide you with more info on our services. Someone from our sales team will reach out to you shortly!

      Thank you,
      Steve Bulger

  3. Nitin Tyagi says:

    We are looking for warehouse services for Walmart.
    Please revert if you provide any such facility.
    Thank You.
    Nitin Tyagi

    • Steve Bulger says:

      Hi Nitin –

      Thank you for reaching out regarding our warehousing and order fulfillment services for Walmart sellers. We are able to not only handle your Walmart orders, but also orders from any other online channels you’re selling from, and we offer a great deal of flexibility, meaning there are no minimum order volume requirements, no long-term commitments, and no long-term storage fees.

      Our sales team will be in touch with you soon to provide more information. We’re looking forward to talking!

      Thank you!

  4. Felipe says:

    Hello, I live abroad and was looking for inventory storage services in US. So, the service would be for personal usage. How your service works? Can I buy anything from any ecommerce website and sent It to your storage, even a small amount, like music instruments, any sort of gifts etc? If yes, how much would the storage cost for me per month? Thanks

    • Steve Bulger says:

      Hi Felipe –

      Thank you for inquiring about our inventory storage and ecommerce fulfillment services here in the U.S.

      To answer your question, yes, you would be able to send us a range of merchandise to sell on your ecommerce website. We work with tens of thousands of different products and do not have any sort of minimum storage requirements, nor any minimum order requirements.

      We do have a couple of limits relative to the type of products we’ll warehouse. For instance, we don’t typically work with products of extremely high value, or with products that are extremely large, such as furniture.

      Other than that, we can likely accommodate your storage and order fulfillment needs, and we work with many internationally-based sellers so we’d love to chat further! If you’d like, please contact us at sales@efulfillmentservice.com or fill out the quote request form on our website. We can then send more info and hear more about your plans.


  5. hi,

    we have indian based company/manufacture. we want to sell our products in usa through ecommerce- ebay, amazon. can u help us how do we start up and rent a warehouse space and stock our products in usa. what legal documentation is required and its procedure to fulfill.

    also we want to know which are the free sea port in usa, so we can bring our goods.

    • Steve Bulger says:

      Hi Aafreen,

      Thank you for your inquiry regarding our U.S.-based ecommerce fulfillment services. We work with online sellers all over the world to help them grow their businesses here in the United States, and we make it easy with simple, straightforward terms and pricing.

      I will have someone from our sales team get in touch with you shortly to provide more information on our warehousing and distribution services. I’m hoping we find we’re a great fit!

      Steve Bulger

  6. Steve Kong says:

    Hi there, I sell on Amazon.com.

    I would like estimated costs of using your 3PL services to send my USA customers a ‘bonus’ free product as and when I request this to happen.

    My product is a small copper wire light powered by batteries. I will not be supplying the batteries just the lights. My supplier is in China.
    A similar product can be seen here https://www.amazon.com/Ariceleo-Operated-Christmas-Centerpiece-Decoration/dp/B07S3R6MKJ/ref=sr_1_39?crid=2FW14JDNT5600&keywords=copper+wire+lights&qid=1566813146&s=gateway&sprefix=copper+wire+light%2Caps%2C436&sr=8-39

    1) What are the estimated costs for storage and distribution of these products on my behalf? I will only want to store around 500 units to begin with.



    • Steve Bulger says:

      Hi Steve –

      Thank you for reaching out regarding our U.S. ecommerce order fulfillment services for your copper wire light.

      I see that you filled out a quote request form on our website, so one of our sales folks will be in touch soon. We’re looking forward to the opportunity to work together.

      Steve Bulger

  7. Shakil Ahmad says:


    We are looking for a fulfillment service provider in USA to storage our products.Basically,we sell our products on Amazon. That’s why we would like work with you to storage our products in your warehouse for 4 to 6 months & we need 2000 cubic feet space.
    So please,let us know what are the procedures to work with you.

    Shakil Ahmad
    Account manager

  8. Andy Marin says:

    Do you still provide the services?

  9. Ali Cenk Kirmizitepe says:

    Hi there
    My name is Norma Susanti n i live in Turkey.
    I have a couple of question. I lost my job after corana virus and I need money to take care of my family. İ watched some video about online artbitrage on Amazon. İ decide to do this. İt s said that i need a warehouse to send my products to Amazon warehouse ,FBA.I would like to do online artbitrage by Amazon.com in U.S. i mean i will buy some products from IKEA or Walmart as a online then send your warehouse and then u Will tag and pack my products and finally Will send my products to Amazon warehouse. I would like to work with this company to be able to do this . My last question is that i need a company to do this job in U.S. or i need only importer ID ? How can i get importer ID ? Thanks for your help. Have a good working day.

    • Steve Bulger says:

      Hi Ali –

      Thank you for reaching out. I’m sorry to hear about losing your job, although I think it is great that you are trying something new and planning to launch an ecommerce business.

      We work with hundreds of online sellers like you that are based in other countries and we make it very easy for you without any minimum order requirements, nor any complicated fees.

      We have your email address and you will hear from our friendly sales team soon. We’re looking forward to the opportunity to work together!

      Steve Bulger

  10. Good morning, Great article thank you!

    I am UK based and have a product that I wish to sell in the USA and I am looking for warehousing and distribution solutions. It sounds as though you may be able to help me with this. I would greatly appreciate it if someone could contact me.

    Warmest wishes, Jenny

    • Steve Bulger says:

      Hi Jenny –

      Thank you for reaching out regarding our U.S. order fulfillment services. We work with many UK-based merchants like yourself and we’re looking forward to learning more about your business.

      We will be in touch shortly to provide more information on our warehousing and efulfillment services. Looking forward to the opportunity to work together!


  11. Duy Nguyen says:

    Hi, thanks a lot for great and informative article!!
    I have small business in Vietnam and I would like to launch it on Amazon. After reading your article, i find the way to proceed my desire but i have some questions want to ask you:
    1. What type of documents do i need to be able to send over my product to your warehouse?
    2. The same question 1 but If i find good sources in US and want to stock up in your warehouse??
    Thank you for your help.

    • Steve Bulger says:

      Hi Duy –

      Thanks for your inquiry regarding our ecommerce fulfillment services. We work with online sellers all over the world to help them grow their businesses here in the U.S.

      Regarding the documents required to send goods to our warehouse, we typically recommend working with a customs broker and we can recommend one for you, if you’d like. We can also provide more information on our warehousing and distribution services.

      Looking forward to talking more and the opportunity to work together.


      • Orahn Hardwick says:

        I sent a couple of questions back on the 24th of May but yet to have them answered:
        Last year (circa Feb-Mar), as a new ecommerce seller, I bought from an overseas (China) manufacturer 100 Memory Foam Travel Pillows for approx. $525 + $400 in shipping costs which I had them sent to my home address. Since then I have yet to have (1) buyer purchase (1) of them! Being that the cost to make ea. pillow was so cheap, was a ‘hot’ item at the time, I figured I chose a correct product to sell. Over a year later, they’re still in the boxes they came in sitting in my garage! Please provide some suggestions on how/what I can do to SELL these travel pillows and if I should continue to us overseas manufacturers v.s. US – being that the cost to make items is a lot CHEAPER to make/per unit then they would be here OR should I only utilize U.S. manufacturers and NOT have to worry about the larger shipping costs!

  12. Orahn Y Hardwick says:

    Last year (circa Feb-Mar), as a new ecommerce seller, I bought from an overseas (China) manufacturer 100 Memory Foam Travel Pillows for approx. $525 + $400 in shipping costs which I had them sent to my home address. Since then I have yet to have (1) buyer purchase (1) of them! Being that the cost to make ea. pillow was so cheap, was a ‘hot’ item at the time, I figured I chose a correct product to sell. Over a year later, they’re still in the boxes they came in sitting in my garage! Please provide some suggestions on how/what I can do to SELL these travel pillows and if I should continue to us overseas manufacturers v.s. US – being that the cost to make items is a lot CHEAPER to make/per unit then they would be here OR should I only utilize U.S. manufacturers and NOT have to worry about the larger shipping costs!

  13. Mai Ngoc Yen says:

    Good evening!
    Your article is great .
    I would like to sell handmade products around the world . I do not know how to start. I need to rent a small warehouse place to keep my products and then you can deliver to my customers when they order. I pack the product and you need only to deliver.Can you tell me more your service and send me email .
    Thank you so much and I am looking forward your reply.

  14. Toritse Bafor says:

    Good day,
    We are a company urgently looking for cost-effective warehousing and fulfillment services in USA to store our products. We would like information on your costs/pricing structure?
    Can you help please?

  15. Emad says:

    Greetings sir Steve Bulger

    I have a product I want to sell on Amazon, but at the moment, Amazon FBA sellers have stock limits, can I store goods and ship them to Amazon?

    Best regards.

  16. Caril Rebote says:


    I would like to inquire about your storage service. We have an excess of 600 units of pet food containers that we can’t ship to Amazon because of the new shipment inbound limitation. May we know how we can go about the process of availing your storage service?

    Looking forward to your reply.

    Best regards,

    • Steve Bulger says:

      HI Caril –

      Thank you for your comment and inquiry regarding our storage service. We have a tremendous amount of experience warehousing and shipping a range of pet products, and we also have a division of our fulfillment company dedicated to prepping inventory and shipping it directly to Amazon to replenish your stock there.

      We will be in touch soon with more information on our FBA prep services. We are looking forward to the possibility of working with you.

      Thank you!

  17. May He says:

    Dear Sir,
    Glad to known you are engaged in warehouse storage services.
    We are engaged in warehouse automation equipments of information vision recognization and inputting into computer and storage management systems.There are dimensioning weighing scanning singulating conveying and sorting functions to be flexiblely integrated.
    Please contact if you are interested.
    We can send you videos to show you more detail upon your requests.

    May with Best Regards,
    Cell/wechat/whatsapp: +86 180 1627 5415
    skype: may@senad.cn

  18. ARS says:

    I am looking to size up the eCom logistics industry. Do you have any ballpark of how many 3PLs and Courier companies are there in the US?

    • Rachel North says:

      Ashwin, can you tell us more about why you’re asking and what you’re going to do with the size of the ecommerce industry? Is this a white paper or article where you’d quote one of eFulfillment Service expert executives on the internet retailing distribution industry? We have been fulfilling online orders for 20 years, and our company was purpose built to handle direct-to-consumer orders for our more than 700 clients. The process requires integrated technology with 40+ marketplaces and shopping carts, as well as integrating with carriers like DHL, FedEx, U.S. Postal Service and more. Plus, a skilled fulfillment center like us preps orders for Amazon’s fulfillment service, Fulfillment By Amazon (FBA)—that service is known as FBA Prep. We’d be happy to help you understand more about the fulfillment industry for ecommerce. May I suggest that you email us at social@eFulfillmentService.com. Let us know where your content will be posted, what your deadline is, and if you need additional materials like photos of our fulfillment experts.

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