D2C fulfillment: Choosing the right partner and setup

When launching or scaling direct-to-consumer sales, one of the most important decisions a brand makes is how to fulfill orders. D2C fulfillment choices affect delivery speed, cost, returns handling, and the customer experience. This guide explains how to evaluate fulfillment options—from doing it in-house to partnering with 3PLs—and outlines practical criteria and steps to make the right choice.

Begin with a clear picture of your needs. Ask questions like:

• How many orders do we expect per day, peak, and off-peak?
• Where are our customers located geographically?
• How important is branded packaging and kitting to our customer experience?
• Do we plan to sell on marketplaces with specific fulfillment rules?
• What is our budget for warehousing, labor, and shipping?

Once you know your requirements, consider these fulfillment models:

• Self-fulfillment (in-house): You store products, pick, pack, and ship from your own space. Best for tight brand control and small volumes. Requires investment in space, staff, and systems.
• Third-party logistics (3PL): Outsource warehousing and fulfillment to a provider. 3PLs range from local warehouses to national networks; many offer integrations with ecommerce platforms and multi-carrier shipping.
• Marketplace fulfillment: Using a marketplace’s fulfillment (e.g., FBA) can simplify logistics but may reduce direct control over customer experience and data.
• Hybrid approaches: A mix of in-house fulfillment for premium orders and 3PLs for base volumes or regions, often used to balance cost and experience.

Key selection criteria for D2C fulfillment partners:

1. Location and network: Fulfillment centers near your customers reduce transit time and shipping cost. If you sell nationally, a provider with regional centers is advantageous.
2. Technology and integrations: A modern WMS that integrates with your ecommerce platform, accounting, and shipping tools enables real-time inventory visibility and smoother order routing.
3. Scalability and peak support: Look for partners who can flex capacity for holiday spikes—seasonal labor, extra packing stations, and temporary storage.
4. Service levels and SLAs: Define expectations for order accuracy, processing time, and damage rates. Ensure these are written into the contract.
5. Packaging and customization capabilities: If branded unboxing matters, verify the partner can handle inserts, kitting, variable packing slips, and gift wrap.
6. Returns management: Efficient reverse logistics are often overlooked but are vital to customer satisfaction.
7. Cost structure transparency: Evaluate per-order fees, storage fees, pick-and-pack costs, kitting charges, and minimums to avoid surprises.
8. Security and compliance: Ensure the partner follows standard security, insurance, and any industry-specific compliance (e.g., food, cosmetics).

Practical steps to evaluate partners:

1. Ask for references and case studies from brands similar in size or category to yours.
2. Request a site visit or a virtual tour of their facilities to assess cleanliness, organization, and technology in use.
3. Run a pilot program: start with a small SKU set and track KPIs such as order accuracy and processing time before a full migration.
4. Negotiate clear SLAs and review clauses for price changes, minimums, and exit terms.

Example scenarios help illustrate trade-offs. A small artisan skincare brand may prefer a local fulfillment partner with strong kitting and returns handling, because branded inserts and careful packing matter. A fast-growing apparel company selling nationally could benefit from a 3PL network with multiple warehouses to reduce transit times and shipping costs. A subscription box business might choose a fulfillment partner that specializes in repeat kitting and scheduled monthly shipments.

Cost modeling is an essential part of choosing a setup. Include these elements in your calculations:

• Storage fees (per pallet or cubic foot)
• Receiving costs (per inbound pallet or box)
• Pick-and-pack fees (per line item or per order)
• Kitting and customization fees
• Shipping costs based on carrier contracts and zone distribution
• Return processing costs
• Technology or integration fees

Finally, focus on people and processes. Even the best technology and facilities depend on clear processes and trained staff. Establish standard operating procedures for receiving, cycle counting, picking, packing, and returns. Track KPIs like order accuracy, on-time ship rate, and average days of inventory, and review them regularly with your partner.

Choosing the right D2C fulfillment partner and setup is a strategic decision that affects customer satisfaction and margins. By defining your needs, comparing models, running pilots, and tracking clear metrics, you can build a fulfillment approach that grows with your brand and keeps customers coming back.