Fulfillment-as-a-Service (FaaS)

What is Fulfillment-as-a-Service (FaaS)?

Fulfillment as a Service (FaaS) refers to a B2B service model where a service provider takes care of all fulfillment needs of an enterprise customer, typically a B2C retailer. The range of services differs but typically includes the picking, packing, and physical storage and shipment of customer orders. FaaS is related to third-party logistics, often abbreviated as 3PL, in logistics and supply chain management. In some cases FaaS is also referred to as Logistics as a Service or LaaS for short.

What are the benefits of FaaS (Fulfillment-as-a-Service)?

Financials: from capital expenditure (CAPEX) to operating expenses (OPEX), more flexibility and no upfront investment

If you own assets that relate to fulfillment and logistics such as warehouses and a fleet of trucks, you need to invest in those assets and overhead costs are unavoidable. Outsourcing fulfillment via the Fulfillment as a Service (FaaS) B2B service model implies that one only pays for the acutal service used to fulfill orders such as storage space or transportation. There is no need to invest in either assets or people. Therefore asset utlization, asset management, and people management is irrelevant and investments can focus on more central business operations such as R&D and marketing.

Scalability - FaaS grows with your needs

Fulfillment as a Service (FaaS) is an on-demand B2B service that adapts to the needs of the user. Therefore, one can scale fulfillment requirements in a fast and easy manner. This is especially usefull for businesses with high levels of seasonality such as toy manufacturers. FaaS grows with your needs.

Economies of scope leading to more efficient and faster shipping

Fulfillment as a Service (FaaS) providers have years of experience, specialized resources and an efficient network of required assets such as warehouses, including a network of logistics business partners, to fulfill orders fast and efficiently. Building this on your own takes time and huge investments. Fulfillment as a Service (FaaS) is a fast route to fulfillment excellence.

Plannable and predictable

Fulfillment as a Service (FaaS) typically provides for transparent and predictable pricing even befofre a service contract is signed. This helps to plan operating expenses as the business grows or adapts to macroeconomic changes.

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