Product Fulfillment vs. Marketing Fulfillment: What Do You Need?

Frequently during meetings with prospective clients, we find customers comparing us to larger product fulfillment vendors such as Amazon as they attempt to understand exactly what we offer.

This leads to a longer discussion about product fulfillment vs. marketing fulfillment, what these two disciplines have in common, and more importantly, how they are different. Invariably, the conversation zeroes in on order processing fees, receiving costs, freight tables and shipping materials—and why those costs are so different depending on the vendor.

The confusion is understandable. On the surface, the differences between product and marketing fulfillment may seem subtle. But once you dig in, it becomes clear that these two approaches offer distinctly different solutions to the same problems. It’s not a case where one is clearly superior to the other; it depends on what the client is looking for and what their budget—and organization—can support.

Which approach would be best for your organization? To help you decide, we’ll be producing a series of blogs over the next several weeks that explore the various aspects of product vs. marketing fulfillment and how they compare. We’ll delve into specific topics—software; receiving and storage; reporting; support; and solutions—and attempt to explain the benefits and drawbacks of each approach so you can make informed decisions moving forward. And by providing this critical background, we can help you ask the right questions to determine exactly what level of service you and your team need.

An Introduction to Product Fulfillment and Marketing Fulfillment

Let’s start at the beginning: what exactly are product and marketing fulfillment? While at a high level they both address a similar objective—helping produce, manage and deliver materials to various audiences—they actually approach the processes very differently.

Simply put, product fulfillment refers to delivering products to recipients after they have been purchased. This process entails multiple steps, including inventory management, order processing, and shipping and delivery—everything required to ensure the right product is shipped to the right customer in a timely manner. The reason for the delivery—the driving event or action—is irrelevant. The objective is to simply get products into recipients’ hands.

Marketing fulfillment, on the other hand, performs many of the same basic services but specifically for marketing activities related to initiatives designed to generate leads, drive sales and build customer relationships. These can include the creation and distribution of promotional materials such as product collateral or branded swag, direct mail or e-mail marketing campaigns, coupon and voucher redemption programs, or customer relationship management programs (customer database management, tracking customer interactions, and other CRM-related activities).

To summarize: product fulfillment focuses on the operational aspects of delivering physical products to customers, regardless of the underlying triggering event, while marketing fulfillment is specifically targeted at supporting activities designed to reach potential customers, generate leads and build brand awareness. To simplify further, product fulfillment ensures customer satisfaction through efficient order fulfillment, while marketing fulfillment drives customer acquisition and engagement through targeted marketing strategies.

Which Do You Need?

Which type of fulfillment partner do you require? It depends many factors, of course, but it generally boils down to your specific needs and the priorities of your business. For instance, you might benefit from a product fulfillment vendor if your priorities are:

• Cost and efficiency: Outsourcing product fulfillment to a specialized partner can be a cost-effective move, especially for small and medium-sized businesses. It eliminates the need to maintain warehousing space, infrastructure and fulfillment personnel, reducing overhead costs. Product fulfillment partners also have relationships with shipping carriers, which typically results in more competitive shipping rates.
• E-commerce: Businesses that primarily operate online in the e-commerce space need a partner that can handle inventory management, order processing and shipping logistics, allowing them to focus on marketing and sales.
• Scalability and growth: If your business is experiencing rapid growth, or if you plan to expand operations, a product fulfillment vendor is well equipped to handle the complexities of inventory management and fulfillment that come with increasing numbers of orders.

On the other hand, you will benefit from the expertise of a marketing fulfillment partner if your primary needs include:

• Marketing expertise: If your company lacks specialized marketing skills in-house, a marketing fulfillment partner can provide strategic guidance, help you develop marketing campaigns, and execute various marketing activities across multiple channels.
• Creative content and design: Many marketing fulfillment vendors have access to resources that can help you create compelling marketing collateral, videos, graphic designs, and other types of content.
• Lead generation and conversion: Marketing fulfillment vendors often have experience with using marketing channels and tactics to improve customer engagement and sales. This includes suggesting and implementing lead capture mechanisms, moving leads through targeted campaigns, and increasing conversion rates to help with your lead generation activities.
• Marketing analytics and optimization: If your business values marketing analytics, performance tracking and campaign optimization, marketing fulfillment providers can analyze data, generate reports and provide insights that enhance marketing strategies and improve ROI.

Hidden Costs

Now that we’ve discussed what each type of fulfillment vendor can do, before you decide which approach is best for your company, it’s equally important to understand what these potential partners don’t, or won’t, do. While product fulfillment is, on the surface, a more straightforward and therefore more cost-effective service, it comes with hidden (and some not-so-hidden) costs that can drive prices higher depending on your level of preparation and planning. Marketing fulfillment may be more expensive, depending on the services you enlist them to perform, but it allows you to be more flexible and makes up for shortcomings on your team that you can’t afford to staff.

Consider the following analogy. Think of your marketing efforts as if they were building a house. Using a product fulfillment vendor is like acting as your own general contractor, responsible for hiring and scheduling all the subcontractors like electricians, plumbers, painters, etc. The product fulfillment vendor will perform onsite management, ensuring the teams are put to work and the house gets built, but it’s up to you to make sure the right teams arrive on the right day. If anything is delivered out of order, the process screeches to a halt until you can resolve the problem, consuming additional time and resources. If everything goes right, it’s very efficient and cost-effective; if anything goes wrong, all bets are off.

Marketing fulfillment in this scenario acts as the general contractor, hiring all the subs and scheduling their activity. You tell them what you want and when you want it, and they make sure it happens. They handle any emergencies or scheduling conflicts. This approach might be more expensive, but it is also more effective if you don’t have the resources or budget required to source all your subs, or if you don’t have the necessary expertise on staff.

Before You Decide

As you can see, the decision of whether to use a product or marketing fulfillment vendor is not a simple choice; it requires careful thought and considerable research to determine which approach most benefits your organization.

We’ll do our best to get you started on that research. In the next installment of this blog series, we’ll cover the various types of software and interfaces you can expect from a product vs. a marketing fulfillment partner, and how that might factor into your final decision.