The industry will grow as companies increasingly outsource order fulfillment
Los Angeles, CA (PRWEB) October 17, 2012
Firms in the Order Fulfillment Services industry provide services for product owners, including storage and warehousing, order processing, returns and exchanges and administration. An increasing number of companies have outsourced their order fulfillment services to industry firms to concentrate on core business activities and save money. Industry demand is dependent on several factors, including demand from the retail, manufacturing and wholesaling sectors, per capita disposable income and internet usage. “Although a greater number of companies have outsourced order fulfillment services to third party operators in the past five years, industry companies have struggled due to lower trade volumes, slow growth in disposable income and decreased demand from retail trade,” says IBISWorld industry analyst Lauren Setar.
The worldwide economic downturn reduced domestic and foreign consumer spending and caused the value of US trade to plunge. “Along with the weak economic environment,” adds Setar, “falling manufacturing activity, industrial production and inventory levels cut into industry revenue.” As a result, in the five years to 2012, Order Fulfillment Services industry revenue has fallen marginally at an average annual rate of 0.2% to $8.5 billion. The industry has a low level of concentration, as major player DHL is the only industry firm that generates a significant share of industry revenue. Over the five years to 2012, concentration has been stable and the number of industry firms has remained flat.
Due to the recovering economy, the industry's revenue has grown steadily. The industry has benefited from higher production volumes, primarily because of greater disposable income and demand from retail and trade activity. This recovery, combined with steady order fulfillment outsourcing to industry companies, will contribute to a 1.6% revenue increase in 2012. Over the past five years, the industry's slight decline has been somewhat offset by rising internet usage. An increasing number of consumers have internet access and can easily purchase products, which increases demand for order fulfillment services.
In the five years to 2017, the Order Fulfillment Services industry is expected to grow as companies increasingly outsource these services to industry firms. During this time, the industry will also benefit from the strengthening US economy and greater inventory from American manufacturers, wholesalers and retailers. Additionally, the growing number of broadband connections will continue to spur demand for industry services. As a result, industry revenue is forecast to grow in the five years to 2017. For more information, visit IBISWorld’s Order Fulfillment Services in the US industry report page.
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IBISWorld industry Report Key Topics
This industry provides order or product fulfillment services on behalf of the product owner; businesses outsource fulfillment operations to industry firms. Industry services generally include storing goods, receiving orders, packaging, shipping the orders to end-consumers, collecting payment for the order and handling returns and exchanges. Industry firms do not manufacture the products for which they provide fulfillment services, although they can perform light assembly tasks.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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