The industry will grow as businesses increasingly outsource their order-fulfillment services.
New York, NY (PRWEB) April 13, 2014
Over the past five years, operators in the Order Fulfillment Services industry have had to contend with recessionary conditions and consequently, slow revenue growth. Industry operators provide logistics services, such as storage and warehousing, order processing, returns and exchanges and administration for various markets, including retail and manufacturing. During the recession, falling consumer per capital disposable income, as well as retail, manufacturing and trade activity, reduced the need to process, store and ship goods. As a result, demand for industry services significantly declined. This trend reversed, however, following the recession; a recovering economy, increasing consumer income and climbing manufacturing and retail activity boosted demand for order-fulfillment services. Nonetheless, demand has remained relatively lackluster, with industry revenue expected to slowly climb at an annualized rate of in the five years to 2014. With an anticipated increase in revenue in 2014, the industry won't fully recover to its prerecession levels.
However, over the past five years, the industry has benefited from increased logistics outsourcing and e-commerce sales. Increasingly complex supply chains have encouraged companies to outsource their order-fulfillment tasks to focus on their core functions and reduce costs. This has led to more business for industry players, especially those that offer other supply-chain solutions, as this creates a one-stop-shop package for customers. An increase in online sales over the past five years has also boosted demand for industry services. Online retailers often outsource their order-fulfillment operations to industry players. Moreover, according to IBISWorld Industry Analyst Maksim Soshkin, “the need for the expertise of industry players is amplified because online orders typically require quick processing and delivery, which is beyond the ability of many businesses.”
The Order Fulfillment Services industry has a low market concentration. In the five years to 2019, industry revenue is forecast to rise at an annualized rate, finally surpassing its prerecession peak. Increasing consumer spending and rising retail, manufacturing and trade activity will drive demand for industry services. Furthermore, “as supply chains become more complex and e-commerce flourishes, the need to outsource to industry players will rise,” says Soshkin. However, industry operators will face stronger competition from the in-house order-fulfillment operations of giant retailers like Amazon, thus tapering revenue growth.
For more information, visit IBISWorld’s Order Fulfillment Services in the US industry report page.
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IBISWorld industry Report Key Topics
The Order Fulfillment Services industry provides order- or product-fulfillment services on behalf of the product owner; businesses outsource fulfillment operations to industry operators. Industry services generally include storing goods, receiving orders, packaging and shipping the orders to end consumers, collecting payment for orders and handling returns and exchanges. Industry operators do not manufacture the products for which they provide fulfillment services, although they may 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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