FTC Action Could Spur Growth of Outsourced Fulfillment - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

FTC Action Could Spur Growth of Outsourced Fulfillment

The Federal Trade Commission's settlement last week with seven online retailers who had difficulty shipping goods as promised during the 1999 holiday season could be just the opportunity providers of outsourced fulfillment services need. With the FTC having levied fines as high as $300,000 and ordered refinement of the companies' fulfillment systems, an already fast-growing segment could grow even faster.

"Fulfillment has been the Achilles heel for online retailers," says David Schatsky, a Jupiter Communications analyst. "(The FTC settlement) layers another incentive for online retailers to get things right." Schatsky says the opportunity created by the FTC action is especially great for fulfillment outsourcers who are in the transition from bricks-and-mortar markets into the new economy.

One such company, New Roads, is positioning itself to take advantage of the opportunity. CTO Tom Lesica says the company intends to refer to the FTC settlement during its client pitches. According to Lesica, even those companies not interested in outsourcing should be paying particular attention to fulfillment as the holiday season approaches. "You have to take the whole operating model post-click and sanity-check it," Lesica says. "As you approach September and October, you'd better batten down the hatches."

Schatsky expects a majority of online retailers to outsource their fulfillment operations in the relatively near future. He says the number of companies providing outsourced fulfillment will grow fast enough that a buyer's market will prevail within the next couple of years, and "companies like New Roads are in a good position."

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of Cloud Computing - Fall 2020
The State of Cloud Computing - Fall 2020
Download this report to compare how cloud usage and spending patterns have changed in 2020, and how respondents think they'll evolve over the next two years.
News
Top 10 Data and Analytics Trends for 2021
Jessica Davis, Senior Editor, Enterprise Apps,  11/13/2020
Commentary
Where Cloud Spending Might Grow in 2021 and Post-Pandemic
Joao-Pierre S. Ruth, Senior Writer,  11/19/2020
Slideshows
The Ever-Expanding List of C-Level Technology Positions
Cynthia Harvey, Freelance Journalist, InformationWeek,  11/10/2020
Register for InformationWeek Newsletters
Video
Current Issue
Why Chatbots Are So Popular Right Now
In this IT Trend Report, you will learn more about why chatbots are gaining traction within businesses, particularly while a pandemic is impacting the world.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll