20 Jul Is Doing Your Own Fulfillment Holding You Back?
Many start-up and small companies choose to handle order fulfillment themselves, whether to save money or maintain control over their business. At some point, however, the question as to whether to outsource fulfillment will come up. For some companies, continuing to fulfill their own orders beyond what they have capacity for, can be detrimental to the business as a whole.
Order fulfillment is a multi-step process including communicating with the customer, managing products in the warehouse, picking and packing orders, and arranging for shipment to the customer. As a business grows, this can be a lot to handle in-house in terms of staffing and storage. Resources and finances that could be allocated elsewhere are centered on getting orders filled. A third-party logistics company can offer several advantages in fulfilling orders.
Companies may believe they are saving money by fulfilling orders in-house. As the company starts manufacturing more raw materials and storing more stock, there is usually a lack of space creating the need to rent a warehouse/distribution center. The costs include a warehouse lease, staff to run the warehouse, packaging equipment, and a software program to track the process. A complete financial assessment should be made to see the potential cost savings by moving to an outside fulfillment provider.
A third-party provider should enable you to save on shipping. Since shipping rates are based on volume, you will get access to better freight rates most likely. The majority of providers will allow you access to their shipping rates, along with lower prices on packing and shipping materials.
Self-fulfillment is a labor-intensive process as your company is responsible for the entire order, from start to finish, including any customer issues or returns. Depending on the size of the business, it may require a large number of employees to carry out these processes, in addition to a manager to oversee it. Employees that do not need to fulfill orders can concentrate on other areas of the business such as marketing, sales, or analysis.
Quick delivery is king in the ecommerce market. When you fulfill orders in-house, you do it from a location that is convenient for you. However, this might not be a location that provides optimal cost and transit times. A more centrally-located warehouse can make delivery times faster and save on shipping.
Ease of Use
When fulfillment is outsourced, a certain number of products are sent to the logistics provider. The warehouse is owned by the third-party provider and your company pays a fee for their services instead of a lease on the warehouse. Once the product is shipped to them, they take care of the entire process for you. And usually, since they are the experts in fulfillment, they can pick, pack and ship orders faster and with more accuracy than you were doing in-house.
Today’s technology makes it possible for a company to have full transparency to what is going on at the third-party company. Software is easily integrated so when an order comes from your website, the logistics provider can begin fulfilling it, and you can track it at every point in the process. And, a fulfillment company’s technology will optimize tasks like carrier selection and inventory management.
Many growing companies choose to move to an outside fulfillment provider when their sales reach a certain point and they are unable to fulfill the orders on their own. Outsourcing fulfillment can lead to cost savings, better service levels, and faster delivery to your customers.
If your company is looking for a reliable fulfillment partner, visit www.kablefulfillment.com.