7 Ways Your Business Can Improve by Outsourcing Fulfillment
Growing a business is fantastic and fun, until it isn’t.
Unfortunately, managing orders and getting them to customers is one of those areas that quickly turns growth from good to bad.
There’s a lot to keep up with, costs can scale before your revenues do, and all the warehouse processes are a significant time suck.
For growing businesses, especially ecommerce entrepreneurs, it’s tough to manage this and still have enough hours in the day to sleep.
Well, instead of staring into the void until it stares back, you have an option of outsourcing fulfillment tasks and putting some sanity back into your life.
Outsourcing isn’t for everyone. However, if the following seven things sound useful to you, outsourcing fulfillment might be right for your business. You already know it can work for outsource manufacturing.
1. Remove the Constant Worry
Does thinking about managing your inventory and orders just give you a headache? Does managing your growing business keep you up at night?
Every entrepreneur has been there, and so have major ecommerce stores as they scale up and reach new heights. It is stressful to master your order fulfillment cycle, especially as your customers grow more demanding.
Affording two-day shipping, reaching high accuracy levels, and just physically getting everything packed and out the door can make stress become overbearing.
If you’re stressed out about any part of your warehouse, go and talk with a third-party logistics company (3PL).
Even if you don’t end up using their services, you’ll likely feel some relief with the help they provide. If you do outsource, you can offload that worry to someone else and have them keep you accurate and on-time.
Trusting a professional company to get the job done is a relief, and it is usually a lot easier than trying to figure out who to hire to understand and predict everything your warehouse needs.
Plus, you’ll hear stories about companies just like yours, and it can be relaxing merely knowing that you’re not alone in this.
2. You Can Focus on the Fun Stuff
No one gets into business to micromanage operations. No, you’re after the fun – and that usually means sales. It’s the thrill of making something new that people love and then sharing it with them.
Outsourcing fulfillment frees you up to focus on the fun while the labor-intensive aspect of moving orders is handled. Leadership gets back to their basics, and you can be more inventive with influencer marketing, try new selling channels, do R&D to figure out the next product or option, and much more.
Warehouses are a lot of work, from keeping them running to preparing for scaling. Outsourcing to a partner with room to grow means you can focus on the sales and exciting opportunity around scaling while knowing that you have a partner ready to help.
3. Reducing Infrastructure Constraints
You’re growing, that’s great! Well, that is until you run out of room. Then it’s terrible, and can be really, really expensive. Outgrowing your current warehouse introduces some significant costs, whether you look for a new location or you physically build more space.
Your inventory demands should determine storage space. If you’re letting storage space determine inventory, you can quickly fall behind on orders, and that means losing money on carrying costs.
Outsourcing fulfillment is a terrific way to avoid those constraints and the big expansion costs because 3PLs tend to have a lot more storage than their customers need. They anticipate long-term grow and always try to be ahead of it — plus they pay for new sites, not you.
You’ve got space to grow while only paying for what you need. And, this may even save you money if you’re a CPG brand that has scaled enough to make bulk orders where your manufacturer provides a discount.
Cheaper and more convenient is not a bad way to go.
4. Control Those Skyrocketing Costs
Most ecommerce startups, and even plenty of established businesses, are bootstrapping operations to keep everything running as quickly as possible while trying to control costs and resources. You’re lean and hungry, but that means if a cost scales it can quickly impact other areas of business.
Order fulfillment is one of those easy places for costs to skyrocket beyond control. You’re paying for inventory, storage space, boxes, packaging and filler, and the actual shipping by a carrier. Plus, there’s a ton of labor and the software you need to get it all done.
Trying to bootstrap fulfillment can lead to late nights, extra stocktakes, costs around equipment and space, and more. Plus, the other side of fulfillment is having the warehouse team to get in your product orders and prepare them for customers, which means even more space and labor.
That all adds up, very quickly. Outsourcing can mitigate much of these concerns because you’re typically paying flat costs based on products, SKUs, and order volume. Labor is baked into those costs, but it is almost never as high as the labor you’d have to pay directly to fill orders on your own.
5. Easily Build Brand Reputation
Fulfillment companies are experts in getting your package to the customer’s door on-time and without damage, while also ensuring that orders are accurate. It’s something they should promise you.
Why is this important? Incorrect, late, and damaged orders harm brand reputation. When people don’t like the sales experience, they’re not going to buy from you again. If they have to return goods, they’re not going to buy again.
Protect yourself and your company by making the shipping process as enjoyable as the rest. You turned to a web expert to make your online checkout awesome and enjoyable. Do the same for your deliveries.
A fulfillment company has a lot of processes to check and doublecheck orders before they go out the door. If you’re struggling with products, especially if you have a lot of SKUs, turning things over can instantly remedy much of the human error you’re experiencing.
6. Scaling Is Simpler
Another size benefit from a 3PL is that they tend to have shipping and logistics arrangements for multiple markets. In some instances, this means they can easily reach multiple states with those low carrier rates, helping you save per order.
At other times, it can also mean that your goods are ready for international shipment with minimal fuss. An experienced 3PL can tell you what your products or packaging would need to clear customs, help you track related expenses, generate international agreements, and stay compliant with shipping-related laws.
They also know the tech tips to prevent you from experiencing later deliveries, improve fill rate and avoid other issues as you expand.
Your partner is invested in your success, so they’re going to be willing to share information and resources to help. By asking questions about their experience or speaking with another client who uses your 3PL for multi-market shipping, you can understand the process and get a jump start on an expansion.
The right partner allows you to focus on your products and sales in new regions, while feeling comfortable that your goods will arrive safely when orders start.
7. SKU - Try Something New
We’ll leave with an interesting and fun note: a fulfillment partner can help you offer new product combinations that your customers might love.
When you’re running an existing business and its warehouse, it can be hard to find the time to dig through your data and see exactly what people buy together, or what someone buys now and then again in three months.
A fulfillment partner frees up your team to look at that data and see what products get along well together, which you can turn into a kit.
It’s like buying a great knife and sharpener or cutting board at the same time. Put it all together in a single package and let people buy it at once, while relying on your fulfillment partner to package it all correctly.
This kitting can become an entirely new SKU but still have each component tracked by their inventory systems, so no one runs out. You do get the benefits of customers liking the simplicity and ease (kits make great gifts), as well as business savings with reducing shipping and packaging material costs.
By having your partner share data and prepare the packaging itself, you get to offer something customers love while letting experts ensure it arrives safely and looking great.
Those are just a few ways that outsourcing fulfillment can boost a business, but you’re likely to achieve even more when you find the right partner.