When you start an eCommerce business, fulfillment is a vital aspect of your daily duties. It describes the operation that involves packing, shipping, and warehousing of products.
For many e-commerce businesses just starting out, fulfillment is commonly carried out in-house. However, as your business expands, you may want to adopt outsourcing fulfillment.
Outsourcing e-commerce fulfillment involves employing a third-party provider to be in charge of the whole order fulfillment procedures, including shipping orders to clients and warehousing inventory.
These organizations own the resources, equipment, tools, and capabilities needed to successfully manage delivery logistics, which qualifies them as the perfect solution for small-to-medium business owners that do not have the initial capital to develop their fulfillment operations.
Nevertheless, whether or not you need to outsource your e-commerce fulfillment is a decision to make after examining the pros and cons explained in this article.
The Pros of Outsourcing Your eCommerce Fulfillment
Reduced Shipping Expenses
One of the most intrinsic advantages of third-party logistics is its cost-effectiveness.
Considering the fact that your margins could get derailed due to high shipping costs, particularly if your goods are far from your clients, a lot of e-commerce order fulfillment providers maintain the distribution of their warehouse facilities across the country and overseas. This allows them to give competitive delivery costs.
The closeness of warehouses to your clients, coupled with our worldwide shipping capabilities, will help you reduce both the transportation cost and the time required for shipping. A lot of 3PL businesses have negotiated discounted delivery costs with shipping companies due to the volume of orders they usually send out. With our extensive network and expertise in global logistics, we ensure efficient and reliable delivery to customers around the world.
In addition, they have unlimited access to the most recent shipping technologies that enable them to compare shipping rates from various providers before choosing the most cost-effective options for all orders.
Furthermore, if your inventory is distributed across various warehouses, it will help your shoppers’ expectations when it is associated with faster delivery, including same-day delivery.
Allows You to Focus on Your Business
Order fulfillment providers and logistics are essential for all e-commerce businesses. It will be easier for you to manage fulfillment while your business is small. However, once you start improving your delivery operations, it could easily become daunting. Consequently, it can make you lose focus from raising the level of your business.
Moreover, committing time-consuming tasks will easily leave you with more strength and focus required for you to go after larger business goals. In addition, e-commerce fulfillment organizations have a well-skilled workforce that is capable of doing the picking, packing, and shipping much faster than you and your team would be able to.
When you have more time for your business, it means you have more time to create new products or improve the already existing ones, grow your brand, increase marketing efforts, and as well expand to new markets.
Better Customer Experience
Shoppers nowadays expect quick and preferably free shipping every time. Meanwhile, the services involved in outsourcing e-commerce order fulfillment can help you meet customer expectations regarding shipping speed or even exceed it.
When you partner with a 3PL provider that will distribute your items across several warehouses, it will reduce the rate at which your packages will always need to go through shipping zones and, as a result, reduce the shipping time and cost.
Moreover, outsourcing e-commerce order fulfillment will allow you to provide a more appealing delivery, which may include shipping within two days.
All these will ultimately contribute to providing better and flawless customer service.
Provides Access to Technology and Analytics
Handling order fulfillment on your own usually involves a lot of manual procedures, but outsourcing fulfillment orders will enable the operations to depend on advanced software. For instance, you will benefit from utilizing new tools and seeing inventory reporting and distribution metrics.
3PL companies now provide integrations to connect the whole supply chain to your sales channels. They also depend on inventory management software which allows fewer mistakes and increased order accuracy. Operating in the ever-evolving world of logistics, companies must stay updated with advanced technologies in order to keep up with their competitors. James&James has revolutionized the industry by providing 3pl services UK, which helps clients to cut down the time it takes to create the demand plan through real-time data gathering. The award-winning software offered by the company allows clients to stay on top of their inventory management, providing immediate control and recording of all the data. This makes the company a trustworthy partner for businesses that seek accuracy and efficiency in their logistics operations.
Adds Industry Experts to Your Team
An effective e-commerce order fulfillment process needs the strict organization of several tasks among many people. This level of complexity can make it too demanding for business owners to manage themselves.
This is where 3PL and 4PL companies come in. They work as industry experts in every aspect of e-commerce warehousing and order fulfillment. They also work with numerous sellers and handle a large number of orders which enables them to create shipping discounts that they can give to business owners.
3PLs have the facilities to manage numerous complex tasks immediately they come up, and they solve issues in a quicker way. This leads to higher scalability for your e-commerce business as it grows.
Having industry experts on your team will allow you to have a set of people that you can depend on to always give you updates on recent industry trends and ensure that your shipping and logistics remain seamless.
The Cons of Outsourcing Your eCommerce Fulfillment
Minimum Control Over Delivery Procedures
When you decide to outsource your e-commerce order fulfillment, it means you are giving up a lot of control over the process. Meanwhile, if you are uncomfortable with a third party handling this part of your business, it may be an issue.
Furthermore, when problems with shipping and delivery occur, it can be a problem to solve if you do not have control over fulfillment because when clients reach you, they will expect you to react and fix the prevailing situation. Sadly, you may not have access to the resources you need to fulfill that.
In a bid to minimize the possibility of having such experiences, getting prestigious e-commerce fulfillment providers with excellent reviews is the best.
Large Initial Investment
If your business is in its early development stages, outsourcing order fulfillment could initially require more money than you are comfortable investing. Although outsourcing order fulfillment pays in the long run, the initial cost is pretty high.
Moreover, as soon as you start cooperating, the pricing of e-commerce fulfillment will include paying for picking and packing, inventory storage, and shipping.
If you have many products selling well, it may not be hard to cover the costs and remain profitable. However, if your products are sitting on shelves instead, the expenses may be too expensive.
Carefully calculating fees will help you know if your business would benefit from outsourcing or not.
Getting Into Agreement
As already discussed in this article, the pros of outsourcing your order fulfillment considerably exceed its cons. Nevertheless, you should ensure that you sign the necessary agreements with your desired outsourcing provider, being aware of what drawbacks you may face.
Getting into agreements will avoid unnecessary arguments in the long run.
