The Benefits of Outsourcing Order Fulfillment
All entrepreneurs selling products to commercial market consumers via mail delivery must have an efficient system for fulfillment. When your website begins drawing in a high volume of orders, you must be able to receive, package, and distribute (ship) products to every customer in a timely manner. Your options include either operating an in-house fulfillment system, or outsourcing part or all of your fulfillment process, including distribution. The outsourcing may yield important benefits, if you determine that it is appropriate for your business.
Outside Fulfillment Resources
A full-service fulfillment company can provide you with the benefits of an end-to-end fulfillment solution. You can operate with the freedom of having all of the following tasks performed for you.
Shopping for Outsourcing
There are thousands of order fulfillment companies to choose from. The recommended way to identify one that fits your business's needs is simply to research through word-of-mouth. Ask experienced business acquaintances, friends, and the employees managing your website for referrals to a company that has proven to be reliable.
If you decide to handle your own shipping, use the U.S. Postal Service, Federal Express, or UPS, as these are generally acknowledged as the most reliable carriers. These services all provide downloadable software through their websites, so that you can track your orders and start shipping immediately. You will, of course, have to take your packages to your post office for shipping, or schedule to have them picked up by whichever delivery company you choose.
Is Outsourcing Right for You?
Outsourcing frees you to spend more time focused on sales. On the other hand, outsourcing cuts into your profits as you pay for the convenience of outsourced services. So, outsourcing your fulfillment processes may only make the best sense financially if you can expect to make more money by using your time on other business tasks.
Choosing a Fulfillment Company
Make sure that the fulfillment company that you select actually wants to work with a small company. And, do your research upfront to confirm that its services are reliable. Whatever kind of fulfillment operation you establish should not cost above 10 percent of your sales plus actual shipping costs.
Benefits of Outsourcing
In addition to freeing you to work on sales, here are some other significant ways your company can benefit from outsourcing order fulfillment.
- Reach Distant Markets and Customers*
Working with a fulfillment company that has its own shipping hub in South America, Asia, or Australia, for example, reduces your risk of attempting to move into those (underserved) markets. And, in non-English-speaking markets, where packaging translations, etc., is an issue, partnering with a fulfillment company allows you to test markets without investing excessively.
- Avoid Customs Complications on International Deliveries*
Unpredictable delivery times, lost shipping, poor tracking, high brokerage fees, and high customer dissatisfaction and return rates can altogether overwhelm a fledgling business. By outsourcing, you can send a bulk shipment to a warehouse within a foreign country. This reduces shipping costs and minimizes the number of times in a given period that your firm must deal with customs issues. As you make sales to customers in a foreign country, your products are then sent from a warehouse inside the country. This setup can make it feasible to operate in countries where you could not do so without outsourcing.
- Reduce Costs by Maintaining Inventory*
A fulfillment service expands your domestic and international market coverage, lowering your shipping costs and increasing your product's potential in a new market. Storing inventory closer to your customers allows you to minimize your use of use your delivery service's "last-mile" services. You can rapidly expand into new markets and just as rapidly withdraw from them. You gain all the benefits of expansion, but at greatly reduced investment cost compared to opening your own new warehouses where and when needed.
Outsourcing fulfillment can free you to spend much more time on generating new business. And, it allows you to seamlessly manage fluctuations in sales volume. It also keeps your shipping operations local, even when your business expands to national or even global distribution. Correctly determining which parts of your fulfillment operations should be outsourced can make your business much more efficient and successful, especially as you find it necessary to scale your processes to meet demands as your business grows and expands into more distant markets.
Stop by Heeter in Canonsburg, PA to see if outsourcing can be beneficial to your company.