Order fulfillment is essential for your business, and its success will usually depend on how quickly you can deliver your products to people’s doorsteps. Sounds simple right? Yes and no!
Order fulfillment can be challenging for businesses, especially start-ups. It is a time-consuming and labor-intensive process and requires individuals who have various skill sets. But, how can companies do order fulfillment effectively? The answer is simple, outsource it to a third-party order fulfillment service provider! Outsourcing a sizable chunk of your business operations to experts is one way of ensuring that nothing goes wrong with such an essential process. It will help you avoid any costly mistakes.
Imagine; you won’t have to manage and run a warehouse, pick, and ship products yourself. You can then use this saved-up time to concentrate on other aspects of your business and watch the money flow in like the river.
An outsourced order fulfillment service involves renting space from an outsourcing company that warehouses your items or products, processes your orders, and prepares them for delivery. Not to mention they will deal with packages of various sizes that you don’t have the space to deal with otherwise. After all, as a competitive business, you cannot afford to make mistakes when handling and ensuring products are ready for delivery when the time comes. Let us take a look at some other benefits that outsourcing order fulfillment brings to the table.
Outsourcing helps avoid long term lease agreements
When your business does the order fulfillment itself, you need to sign a long-term lease agreement, among other financial commitments, to rent a warehouse. When your business starts to grow, you will have to acquire more space, which means more lease deals. It skyrockets your overhead costs and reduces your ROI. You can avoid such costs by outsourcing order fulfillment to a third-party outsourcing company.
These companies usually charge of storage fee, which you only pay when you store your inventory. When you go for such an option, you will share lease obligations, utilities, equipment, and other overheads with all other retailers sharing the same warehousing facility. To sweeten the pot even more, you can then hire a freight forwarding company to ship your products around the world. It will be a win-win situation for everybody involved. For example, if you own a business in the USA, you can search online for freight forwarding US. You can then choose from a plethora of companies and go for the one that offers you the best rate. Such a streamlined order fulfillment and delivery process will allow your company to save money grow even quicker than before.
It helps you manage sales and seasonal fluctuations
Suppose you run a business with peak and off-peak seasons. In that case, overhead costs associated with in-house warehousing and shipment will remain constant even in off-peak seasons. Not to mention, you will also have to keep your workers on the payroll. It does not matter if you ship ten products or 10,000 products; you will still have to take out money to pay your warehouse employees and rent. Consequently, your costs will outweigh your profits during such a time, and if you do not have a contingency plan, the financial burden can be catastrophic.
Entrusting order fulfillment to a third-party saves you from paying such costs during the off-season, allowing you to manage sales and seasonal fluctuations a lot better. Firstly, you will only have to pay for the inventory inside the warehouse. And secondly, you will not have to pay the staff for handling all your merchandise. Something like this is crucial for your business when sales are low during the low sales.
Third-party order fulfillment companies have better inventory management technology
Inventory management will be a headache for you, especially if you are a start-up aiming to grow. It can result in inconsistencies, inventory errors, and lost items, which will result in wastage of money in the long-haul. Hiring a third-party order fulfillment company to look after all the nitty-gritty comes with the added benefit of state-of-the-art inventory management systems and technologies. It will help reduce shipping mistakes, ensure efficient and accurate order fulfillment. Also, through their IMS (inventory management systems), you will be able to track your stock better, select couriers, automate order processing, and process payment. It will let you streamline the entire warehousing, packing, and shipping process.
Outsourcing helps your lower shipping costs
Most third-party order fulfillment service providers offer flexible shipping services as well. If you decide to work with them, you will save tons of money in the long run. Shipping costs usually reduce your margins, especially if your products are far away from your customers. Most order fulfillment companies have their warehouses located in every part of the country and even internationally. Such a thing allows you to take advantage of low and competitive shipping rates.
Depending on which company you go for, expect to save anywhere from 15 to 35 percent in shipping costs. On top of that, these companies utilize efficient shipping software, which helps them select the best possible shipping service for you. You will also end up reducing packaging costs because you won’t have to buy packaging material and do everything yourself. Outsourcing order fulfillment will allow you to take advantage of an all-in-one solution for storing, packing, and delivering your products.
It helps you improve your customer service
Customer service is a vital part of any order fulfillment process. Whenever you get an order, it takes time to process and sort it out effectively. Working with the right order fulfillment service will allow you to keep up good customer service while the third-party company ensures the timely delivery of products.
These companies also offer customer support via email or phone, available for the customers 24/7 on all business days. Such a thing allows you to improve customer service and offer improved reverse logistics operations. The more satisfied customers your business has, the more profit you will make at the end of the day.
Customers don’t have time, and they expect timely deliveries in addition to service par excellence. Outsourcing order fulfillment allows your business to stay competitive in today’s business environment. Although outsourcing will take the entire picking, packaging, and delivery process out of your hands, it will also take away from you the costs involved in these processes. These order fulfillment companies exist for a reason: to successfully manage inventory and deliver products worldwide. Be smart and outsource it.