When building an e-commerce business in today’s competitive environment, you must focus on your company’s core competencies.
However, if you are spending a lot of time on a task that you do not consider your forte, then maybe it is high time that you outsource it.
Delegating other tasks, such as order fulfillment, is crucial for your online retail business. It helps free up your time, letting you focus more on the more important aspects of your business, like marketing or production.
Understanding Order Fulfillment
Successful business owners have a universal rule that they religiously follow: Make their customers happy. To achieve this, one must either master the complex process of order fulfillment or merely looking for someone who will do everything for them. The former will eat up the majority of their time while the latter can have a hefty upfront price.
Regardless, the choice is yours.
Order fulfillment is a type of delivery process that is utilized to move a product from its point of sale to the hands of the customer. Some people think it is just a mere process of shipping and distribution, but it is not always the case. It is actually how you respond to a customer.
It also refers to the steps an e-commerce business owner needs to take to ensure that the products are delivered to the right customers as soon as possible. In other words, order fulfillment is everything that you do as soon as the customer settles his orders through your online store.
Benefits of Outsourcing Order Fulfillment
Outsourcing your order fulfillment does have a lot of advantages, like having relatively lower shipping costs and a much wider market reach. Also, working with an order fulfillment provider lets you focus on the more important aspects of your business.
Keep in mind, though, that the overall success is not just purely dependent on the product’s quality. The quality of your order fulfillment service plays a role as well, whether your business succeeds or not. Wrong, delayed, or missing shipments are all ways where you can alienate your customers. That’s why you should get the order fulfillment right from the get-go.
To help you better understand the advantages of outsourcing your order fulfillment, here are ten benefits that will provide you with a better customer service experience, while you focus on ways to grow your business.
1. Lower shipping costs
We’re talking about location, location, location…!
Shipping will take time and will cost you money. Outsourcing your order fulfillment process to a provider that’s closer to where your customers are can potentially decrease the costs of shipping. For instance, the majority of your customers are found on the East Coast.
Your business is operating on the West Coast. When you are outsourcing an order fulfillment in New York, then your products will be a lot closer to your current client base. As a result, shipping costs will be significantly lowered.
There are several order fulfillment providers within the country and overseas. This provides you with an excellent opportunity to lower your shipping rates. You can even take advantage of the bulk delivery discounts. Having even these small savings per order will eventually add up to big savings in the long run, which can cover the costs for outsourcing in the long run.
2. Reduced shipping time
Through fulfillment centers, you can easily keep up to date with all its operations and software at a minimal cost. Several fulfillment centers also have multiple locations in the country. Thus, you can benefit from choosing which warehouse you wanted your shipments will be processed, significantly reducing the shipping charges as well as the shipping time.
For instance, working with a centrally located warehouse in the middle of the country will help you save costs on shipping, as well as accelerate your customer’s deliveries.
3. Save on operating costs
Working with a service provider specializing in warehousing and fulfillment will help decrease some of your e-commerce business’ operating expenses.
For instance, a third party fulfillment could:
- Decreases costs in leasing a warehouse or storage unit.
- Reduces taxes and labor costs that are associated with order fulfillment.
- Reduces the material costs in packing, because fulfillment services offer relatively affordable prices.
- Packs and ships more efficiently, allowing for more economical shipping services.
- Cut back the costs of shipping, primarily due to the location of the warehouse and the volume.
The money that you save from the operating costs could be invested in other areas of your business, like in your marketing efforts, which leads to growth in the long run. Also, while you might experience an increase or decrease in sales, it will not affect your base costs. The expenses in your storage will only change if you will increase or upgrade the number of your warehouse units.
4. Better customer service
When you take advantage of the technology and the efficiency a fulfillment center offers you, you are also able to create a better customer buying experience. Since most of these orders are being processed quickly and accurately, customers will experience a positive order experience from your company. As a result, they will likely buy from you again.
Happy and satisfied customers will likely recommend you to their own family, friends, and colleagues. This works as free advertising on your part.
5. Inventory storage
Fulfillment companies will get your inventory shipments just like how a retail store receive and store their products in a warehouse. Utilizing all the shipment details that you have provided them, your order fulfillment provider will then sort it out, check your stock, and then label it in their inventory system. If they found out that something is missing or damaged in your inventory, they will document the damage and notify you.
The fulfillment company will also help you track your sales, and tell you how much products needed to be stored in a particular area. They can even use that data to give you a better forecast when it comes down to your inventory purchases. Meaning, they will provide you with any inventory or sales data that you might need in order to make sound purchasing decisions in the long run.
6. More time to make your business grow
Over time, it is going to be relatively hard to scale your business, especially if you are just there, stuck in the warehouse shipping and packing boxes. But the thing is, anyone out there can build a box and ship your items, but no one has the same passion for your business as you do.
If you have a small business, then order fulfillment can be somehow manageable. If you really want your business to grow, then you have to learn how to let go of the simplest tasks. If there is anyone out there who can do a great job selling your brand, that is you. You do not have to do all the heavy-lifting by yourself. Instead, you can spend more time focusing on doing what you love in order to scale your business.
When you are receiving an increased amount of orders coming from various channels, then order fulfillment can eat up a significant portion of your working hours. Therefore, when looking for an outsource fulfillment partner, you have to consider what you will do with the extra time that you have. Focus more on other critical areas in your business, such as marketing, product design, and selling your product.
7. Prevents you from committing errors
An order fulfillment company helps reduce the risk of committing shipping errors. Through their automated processes and technology, you will have a more accurate and efficient order fulfillment processing. Remember that the accuracy of order is crucial in e-commerce. Committing errors can be a big expense, and even one mistake could offset your profit margin.
It is normal to feel a bit doubtful that third-parties will not deliver the “perfect” unboxing experience for your customers. However, these fulfillment partners have already built their business by paying close, meticulous attention to all the little details of shipping a product. Also, more often than not, these companies will decrease your percentage rates of missing boxes, damaged items, and improperly packed goods.
8. Reach new markets
E-commerce is one of the fastest-growing industries out there. In fact, several small businesses want to tap the global market by going online. However, the risks involved are what makes them hesitant to do so. When you outsource your order fulfillment, you can penetrate new markets without having to sell your products on brick and mortar shops.
Aside from that, you can easily take advantage of the order fulfillment company’s great shipping rates and location. Some companies would even go as far as assisting you in complying with the important documents in international trade.
9. The streamlined order fulfillment process
A lot of e-commerce fulfillment companies make use of the latest technology to process and ship your products efficiently. Most of their systems are usually incorporated with your e-commerce store, making the order fulfillment process more streamlined, and often has the following services:
- Carrier selection
- Item tracking
- Handling and shipping
- Security
- Processing of payments
- Management of inventory
An order fulfillment company will help you store, organize, and ship your products in a more efficient manner. They will also receive, store, and manage your products. You can easily access it to track your current stock levels, as well.
10. Returns are important
Returns are something that is inevitable for your business. Therefore, you have to be efficient in returns, as well. Returns for communication and processing is just as important as getting orders out there. A fulfillment partner will help you receive these returns, helps you on reports, and repurpose the boxes.
Final Thoughts
Customer expectations are high when it comes to e-commerce. And it will be more demanding in the future. Thanks to continuous technological updates and innovation. To thrive in an ever-changing market, you cannot just settle with an order fulfillment that is just satisfactory.
It must be, at least, close to perfect. That’s why there is always a need to outsource an order fulfillment company, as this will make you more competitive and efficient!
