Outsourcing to a fulfillment center will save you time so that you can focus
on growing your retail e-commerce business. Here are the five benefits of outsourcing order fulfillment.
Let's face it; there has never been a better time to start a retail e-commerce business than now. With global e-commerce retail sales expected to total $6.169 trillion in 2023 and make up a 22.3% share of total retail sales, it's easy to see why so many people are jumping into the online retail world.
But with all that said, running an e-commerce store is not as simple as just opening your website and waiting for customers to come knocking on your door. And one of the biggest mistakes you can make is to become distracted by activities that keep you from growing your business. You don’t want to store inventory, process, ship, and fulfill customer orders in-house if it keeps you from selling. It can be extremely overwhelming, time-consuming, and costly.
At some point, you'll need to outsource specific tasks to save money and increase efficiency. And one of those tasks is fulfillment services. But what exactly does outsourcing fulfillment mean? Is it worth it? How do you know if you should outsource or keep doing things yourself? Keep scrolling, and you'll find out in the sections below!
What Does Outsourcing Fulfillment Mean?
Outsourcing order fulfillment means partnering with a third-party service to handle the logistics of fulfilling your products. This could include picking, storing, packing, shipping, and delivering your items to customers. In other words, this is when someone else takes care of the details of getting your product from the factory to the customer. So instead of worrying about getting your products shipped, processed, packed, and delivered, you can focus on growing your business and making more money.
Outsourcing To A Fulfillment Center - Is It Worth It?
If you're looking to save time and money by letting a third-party professional handle all your logistics needs as your focus on growing your business, it is 100% worth it. But how exactly does the best fulfillment partner save you time and money? Find out below!
1. Leave It To The Experts
As we mentioned, you can't afford to be distracted by what does not generate revenue when running an e-commerce business. That's because you don't want to spend valuable time managing every aspect of your business. Instead, you want to focus on building relationships with your customers and creating amazing products.
By leaving the logistics of fulfillment to a third-party service provider, you free up your time to focus on growing your brand and increasing your profits. The best fulfillment centers have knowledgeable personnel with years of experience in order processing, inventory management, safe packaging, and shipping.
2. Reduce Your Inventory Costs
If you operate your own fulfillment center, you have to pay for storage space, insurance, utilities, and labor costs. Not only will these expenses add up over time, but they can also eat away at your profit margins.
Outsourcing your fulfillment operations to a third-party company eliminates the cost of paying for these expenses. Here are a few reasons why:
Storage Space. You must rent, lease, or purchase warehouse space while running your fulfillment operations. If you lease a large facility, you may spend thousands of dollars monthly on rent alone. By outsourcing your fulfillment to a third party, you no longer have to worry about paying for storage space.
Insurance. As we mentioned above, you have to insure your own warehouse. But even if you use a reputable insurance company, there are still fees associated with insuring a warehouse. These fees can be costly and eat into your bottom line.
Labor Costs. Even though you might not think so, employees make up a big part of the cost of operating a fulfillment center. They must be paid, trained, and supervised. All these add up to a lot of overhead that eats into your profit margin. But, conversely, a fulfillment center is responsible for hiring, training, paying, and supervising its staff.
3. Increase Customer Satisfaction & Retention
One of the most important things you can do to increase customer satisfaction is to ensure that your products arrive safely and on time. When you operate your fulfillment center, it's easy to forget that your customers need their orders quickly.
But when you hand off the responsibility of handling your shipments to a third-party fulfillment center, you can rest assured knowing that your customers' packages will get where they need to go without delay.
Here are a few more ways a fulfillment service helps you improve customer satisfaction and retention:
Lower Shipping Costs. When you hire a third-party fulfillment service, you can leverage their volume discounts with the shipping carriers.
Professional Packaging. When you outsource your fulfillment services, you can rest easy knowing that your merchandise is packed with care, safely and securely.
Scalability. When you outsource your fulfillment to a third party, your business is scalable for growth. If you get a sudden spike in orders, an outsourced fulfillment center is able to accommodate the extra volume and get your orders out the door timely.
4. Improve Order Accuracy & Process Speed
If you've ever ordered something online, you know that sometimes you receive the wrong item or one that doesn't meet your expectations. This can lead to frustration and wasted time.
But when you outsource your fulfillment operations to a professional fulfillment center, you can expect accurate tracking information and better quality control. In addition, you'll save money because you won't have to pay for packing errors.
5. Reduce Inventory Management Costs
You're responsible for managing inventory levels when you operate your own fulfillment centers. That means keeping track of what inventory you have in stock, what needs to be replenished, and which items should be sold.
You don't have to worry about all this when you outsource your fulfillment center. The best fulfillment center uses world-class order fulfillment and inventory management technology that guarantees complete visibility & accuracy, total control, and live sync updates, allowing you to focus on growing your business instead of worrying about inventory management. Besides, you'll enjoy access to detailed reports that help you keep tabs on your inventory at any moment.
What Are The Signs You Should Outsource to a Fulfillment Center?
If you're still on the fence about whether you should outsource order fulfillment or keep doing everything yourself, here are some signs that might indicate you should consider outsourcing:
You have too many orders. If you find yourself overwhelmed with too many orders, it may be time to outsource your fulfillment center.
Your business is growing. As your company grows, so does your demand for fulfillment services. Hiring a professional fulfillment provider allows you to scale up as needed.
You incur exorbitant shipping fees. If you're paying exorbitant shipping fees, it may be time to outsource your fulfillment.
Your customers are spread across the country. If your customers are spread across different states or countries, it may be time you outsource your fulfillment. This helps ensure that your customers get the products they need quickly and efficiently.
You receive a lot of complaints about delays. Order delays can impact your bottom line, as 38% of customers are likely to abandon their order if it takes more than a week to deliver. To avoid this, you should outsource fulfillment to an efficient service that ensures fast delivery times.
Boxzooka Can Help You With Your Order Fulfillment Needs
We understand how overwhelming it can be to manage the order fulfillment process. That's why we offer flexible solutions that allow you to choose the right fit for your business. Whether you want us to handle every aspect of your fulfillment process from start to finish or just one component, we've got you covered.
We also provide custom fulfillment services for businesses that prefer to do things themselves. Our dedicated team will work closely with you to create a customized plan that works for your business.
Our goal is to ensure your business runs smoothly and efficiently while saving you time and money. Contact us today to learn more!