Articled provided by Elogistic; posted December 11th, 2019
Handing certain tasks to others is important. It will allow you to save valuable time so you can focus on building your business. A third-party logistics company (3PL) can act as a great partner, helping to warehouse/store your products and fulfill new orders from your customers. To operationalize all of this, you would set up an integration between your e-commerce store and the logistics company to smoothly transit new order details for subsequent picking, packing, and shipping. Various logistics companies can handle a wide range of supply chain functions, depending on the need of the client. Let’s look at some of the direct benefits of outsourcing your fulfillment.
The Benefits of Outsourcing your Fulfillment
When done correctly and efficiently, outsourcing fulfillment can bring great results for e-commerce companies. It can allow you to focus on other aspects of your business and drive growth in other areas such as reducing costs and improving the order management process. Here are five of the biggest advantages: LOWER YOUR SHIPPING COSTS Logistics companies transport shipments in bulk and receive discounts for shipping high volumes. Those with an extensive global footprint will be able to secure the best pricing, allowing them to offer their customers lower shipping rates, so you can keep your costs in check and pass down lower rates to your customers as well.
REDUCE YOUR OPERATING COSTS
Demand can change over time and can differ drastically from month to month. In-house fulfillment, with fixed costs for warehouses and employees, can become a burden when orders decrease due to seasonal or other reasons. You can be left with unused warehouse space and idle staff, which is wasteful and costly. On the other hand, if demand grows or there is a need for more space, it could be costly to move to a new location, add warehouse racking, and hire more employees. In the interim, there could be delays in the processing of orders which could lead to lower customer satisfaction. With an outsourced fulfillment strategy, demand fluctuations won’t impact your costs or product availability in the same way. Companies only pay for the space and services they need, lowering operating costs substantially and eliminating the risk and worry about handling fulfillment in-house.
EXTEND YOUR REACH
Is the sky the limit? Not with a globally established fulfillment company. Expanding to international markets becomes easy when you partner with a firm that already has warehouses around the globe. Foreign markets can be intimidating in many ways. The delivery experience for your international customers should be locally adapted, to increase customer satisfaction, and build loyal (aka returning) customers. With an outsourced fulfillment strategy, companies can gain more customers domestically and internationally, expanding market size exponentially.
USING TECHNOLOGY TO STREAMLINE ORDER FULFILLMENT
Many logistic companies use advanced technologies to assist with the fulfillment and shipping process. As they have expertise in making these operations run smoothly, they often have innovative and helpful tools that make it easy to integrate your online store or marketplace with them. These software programs or customer interfaces typically offer an overview of your pending, processed, and completed orders, a chance to track each package individually, and a way to view the costs. At the end of the day, their specialized software and expertise will take the hassle out of shipping for you and help your company to run smoothly. FOCUS ON YOUR BRAND Last but certainly not least, a big advantage of outsourcing your company’s fulfillment is to free up time for working on your brand. Long-term success comes through an intensive all-round marketing strategy that lets your brand shine and make a name for itself. The logistics side of it is crucial, but it is something that can easily be handled by an external company while the branding should come from the company directly. Ultimately, you know your business best and should be managing the brand messaging in-house. By outsourcing the logistics process, e-commerce companies can focus on their brand, the innovation process, and marketing their product. Through utilizing an outsourced fulfillment strategy, companies will be able to drive growth for their business, domestically as well as on a global basis.
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