It’s the age-old e-commerce question: Is it better to fulfill orders yourself, or to outsource to an order fulfillment partner? It’s not a one-size-fits-all answer. Let’s play devil’s advocate and look at some various factors that might help you decide.
Your brand is growing. You’ve been successful, and you’re shipping hundreds of orders every week. You’re feeling good about your success, but you have a nagging feeling that something’s not right. Important tasks are falling by the wayside because it takes so much time to pick, pack, and ship your orders. The things that made your business grow—innovation, development, creativity, marketing—have dwindled to nothing because you’re spending all day filling orders.
In other words, you’re getting buried by your own success.
If this is the situation you’re in, it’s time to find a fulfillment partner to take order fulfillment off your plate. That way, you can get back to doing what you’re best at—growing your business.
What is Order Fulfillment?
In the simplest sense, order fulfillment is the process of getting products that customers have ordered into their hands. It encompasses just about everything that happens between a product being ordered and being delivered.
Order fulfillment centers handle all aspects of this process for their clients, including receiving and warehousing inventory, picking, packing, and shipping orders, and processing returns. Some companies provide more comprehensive services, such as kitting, subscription boxes, and shipping crowdfunding rewards.
By placing the time-consuming task of shipping customer orders into a fulfillment partner’s hands, e-commerce merchants can focus on building their brand.
Is an Order Fulfillment Partner Right for Me?
Ecommerce retailers and brands have numerous options when it comes to order fulfillment. If you’re just starting out, it may be feasible to ship out of your garage or home office. When you’re only shipping a dozen orders a day, doing things this way isn’t much of a burden. You could also go with a drop-shipping model, in which your manufacturer or wholesaler ships products directly to your customers. This works well for retailers who don’t require much control over their own order fulfillment process.
Once your business starts growing, you’ll need to look at other options, like managing your own warehouse or outsourcing to a fulfillment company. While both models have their pros and cons, many ecommerce merchants find that outsourcing their order fulfillment provides valuable benefits.
Going It Alone: Keeping Fulfillment In-House
As your business grows, you might consider leasing or purchasing a warehouse. This could be a good option if you or others on your team have a strong background in logistics, including warehousing, inventory management, and shipping. If you’ve already developed a solid distribution network and close relationships with shipping carriers like UPS, FedEx, DHL, and the postal service, you can leverage those relationships to get great rates and superior service.
In this model, you’ll have full control over your space and inventory. You’ll be able to customize your warehouse to your own needs without worrying about sharing space with any other businesses. You will also have complete control over how your products ship. For example, if you need to use custom packaging or prepare your shipments in a specific way, you’ll be able to make sure it gets done the way you want it. Some order fulfillment companies might not be able to comply with such requests, or will do it only after charging a high fee.
Partnering Up: Outsourcing Fulfillment
For many emerging and established e-commerce brands, outsourcing order fulfillment to a third party logistics expert is a no-brainer. What they give up in terms of control is more than offset by the freedom offloading such a large and time-consuming responsibility provides. Here are just a few of the ways growing eCommerce brands can benefit from taking on an order fulfillment partner:
Your time is valuable, and running an eCommerce company is a demanding, time-intensive endeavor. Growing a business involves research, product development, web development, marketing, selling, customer service, and countless other high-level and operational tasks. If you’re like most eCommerce entrepreneurs, you simply don’t have time to take care of order fulfillment, at least not without putting undue stress on yourself.
Order fulfillment partners aren’t exactly cheap. But compared to all the costs of running a warehouse, you’re likely to save a bundle. In handling your own fulfillment, you’ll have to lease a warehouse, purchase equipment and supplies, hire warehouse staff, invest in warehouse management software, and pay utilities. Companies that offer fulfillment services handle all this and more, so you don’t have to.
Sometimes sales are slow, and other times you can’t ship product fast enough. This is especially true during the holiday peak season, when most merchants experience greatly increased volumes. With your own warehouse, your expenses are fixed. You’ll be paying the same all year round, even during slower times when your revenue is lower and might not cover those expenses. An order fulfillment provider gives you the ability to be flexible. You’ll pay less in storage and fulfillment fees during the off-season, and pay more only when your inventory levels and order volume increase enough to justify the added expense.
You want your business to grow, but nobody likes growing pains. If you’re running your own warehouse, it could be difficult to scale. You might run out of warehouse space or find yourself short-staffed. It simply might be too expensive to scale up your operations quickly enough. With a fulfillment partner, you won’t have to worry. If you suddenly need to double the amount stock to cover a spike in orders, your provider will have the space, staff, resources, and expertise to handle it.
Is 2020 Your Year to Take on a Fulfillment Partner?
These are just a few of the ways a quality fulfillment company can help you. There are many more. Because they ship high volumes, fulfillment companies develop relationships with shipping carriers that allow them to negotiate better rates. If they have multiple fulfillment centers, you can split your inventory between them so you never have to ship over extremely long distances. Finally, these providers are logistics experts. They can help you find the ideal fulfillment solution for your specific situation.
If you’re shipping 1,000 or more orders per month, it might be time to make the jump to an order fulfillment partner. With fulfillment centers on the East and West coast, as well as in the Netherlands and South Korea, Simple Global is positioned to help you expand your reach both within the U.S. and globally. Contact us today to see how we can help. We’ll be happy to help you decide if 2020 is your year to move to an order fulfillment company.