Is it a good idea to outsource your order fulfillment? Finding the right partner to trust with your fulfillment is a challenge facing many e-commerce entrepreneurs. Most e-commerce businesses start your garage or living room, and it takes a while before you transition to finding a need for warehousing and fulfillment services.
Studying the aspects of fulfillment centers and services depends on your target market and what you’re selling. There are pros and cons involved in accessing different markets and choosing the right fulfillment center to handle the job.
Fulfillment centers allow you to remove yourself from a large portion of the business, giving you time to focus on other strategies to grow revenue. You also decrease your shipping costs with fulfillment centers, bringing down the costs for your customers.
With a fulfillment center, you have experts handling your warehousing, packing, shipping, and even your customer returns. However, not all fulfillment centers follow the same pricing model. There could be extensive charges on warehousing your goods if you’re selling large products.
Let’s unpack how to outsource your order fulfillment.
Options for Outsourcing Your Shipping
There are three options available to you that can help you manage your shipping.
Dropshipping – Using dropshipping companies, you don’t have to worry about the hassles of renting warehouse space or packing and shipping your orders. The drop shipper takes care of everything for you, including providing your customer with a tracking number on their delivery.
Warehouse Renting – Ecommerce warehousing allows you to store your products in centralized warehouses across the country, and the world. You can use shipping software programs to manage your inventory and customer returns from anywhere in the world with an internet connection.
3PL Companies – These third-party logistics companies manage your entire supply chain, from receiving and processing order to warehousing, packing, and shipping your products to your customers. 3PL is the most expensive option of the three, but it offers you the best value for your money when managing your customer fulfillment.
Tips for Selecting the right Service Provider for Your Ecommerce Business
When selecting the right 3PL partner for your business, you need to spend some time shopping around and comparing pricing between fulfillment centers. During your research, it’s best if you focus on the following services and features of your 3PL service providers offering.
Understanding Your Business Needs – Contact your 3PL providers and ask them about how they handle their processes. Fulfillment centers need to model your customer experience, or your customers will take their business elsewhere.
Develop a Costing Model – As mentioned, a 3PL solution is the most expensive, but the best value. Shop around for quotations from 3PL providers before settling on your shortlist. Remember, the lowest cost does not always equal the best value.
Handling Product Returns – Your fulfillment center should have a strategy and process for handling customer returns. The process should involve contacting you directly with the customer’s concerns and contact information, as well as their order number.
Handling returns is possibly the trickiest part of managing your relationship with your fulfillment center. Make sure you choose a partner that meets your requirements. In most cases, you can manage the customer returns process if you make arrangements with the 3PL provider.
In today’s e-commerce marketplace, outsourcing your fulfillment is standard practice. If you want to reduce your shipping times to your customer, optimize your supply chain, and boost your company’s profits, you need to work with a fulfillment center.
Fulfillment centers may add another line item to your annual expense reports. However, the value they bring to your online business is irreplaceable.