6 Reasons to Consider Outsourcing Order Fulfillment for Your E-Commerce Business

6 Reasons to Consider Outsourcing Order Fulfillment for Your E-Commerce Business
by John Carlucci - May 23, 2023

Outsourcing order fulfillment offers numerous advantages beyond merely not having to do the work yourself.  

To run a successful business, you must meet your consumers’ requirements and expectations. Those expectations are high when it comes to order fulfillment. Delayed, missing, or inaccurate shipments are all ways to dissatisfy your consumers, and you don’t want to do this, do you?

Some business owners think that when they outsource fulfillment, they lose control of their business, but this isn’t always true. In fact, you end up gaining when you outsource the services.

To shed more light, below is a list of the top six reasons to outsource order fulfillment for your e-commerce business:

You focus on the core of your business.

While e-commerce fulfillment tasks are crucial to the success of your business, they are not the reason you began your e-commerce firm—you started it to solve a problem.

Unfortunately, these tasks consume an increasing amount of your time as you expand.

After a certain point, you will realize that time is your most valuable resource. Focusing on e-commerce fulfillment rather than sales growth or brand loyalty will prevent you from growing your business.

Smart organizations recognize that only some things can be done in-house and know when to delegate to professionals.

Outsourcing fulfillment to an e-commerce fulfillment company frees up your time that you can spend on branding, product creation, customer service, and other business activities.

Your e-commerce fulfillment partner will handle your inventory, packing, and shipping requirements; this is their area of expertise, not yours.

Outsourcing to a third-party fulfillment expert, such as AMS fulfillment, frees up many employees who would otherwise be dedicated to non-core business tasks such as inventory management and order shipping.

This saves you money as you don’t have to hire these employees and increases productivity as the employees focus on the activities that move the needle.

You reduce your shipping costs.

Many e-commerce business owners shy from outsourcing fulfillment as they perceive it as an additional cost. The truth is that third-party logistics providers often end up saving you money.

To begin with, a fulfillment partner may have warehouses across the country and even internationally. These warehouses ensure that your goods are closer to your buyers. 

This is because the fulfillment service providers balance your inventory across their network of warehouses. This method of inventory distribution can cut shipping expenses by up to 25%.

Furthermore, as high-volume shippers, third-party logistics companies frequently enjoy preferential carrier prices. While it varies per firm, you may save 15% to 35% off listed shipping charges.

Fulfillment companies also have software that allows them to compare shipping rates from different carriers and choose the most cost-effective option for each purchase. This not only saves the company money, but also you.

You can pass these savings to your customers by offering discounted or even free delivery to sweeten the deal and increase sales.

You take advantage of ready infrastructure.

If you’re fulfilling your e-commerce orders, dealing with storage can be a nightmare, whether in your living room, garage, or warehouse.

Furthermore, hiring a storage space entails many e-commerce warehouse management and operational obligations. You’ll need to recruit people, buy storage and security equipment, get insurance, among other things.

Developing your e-commerce fulfillment system necessitates significant monetary commitment and professional knowledge.

When you outsource your e-commerce fulfillment to a 3PL, you gain access to scalable storage space and pay only for what you use.

Furthermore, e-commerce fulfillment firms have a big pool of resources they can assign based on your current order volume. These resources allow you to manage sales variations successfully without worry.

You reduce your operating costs.

While outsourcing fulfillment is expensive, so is self-fulfillment. 

Business owners often don’t pay attention to inventory storage in their fulfillment costing calculations, even though it accounts for 21% of logistical costs. If you have to rent warehouse space, your costs can increase.

You save money by outsourcing fulfillment since you only pay for what you utilize. Third-party logistics businesses often charge for picking, packing, shipping, and storing your items.

Some fulfillment companies offer free storage, so you might not need to pay for storage at all.

Even if you do, you don’t pay rent, utilities, gas for post-office trips, or other running costs connected with self-fulfillment.

You satisfy a larger market.

Whether you receive an order from another state or another nation, you’ll be ready to take your business to the next level with the proper order fulfillment service.

When you self-manage shipping, it can be intimidating to figure out shipping prices and forecast shipping timeframes.

The situation is even worse when shipping your products out of the country. This is because international shipping prices are much more complicated due to the various regulations, currencies, and best practices you must observe.

As a result, many e-commerce business owners restrict their shipping options to the local or regional level.

Outsourcing fulfillment might help you expand your reach and access a larger market. This is because the fulfillment company will be responsible for getting your product to the customer, regardless of their location.

Many fulfillment organizations have the infrastructure to ship and deliver orders to every location. So all you need to do is to let the company know where they need to deliver the product, and it’s up to them to figure out how to do it.

You make your customers happy.

It may seem obvious, but it bears repeating. Shipping that is faster and less expensive has accurate delivery information, a worldwide reach, and leaves you more time to market, and sell your products results in happier customers.

This is your company’s ultimate goal, and outsourcing fulfillment can greatly assist you in achieving it.

You have to hire the right company to get the best services. 

As a rule of thumb, ensure the company has many fulfillment centers in different parts of the country. This way, you are sure that your products will reach the target customers within a short time.

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