Most companies begin to fulfill their own orders, while some eventually use a third-party logistics solution as they grow. Thing is, sometimes it’s difficult to know when to switch, especially when you build your own company from the ground up with nothing but personal savings.
Businesses with various sizes can get benefit by using warehousing and fulfillment services. There are variety of companies that offer warehousing and fulfillment services, some of which specialize in smaller or larger-scale operations
However, there are clear signs that it’s time to switch to outsourced fulfillment.
Cyclical or uneven sales
If the number of orders you process fluctuates throughout the year, it’s probably difficult for you to handle to running and staffing your own warehouse. A logistics company will be able to adapt to your needs.
Besides, unexpected spikes in sales can interfere your delivery promise. An expert can handle times when your daily order volume peaks so you can focus on your delivery consistency and make efficient experience every time.
You’re too busy
If you’re too busy dealing with order fulfillment and thus distract your growth focus, it’s probably time to outsourcing it. As a business owner, you need to be able to devote time to sales and marketing, expanding to other e-commerce platforms, sourcing new products and ideas, and improving your business for the long term.
Lack of infrastructure
If you’re expanding your business geographically, you may outgrow your current infrastructure before you can adapt. Shipping to locations across the country or even the world comes with logistical challenges that increase expenses and shipping times. This can inhibit large-scale growth.
When you outsource to a global fulfillment partner, they’ll be better equipped to serve a growing customer base, leveraging multiple locations, and optimizing fulfillment accordingly.
Third-party warehousing and fulfillment isn’t right for everyone, but if you find yourself in one of these situations, it might be time to start calling around and chatting with logistics companies.
The clear advantage of using a third-party logistics (3PL) company to outsources fulfillment is that it saves you from having to do the work yourself. But there is a deeper advantage, outsourcing warehousing and fulfillment can have a meaningful impact on your business’s growth.
Avoid long-term leases
Many logistic companies offer adjustable pricing. This means they’ll be able to adjust to your needs and costs accordingly as you grow or go through slow period. Renting your own warehouse mostly requires more of a commitment.
Bring on the experts
When you hire an outsourced fulfillment services provider, you’re not only get a warehouse space, but also people who will be responsible for running the fulfillment center. When you fulfill and ship your won orders, you’ll likely need to hire your staff as you expand. Managing staff takes time. If your business is still constantly changes, you may be wary of promising someone a job. Instead, you can outsource the work to a logistics company and let them be responsible for finding and hiring good people.
Each 3PL has a whole team of logistics experts and support staff who will always be there to help you along the way. They maintain all of the labor needed for receiving, inventory management, and order processing and shipping, giving you an advance agility you might not achieve easily on your own.
Use your time to optimize
It is very likely that you don’t start a business just because you are good at packing boxes. Your time is better used to manage and optimize your company, not stuck in the logistics of order fulfillment. When you let someone else handle your logistical details, you can focus on the things that have a greater impact on your bottom line.
Be more agile
Although doing it yourself is mostly free, it can actually cost you in the long run. Consumers mostly expect faster shipping times, doing it in-house less likely meet their expectations and deliver a bad customer experience. Partnering with a 3PL for fulfillment services can benefit you from their effectiveness and buying power leverage on packaging and shipping costs. Some even update you with a real-time stock level and status so you can be proactive.
This extra time can give you and your team to test new strategies, inventory management techniques, and other strategies to achieve rapid growth without worrying about back-end logistics or hiring backlogs.