Outsourcing fulfilment: A mini guide for e-commerce retailers
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In this article, we break down outsourcing fulfilment, when you should consider it and how you can maximise its time-saving benefits.
Fulfilment is one of the trickiest parts of running an e-commerce business. While online retailers can manage by themselves at the beginning, keeping order fulfilment in-house can quickly prove to be too time-consuming as additional orders start to come in.
At this point, it might make sense to consider letting go of certain tasks to focus on other aspects of growing your retail business. But first, let’s break down outsourcing fulfilment, when you should consider it and how you can maximise its time-saving benefits.
What does outsourcing fulfilment mean?
Outsourcing order fulfilment refers to hiring a third-party logistics (3PL) provider to handle some or all parts of the order fulfilment process. This includes receiving inventory, picking, packing and shipping orders and managing returns, depending on the services offered by the 3PL you choose to work with.
When do you make the switch?
Outsourcing fulfilment comes with many benefits, such as lower shipping costs, faster delivery speeds and an optimised back office, but you need to make sure that it is right for your business. Additionally, it is critical that you make the switch at the right time, or else risk creating bottlenecks and delays.
When your in-house fulfilment strategy is no longer fit for purpose, it is time to consider partnering with an outsourced fulfilment provider. So, what are some signs to look out for?
- When you’re running out of storage space
- When order volumes are becoming overwhelming
- When you’re spending too much time managing a logistics operation instead of scaling your business
- When your logistics infrastructure can no longer support business growth
Maximise the time-saving benefits of outsourcing fulfilment
For fast-scaling e-commerce retailers, time is of the essence. Partnering with the right 3PL for your business can make the fulfilment order process lean and optimised, so it is vital that you ask the right questions at the onset.
To maximise the time-saving benefits of outsourcing fulfilment, retailers should ask their fulfilment partner:
- How remote inventory management will be handled
For e-commerce businesses, speed is key to achieving customer fulfilment. Therefore, it is important to seek out a trusted fulfilment partner that has the necessary fulfilment centre capacity and capabilities to meet your needs. However, retailers must consider how they can remotely manage their stock inventory and communicate with their fulfilment partner.
Can they deliver information on customers’ orders in real-time? Is this information readily available across devices?
A full understanding of how you can remotely manage your stock inventory will not free up your valuable time, it will also allow you to focus on other important tasks such as marketing and enhancing customer service. Additionally, being able to remotely handle inventory can help flag issues and resolve them before they can escalate.
2. How easily their tech and software integrate with your sales channels
Many e-commerce businesses are expanding and diversifying their sales channels as part of scaling. As such, it is key that your fulfilment partner’s tech and software integrates just as easily with your network of sales channels.
Online retailers need to ask potential 3PL partners which ecommerce platform integrations do they support, and even their internet of things (IOT) and application programming interface (API) capabilities. This will make the integration process much more seamless, which in turn, saves retailers more time.
Bottom Line
If you have decided to begin outsourcing fulfilment for your business, you must partner with the right 3PL to make the switch as quick and easy as possible. Asking the right questions at the onset will also enable ecommerce retailers to free up their valuable time and focus on supporting more growth for their retail business.
