When to Make the Switch From In-House to Outsourced Fulfilment?

If you’re running a successful eCommerce business you probably have big plans for future growth and diversification. But, as your business does grow, you’ll at some point find yourself facing an important question; when should you switch from in-house to outsourced fulfilment? Keep reading and the 3PL team will provide you with the answer!

Why is fulfilment important?

Is fulfilment really that important for your eCommerce business?

The answer is an emphatic yes.

Today’s consumers have very high expectations when it comes to fulfilment.

When they place an order online, they expect it to arrive quickly, well packaged and in perfect condition.

If your fulfilment process fails to meet those criteria, you’ll quickly lose your customers to competitors who are nailing their fulfilment. It’s vital that your fulfilment process is well-run, efficient and fault free.

What’s the difference between in-house and outsourced fulfilment?

So now you know why you should be taking fulfilment seriously, let’s quickly define the difference between in-house and outsourced fulfilment.

In-house fulfilment

In-house fulfilment, as the name suggests, refers to the process of processing your orders yourself in-house without the assistance of a third party.

So, you’ll be taking care of everything from managing your inventory, picking and packing orders and arranging delivery yourself.

Whilst carrying out your fulfilment in-house provides you with complete control over the entire process, it can be difficult to maintain as your business gets bigger.

Outsourced fulfilment

Outsourced fulfilment refers to the process of getting a third-party to carry out either all, or part, of your fulfilment process.

These third-party fulfilment providers are called 3PLs and they are specialists in fulfilment at larger scales.

They can typically take care of the entire fulfilment process, from storing and managing inventory, to taking orders, picking and packing, and organising shipping.

Guide – given what’s at stake for your business, it’s important that you select the right outsourced fulfilment partner. Read our complete guide to doing so here.

When eCommerce businesses should switch to outsourced fulfilment

Now that we’ve seen what outsourced fulfilment actually is, the next question to answer is – when is the right time to switch to outsourced fulfilment?

Your fulfilment is impinging on your other business operations

If you find that carrying out your fulfilment in-house is taking up more and more time, and you’ve got less time to carry out other essential tasks like accounting, marketing and sales, it’s time to outsource it.

It’s unlikely you set up your business because you wanted to spend all day packing orders and dealing with the minute details of inventory management and shipping. So, by outsourcing your fulfilment to a company like 3PL, you’ll free up time to focus on the tasks that you’re really passionate about such as product development and marketing.

You’re missing your target delivery times

It’s a fantastic feeling to have the orders pouring in. But, it’s less fantastic when you have angry customers on the phone asking why it’s taking so long to receive their order.

As we said at the outset of this article, fulfilment is an incredibly important part of the customer experience. If you are consistently missing your target delivery times, your customers will quickly switch to a competitor who can fulfil orders quickly.

By outsourcing your fulfilment to a 3PL, you’ll be able to vastly improve your customers’ fulfilment experience and not only retain customers, but gain new ones.

3PLs are geared up for managing fulfilment at scale, with dedicated warehousing facilities, teams of people to process orders and even dedicated fulfilment software to ensure that your orders are always delivered on time.

You don’t have enough warehousing space

Even if your products are relatively small, compact items (such as pieces of clothing), if you grow large enough you’re bound to run out of storage space.

The costs associated with leasing, outfitting and running a dedicated warehouse can be considerable. And, these costs only increase as you require more space.

To avoid this, outsource your fulfilment to a 3PL.

3PLs usually carry out fulfilment on behalf of multiple clients and as such are able to benefit from economies of scale. The costs associated with warehousing are thus spread out across multiple stakeholders.

3PLs are also generally very savvy at maximising the value from their warehousing space and will be able to ensure that your inventory is stored in a safe, secure way.

You don’t have access to dedicated fulfilment technology

If you want to gain a competitive advantage, one of the key things you can do is to invest in dedicated fulfilment technology.

But managing and developing a dedicated fulfilment technology can be very expensive. In fact, it can be too expensive for many smaller eCommerce businesses.

The solution is to outsource your fulfilment to a 3PL which has its own fulfilment tech. Companies like 3PL offer platforms which help to automate your order fulfilment process – making it quicker, more efficient and saving you time and money as well as increasing customer satisfaction.

The benefits of having visibility over your entire inventory, orders, fulfilment and shipping in a single place online really shouldn’t be underestimated.

You want to access new markets

Fulfilment can be challenging at the best of times. But, factor in international orders and you can be in for a real headache.

The idea of having to deal with varying customs, taxes and shipping requirements puts many eCommerce businesses off the idea of selling their products to overseas customers.

But, by outsourcing your fulfilment to a 3PL, you’ll have a fulfilment partner who will be able to take care of all of the annoying, frustrating details of international shipping.

Freed from the hassles of dealing with the minutiae of international shipping, you’ll be able to focus on tapping into these new markets and significantly growing your customer base.

Outsource your fulfilment to 3PL today

It’s clear. Switching your fulfilment to a 3PL can save you money, increase your revenue and greatly improve your customers’ satisfaction.

If you feel like your business is facing the challenges outlined above, and that your in-house fulfilment is no longer up to scratch, speak to the experts today.

Find out more about 3PL’s fulfilment services now

For more eCommerce fulfilment, shipping and marketing advice, read the 3PL blog…

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