I have always been a huge proponent of outsourcing ecommerce order fulfillment, focus on what you’re good at and let the experts focus on what they are good at! I am pretty sure you didn’t get into eCommerce to spend your time on the idiosyncrasies of logistics and order fulfilment. There are so many facets to this side of the business that you need to take a hard look. Should you manage this side of the business on your own or work with a partner and outsource order fulfillment.
By choosing to outsource order fulfillment you can reduce redundant tasks, save money through economies of scale and improve service and overall customer experience.
We interviewed ecommerce logistics expert Jason Chan, VP of Sales with Rakuten Super Logistics specifically on outsourcing ecommerce order fulfillment and gleaned some great insights into the business of logistics and things you need to consider when looking at outsourcing as an option.
Here are some things to consider:
Reduce Shipping Costs
One of the biggest expenses for online retailers is shipping costs, and because rates tend to be driven by overall order volume, an ecommerce order fulfilment service can get you access to better rates. This allows you to take advantage of the economies of scale through the shipping volumes of multiple warehouses and the collective shipping volumes as well as buying powers associated with packing and shipping materials.
Faster Shipping & Delivery
By being able to access more warehousing locations you can not only reduce the overall shipping costs, but also provide expedited shipping and delivery. Amazon has created the competitive advantage by having same day delivery in multiple locations throughout their network, this is something that smaller businesses can only think about competing with if you have outsourced fulfillment and logistics. Jason covers this in great detail in the show, so make sure you have a listen.
Lower Operating Costs
When you are able to outsource ecommerce order fulfillment you are able to reduce your operating costs. This is because you are able to offset some of the expenses associated with warehouses from rent to staff. Obviously you have to pay these costs to your fulfillment service provider, however once again you are able to take advantage of the existing infrastructure.
Better Supply Chain Management
You are in a far better position to take advantage of technological advancements and operate your entire supply chain at a far superior and functional level when you are utilizing the resources of a third party eCommerce fulfillment service. With the advantage of being able to simply tie into these advanced operations with seamless integrations so you and your team can still see everything you need in real time. Make sure you consider this part as an integral component, and ensure that you utilize a strong development service, (shameless plug) like ours, to ensure seamless integration is set up and functioning at maximum capacity.
Improved Customer Experience
When you are able to take advantage of having multiple warehouse locations you are also able to facilitate faster delivery times and reduced shipping costs, the sum of these parts if done correctly equates to an improved customer experience.
When outsourcing ecommerce order fulfillment, it is imperative that you find the right fit for your organization both now and in the future. Make sure you consider the existing infrastructure of your outsourced fulfillment partner and make sure they will be able to meet the growth trajectories of your business. This means that they too are growing at the exponential rate that you are planning to grow at. The worst thing is that you either partner with an operation that is too big or does not treat your business with the care you want to treat your customers with, but they also need to have infrastructure in place that will scale and grow with your business accordingly.
Is your eCommerce site ready and capable of integrations needed to outsource ecommerce order fulfillment?
This is perhaps the most integral part of realizing the full potential of outsourcing. If done correctly, the entire fulfillment process can appear to be seamless to the customers and automated to the retailer. Essentially letting the ecommerce business itself focus on sales and marketing efforts to grow your business.
As I mentioned in the beginning, focus on what you are good at and let the experts do the same, providing you with countless opportunities to grow exponentially through the utilization of technology as an accelerator and valued partnerships to provide expertise in areas you may not need to focus efforts.
You definitely want to spend your time on these resources as well:
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