The benefits of outsourcing (e-fulfilment)

Instant gratification is the new norm when buying on-line.

Consumers expect their orders to be delivered quicker than the postman can fill his van so hanging around at the sales processing end is not going to inspire repeat business, and may very well result in abandonment of their shopping cart mid-transaction if your estimated delivery time is too long (69.87% shopping cart abandon rate according to Baymard Institute findings). With the pressure this puts on the retailer it’s little wonder the demand for outsourcing fulfilment companies has never been higher.

First off what is a fulfilment partner?

This is a company employed to store your stock, process your orders, personalise your merchandise and print, then pick, pack and despatch your orders and finally, send critical data and reporting back to your systems.

What is the key benefit of outsourcing your fulfilment?

Fundamentally, it frees you up to spend your time growing your business, just like you are an expert in your field, your fulfilment partner is an expert in theirs. 

When asked honestly how much does it cost to keep fulfilment in-house many businesses think it’s minimal. Really is that the case? Consider the costs of storage, staffing, insurance, materials, couriers and not to mention your time. Your fulfilment partner has the advantage of scale and resource on their side and has preferred couriers at special rates, material suppliers discounted and staff on-site already. Your fulfilment partner will have negotiated favourable courier rates based on their output, which pools their bigger customers and smaller ones together. 

Reverse fulfilment

Your fulfilment partner will be able to deal with tricky time consuming returns which although are unfortunate in business, are also inevitable. Whether its a single return from a consumer or a time-consuming bulk return, or a recycling programme, your fulfilment partner will reverse manage the process ensuring your end user encounters the bare minimum of fuss with their return, thus improving their customer experience. 

For you, the returned stock will be inventoried and returned to stock (after being checked) or returned to you if it is damaged.

The flexiblilty outsourcing provides cannot be under estimated. Are you expecting seasonal surges and drop off? When initially negotiating with a potential fulfilment partner it is important that you discuss the flexibility of your actual physical space. It is not only Christmas that provides surges in trade, new fashions and trends can effect your sales dramatically. If you are managing your own fulfilment the cost and time consumption are simply not realistic, it won’t be too long until all hands are on deck wielding brown tape and packing crates letting the rest of your business idle.

So how does e-fulfilment work?

The infographic below is a crude interpretation of how the process works:

Your fulfilment partner will manage your stock levels and send reports to you allowing you to minimise the chances of your goods ever being ‘out of stock’. With managed inventory and stock inventory controls you will be able to access all your data via a hub, thus allowing you to monitor your sales processing in real time remotely.

Another key benefit of outsourcing is that it allows you to grow your business without growing your operation. Whether your company is small, SMB or a large national or international the benefits of outsourcing are numerous.

Small business – allows for expansion, saves money, saves time to allow staff to apply their expertise in the correct area of the business.

SMB – allows time and money for growth, cheaper courier/postal rates, track large number of sales processed easily, returns management.

Large national – large number of sales process/order visibility, favourable courier/postal rates, new stock lines added easily, operations and customer support handling.

International – translation services, international customs and duty expertise, local returns centres, discounted international courier/postal rates.

What about multi-channel fulfilment?

What about if I have my own web shop, a web shop on ebay and another on Amazon, how can I be sure not to sell sold stock by accident?

Your fulfilment partner will have IT software in place to manage multi-channel fulfilment enabling you to keep track of orders, inventory and what’s selling where and when. From this information not only will you be able to be sure you are not selling goods you don’t have, but you will also be able to see which avenues/platforms are working best for you. This in turn will help you streamline your customer communications and marketing.

The time you would otherwise spend trying to manage multi-channel platforms (which I cannot emphasise enough) can be spent on growing your market share, introducing new product lines and streamlining your operation.

Outsourcing fulfilment summary

  • Time saving – allows you to focus on growing your business.

  • Allows growth of business without growth of operation.

  • Cost saving (not just in time) – Size does matter: bulk buying power.

  • Flexibility – seasonal surges & drop off. Add new product lines quickly.

  • Expertise – did you set out to be a warehouse manager? Leave it to those that did

  • Customer satisfaction – Quick & efficient sales processing (out) as well as reverse fulfilment (in).