When Should You Outsource Ecommerce Fulfillment?
Ecommerce fulfillment is part and parcel (no pun intended) of ecommerce. In other words, nearly every ecommerce venture will use a fulfillment center to ensure their orders get to customers as quickly as possible. And that last point is key – even the smaller ecommerce ventures are increasingly having to deal with customers that have simply come to expect things like next-day and same-day delivery as standard.
However, not all ecommerce ventures use a fulfillment service. Specifically, it is the very smallest ones, the ones that have just begun, that do not yet have the resources for effective order fulfillment and all the warehousing and delivery services this entails. There is something of a grace period here, as it is expected that small ecommerce sites will offer something unique, but not something that is going to be delivered as quickly as an order with Amazon.
However, growth is the goal and there will come a point – pretty early on – when outsourcing fulfillment begins to become necessary. Nevertheless, while it is generally accepted that that point will come somewhere along the path of growth, many smaller ecommerce ventures are unsure about precisely when to outsource fulfillment. Luckily, there are some clear indicators that it is time to do so and the companies that neglect this step-up are in danger of going under.
A Word About B2B
For B2B businesses – i.e., those supplying goods to other businesses – the size of the orders usually necessitates outsourced order fulfillment. Utah-based Olympic Eyewear, bulk sunglasses distributors, say that orders are typically large and regular and require transport from manufacturers to large storage centers (warehouses). It simply isn’t possible to manage such an operation personally and so, right from the beginning, B2B needs to use advanced warehousing and delivery services. It is only the smallest B2C companies that have this initial period of handling it themselves.
Tips for Deciding When to Outsource
So, when should you outsource order fulfillment in order to meet your company’s needs and ultimately help it grow? Here follows some indications that the time is right:
You Can Afford It
Being able to afford outsourcing is not just a matter of noting your profits and expanding once they go over a certain threshold. Far more important than this is cash flow. Outsourcing fulfillment is going to involve regular costs, and so you need to make sure that these can be met, month on month and with no delays in between. This means you need to project profits as well as note what they are now, and you need to always have the sufficient capital available to you, not just at certain points of the month. This is because ecommerce fulfillment will be required as and when goods are ordered.
In-House Resources Become Inadequate
A clear sign that it is time to outsource fulfillment is that your in-house resources become inadequate. This can happen for assorted reasons – all of which also happen to be indicators of growth. Are you, for the first time, shipping products abroad, for example? Has your order load meant that you have run out of storage space? All of this indicates that it is time to outsource – and that your business is growing as well.
You Have Multiple Channels
A multi-channel sales approach is a terrific way for small ecommerce ventures to reach a larger customer base and sell more products. When orders are coming in from multiple different channels, it is clear that you are seeing success within distinct customer bases, so it’s time to outsource.
Ultimately, growth in ecommerce is all about jumping at the right time.
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