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11 Signs It's Time to Outsource Fulfillment
If you're like most eCommerce businesses, you're constantly looking for ways to increase sales and grow your brand. However, as your business grows, some indicators may start popping up, leading you to think that you're in over your head.
Stay calm! It is quite common that it gets more and more difficult to handle order fulfillment operations on your own. The most important thing is, you know when it's time to seek professional help from a 3rd party logistics (3PL) provider to outsource fulfillment operations.
Don't know if it's time? Here are the most common 11 signs to keep an eye out for!
1. You're struggling to keep up with order volume
First of all, congrats on your problem! More orders mean more sales, which is a great win for your business!
However, more orders also mean more fulfillment operations, especially during times like peak season. And if you lack the resources and experience to meet demand, it will lead to a huge setback in the long run.
How would you know that you're struggling to keep up with the increasing order volume? You'll start experiencing:
- Shipping delays,
- Customer complaints about late deliveries,
- Imbalance in stock numbers,Lots of overtime work, and
- Lack of time for BusDev (marketing, product development, etc.),
which are the most prominent signs that your operations need improvement.
So, what should you do? The first step is to take a close look at your operations and see where you can make improvements. If you seem to not have the necessary resources to do so, the next best option would be to outsource your fulfillment operations to a 3PL.
2. You don't have the necessary storage space or equipment
The growth of online shopping and the rise of eCommerce businesses has resulted in a shortage of warehouse and industrial space. Thus, finding adequate storage space is becoming an increasingly difficult problem for eCommerce businesses.
Businesses that are looking for an efficient solution to this problem are turning to fulfillment outsourcing. Since fulfillment outsourcing refers to the practice of hiring a third-party company to handle all aspects of your fulfillment operations—from warehousing to picking and packing to shipping.
Doing so not only frees them from the hassle of finding warehouse space and investing in warehouse vehicles and systems, but it also saves them money, time, and labor force.
3. Labor shortage hit you too
The labor shortage is a huge global problem and it's only getting worse. In the United States alone, there are currently more than 10 million open jobs but not enough people to fill them.
The labor shortage is especially prominent in the warehouse industry where long work shifts, low salaries, and a heavy workload make warehousing even a more undesirable job. That leads to high turnover rates that cause losing know-how and disruption in operations. The lack of workers is not only costly for warehouses but also for the companies that rely on them.
4. You're not able to offer different delivery options
Delivery options are a key factor in determining which eCommerce businesses customers prefer. Same-day delivery, green delivery, and drone delivery are all examples of delivery options that can make your business more preferable to customers.
However, offering these delivery options requires significant operational processes. If you don't have the in-house resources to support these delivery options, the best option would be to outsource your fulfillment operations to a 3PL provider.
Doing so will also provide you with a network of fulfillment locations which means you will be able to deliver orders more quickly and efficiently to your customers in multiple shipping zones.
5. Returns are taking up too much of your time and resources
Return management is one of the biggest challenges facing e-commerce businesses today. That's because returns require a lot of coordination and effort, from processing the return to managing inventory levels and stock control.
According to a recent study, nearly 30% of all online orders are returned, and these returns can cost up to twice as much as a regular order. So, if you're like most online retailers, you're probably spending too much time and money on returns.
Fortunately, most 3PLs don't only tackle parts of your fulfillment processes but the entire fulfillment operation, including return management.
OPLOG offers seamless return management where all you have to do is provide us with your company's return preferences. Then, all left is for you to track and control your returns from a single dashboard while your customers enjoy a seamless return process. 👉 Discover more!
6. You are getting too many customer complaints about late deliveries
For starters, there are 3 components that may be causing late deliveries:
I. Your customers: Truth be told, sometimes customers can blame you for their mistakes. They may have given you wrong or incomplete addresses or may have gone for a short walk right when their orders were to be delivered. In those cases, you have nothing to do.
II. Last-mile delivery logistics: Unfortunately, once you hand over your packages to your carrier company, you have very little control over their destiny. So, if you start experiencing late deliveries because of your carrier company, the best would be to opt for another one.
III. Your fulfillment operation (picking, packing, and shipping): When mishap in one of these stages will have a domino effect on the other two. So, if you waste too much time picking products, chances are you will be late packing and shipping them too.
The main cause for such delays is a lack of labor and resources, which you can easily overcome by outsourcing your fulfillment operation to a 3PL.
7. You're not able to meet customer demand due to insufficient stock management
Stock management is a critical part of keeping your business running smoothly. Because, when you don't do it correctly, there are 2 things that can happen:
I. You lose a sales opportunity because an in-stock product appears out-of-stock (bad for sales)
II: You cancel an order because an out-of-stock product appears in-stock (bad for customer experience, brand reputation, and your marketplace score/authority)
Although both can seriously damage your business, fortunately, there are some simple steps you can take to help keep better track of your inventory and avoid these sorts of problems. Keep reading to learn how.
8. You're wasting time and money on manual order processing
If you're still processing orders manually, you're way behind the times. Not only is manual order processing incredibly time-consuming, but it also causes many major problems, just like the one we just mentioned about insufficient stock management.
The good news is that there are now cutting-edge fulfillment technologies that can help you navigate both time and cost-efficient operations. WMS (Warehouse Management Systems) and other tech-enabled logistics solutions can help you automate your warehouse operations, including order processing, inventory management, and more.
You may find such deployments an expensive investment. Thus, partnering with a 3PL that already uses such technologies will be a more cost-efficient solution for your business.
9. You need help expanding your eCommerce business domestically or globally to new markets
If you're looking to take your eCommerce business to the next level, you'll need to start thinking about expanding into new markets. This can be a daunting task, but with the right strategy in place, it can be immensely successful.
One of the first things you'll need to consider is your fulfillment strategy. Are you able to ship orders quickly and efficiently to your new market? If not, you may need to invest in some new omnichannel fulfillment solutions.
Another thing to think about is your sales strategy. What channels will you use to reach your new customers? Will you sell on existing marketplaces or create your own store? There's no one-size-fits-all answer here, so it's important to carefully consider your options before making a decision.
With careful planning and execution, expanding your eCommerce business into new markets can be a great way to achieve business growth.
Are you looking to expand to new countries but don't know how? With 10+ years of experience in international fulfillment logistics with 10+ warehouses spread across the globe, OPLOG is here to help!
10. It's getting harder to grow your brand due to the burdens of fulfillment
As any entrepreneur knows, growing a brand is no easy task. There are a million things to think about, from marketing to product development to resource allocation and creating new sales channels.
But as brands get bigger, the operational burden of fulfillment grows as well. Managing inventory, coordinating shipping, and the whole fulfillment process on their own can all be costly and time-consuming.
As a result, many brands find it difficult to allocate the resources needed to grow their business while they have to focus on fulfilling orders on time. The good news is that there are ways to overcome these challenges.
By partnering with a fulfillment partner, you can free up the time and money you spend on these tasks and dedicate them to growing and flourishing your business.
11. You're having a hard time keeping up with in-house costs
When you run your fulfillment operations in-house, there are many investments and costs that you have to consider:
Cost items of running your own fulfillment warehouse:
- Labor (salary+other compensations)
- Return management
- Warehouse vehicles (forklifts, etc.)
- Racking/shelving systems
- Utility bills
- Repair, and maintenance
Cost items of outsourcing your fulfillment warehouse:
- Storage fee
- Order fulfillment fee
- Supply fee
- Return management fee
- Shipping fee
At OPLOG, we value transparency and simplicity. That's why we created a pay-per-use model where you only have to pay for what you use, nothing more! Plus, with our custom-made fulfillment solutions, you can always elevate your branding and customer experience.
Have you started experiencing any of these signs? 👉 Discover how a professional 3PL can help you get rid of them!
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