Business consultants are quick to point out the importance of order fulfillment. In fact, it’s the most important part of customer service. Without an outstanding delivery system, customers will choose your competition, even if your pricing is better.
With that in mind, the decision to outsource order fulfillment can become the impetus to bring in additional customers, and that translates into more sales and of course higher profits. And… working with a third party logistics provider can provide you and your staff with more time to concentrate on other areas of your business. Indeed, outsourcing could even save you money as a fulfillment firm can streamline the process.
The decision, however, is not as easy as 1-2-3. There are a variety of things that you should consider before you decide whether or not to outsource your order fulfillment.
Cost
Cost is a major consideration when it comes to deciding whether or not to make the move to outsourcing. And it’s not just about the money. How much time will you be saving? And what about the cost of labor?
And then there’s the cost of shipping itself. Delivery services such as UPS and FedEx and even the U.S. Mail offer volume discounts, so while you might have to pay $10 per package (for example), a fulfillment company’s rate – since it deals in volume – may only be $8 per package. Part of that lower rate will be passed on to you.
Necessity
Determining whether or not outsourcing is necessary at this time in your company’s growth is crucial. And yes, there is some risk involved in putting this part of your operation in the hands of another party.
However, you can ease that thought by conducting due diligence on the fulfillment agencies you are considering. Check on their records with the Better Business Bureau and go online to read reviews, or ask the potential agency for references. You don’t have to leave your company’s fulfillment operation in question if you use the tools available to you to investigate or explore what’s out there. Fulfillment agencies are companies just like yours, and the reputable ones want your business and won’t hesitate to answer your questions and provide whatever information you need on how the process works, as well as their reputation in the industry.
One more thing… the biggest indicator that it’s time to outsource is when you can no longer grow with your current setup. This is when it might be worth looking into other options to get your product out to your customers on time and in great shape, especially when it will mean the continued growth of your company.
Other Things to Consider
Another reason to consider outsourcing your delivery system is if your business sees a lot of seasonal spikes and variations. For example, holiday time may mean a temporary increase in orders. No worries. Your fulfillment agency will handle that and you won’t have to hire more staff and pay more benefits or overtime.
Outsourcing the fulfillment aspect of your company’s operation is indeed a major decision. The bottom line is that it should enable growth for your company, cost savings, and a little less for you to worry about.