When Does Your Business Need To Outsource A Fulfillment Service?

By Author: Mark Wilson
Total Articles: 3
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Businesses hire fulfillment companies to collect, package and ship customers’ orders on their behalf. When you outsource order fulfillment to another company, all the packaging and shipment is done at the fulfillment company’s premises by its own staff, within its own facilities. You only pay them an agreed upon fee for the service and they take the entire load off your hands.

Many benefits accrue from outsourcing fulfillment services to independent fulfillment houses. For example, you will reduce your overall costs of doing business, ensure timely delivery of orders, and have the freedom to concentrate on more important areas of business while someone else takes care of handling your order deliveries. However, outsourcing fulfillment services is not always beneficial to a business and so you shouldn’t go for it until you are sure that your business will benefit from it.

Before opting to outsource this service you have to put a number of factors into consideration. Perhaps the most important thing to consider is the volume of orders you want the fulfillment service to handle and this of course depends on ...
... the quantity of orders coming from your customers. There is a minimum volume of orders below which outsourcing fulfillment services doesn't make economic sense; if your orders are too few then outsourcing this service can be costlier than servicing the orders on your own. It is for this reason that most fulfillment houses have set a minimum volume of business that they can accept from a client. If your business is therefore still young and orders are still relatively few, you won’t gain much from outsourcing these services. It could be cheaper to have the orders processed by your own staff until you start moving higher volumes.

When thinking about outsourcing, ask yourself whether your staff can handle the entire workload required to get the orders ready and on their way to the customers. It is possible that the products you are selling are very easy to handle even if you are moving high volumes and you can as such comfortably handle all orders in-house. On the other hand, you may be dealing with items that are very demanding to sort, package and ship, and so your staff will be overwhelmed even if the orders aren’t that many in which case outsourcing the service will be the better option.

Another point to consider is whether your products require any special handling or packaging. Most items that people buy online don’t require special handling but there are some items that are quite delicate or toxic and call for extra care in packaging and shipping. If you lack the know-how and resources to handle such items then you are certainly better off delegating the job to a fulfillment service that is adequately equipped for the task.

Finally, you need to think about customer service. Customer service is important regardless of the business you are in but in some businesses you need to be more intimate with your customers. If you feel that a third-party cannot give your customers the level of customer care you desire for them then you may prefer to take care of orders by yourself rather than hire a fulfillment service.

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