outsourcing order fulfilment

If you run an online business, outsourcing order fulfillment is a decision you’ll need to make at some point.

You already know how important it is that your customers get what they ordered on time and error free. 

So when your business gets to a point where the picking and packing of orders is taking up too much of your time, you'll want to start considering outsourcing the storage and order fulfilment service.

In this article, we’re going to discuss the benefits and the drawbacks of outsourcing order fulfilment. 

Incidentally, if you are thinking of outsourcing your order fulfilment for the very first time, then have a quick read of our blog post Outsourcing Fulfilment: Avoid the 6 Most Common Mistakes

Customers want great products AND service

In a recent study by Google where they looked at the major influences affecting online buyers the second most influential factor was free shipping.

And within the top 10 influences were speed of service and a positive previous buying experience.

So order fulfilment is a key factor when customers are thinking of buying from you, although they may not use those words!

And even more importantly, buying from a company that has already given them great service significantly affects their decision making.

The world is getting used to Amazon

One of the reasons Amazon have been so successful is due to their excellent and affordable fulfilment service.  Consumers would not buy as often as they do from Amazon if they didn’t believe and experience a speedy service and error free.

Sure, low prices are a major factor but these days there are loads of sites offering similar low prices but they’re not as trusted as Amazon.

Amazon have nailed it. And the challenge for the online seller is to have at least as good a solution for your business so that when you outsource your fulfilment, your customer receive a fantastic service….just as they were expecting to.

Outsource or not?

Many online sellers with ver low order volumes do their own fulfilment and this makes sense because you're keeping your costs low.

You're also getting to understand what your business needs for a fulfilment company when the time comes to outsource.

For example, do you really need bespoke outer packaging fo your orders?  Or can your products be made into kits ahead of an order to save time when picking?

The decision to outsource is based on two factors:

1. Can your business afford the costs of outsourcing?

2. Will the time you free up by outsourcing your order fulfilment allow you to grow your sales?

If the answer to BOTH is yes then you should begin searching for a suitable fulfilment company that can provide you with an affordable and scaleable service.

Alternatively, you may prefer to keep everything under one roof and handle your own fulfilment.

Sure this will require investment in staff, leasing a warehouse, capital assets like lifting equipment and heavy duty racking but if your business can afford not just the set up costs but on-going overheads then as your order volumes increase your cost per order will lower.

Where to find a suitable fulfilment company

The bottom line here is to make sure you find a company that will provide your customers with an excellent experience.  Obviously at an affordable rate.

But do your research!  Don’t allow the sales people from these fulfilment companies just say yet to everything you ask.  Sales people will not be fulfilling your orders!

To keep your costs low, choose a fulfilment company that is located in the country where most of your customers live.  Shipping costs are a large proportion of fulfilment fees so using localised postal or courier networks will keep your delivery costs low.

Make sure to work with a fulfilment company that focusses on your size of business.

You never want to be the largest client nor the smallest. So ask the right questions to be confident that the fulfilment company currently serves clients similar to your size .

Check their Google reviews or other reputable review sites. You need to know that their customers are happy and that the fulfilment service is reliable.

What about my order volumes?

Be aware, that most fulfilment companies will not deal with start ups or online sellers with low order volumes.

This is for two reasons:

1. They are reluctant to offer credit for small businesses

2. Their fulfilment operation is only efficient when it has lots of orders being processed.

There are some companies that do offer excellent fulfilment services for start ups and low volume sellers.  One is Amazon FBA.  This is the order fulfilment service offered to sellers whether they sell on the Amazon marketplace or not. 

The service is excellent, keenly priced and is easy to use.  Just sign up online, send them your products and hook up your website so orders are automatically passed to them after payment.

Of course, another company is myWarehouse (ahem). We’re very similar to Amazon with regard to ease of use, pricing and no minimum volume requirements…but we don’t send out orders in Amazon branded boxes or compete with our clients!

So outsourcing the picking and packing of your orders can free you up to spend more time on growing your business.

But you can only grow an online business with happy customers so choosing the right fulfilment partner is essential for long term business success.

Or you could scale up your own operation and do your own order fulfilment.  It isn’t difficult to do. Just make sure you hire good people and have access to specific fulfilment software rather than standard warehouse management systems (they’re too generic to be of any use).