All companies tend to have all the services they need in-house. Sure, qualities of service and of the end-product are always of the utmost importance as those are the factors that keep your clients coming back to you. And all of us want those returning customers since they are, essentially the backbone of our revenue. But, is such an approach always feasible? Let’s take a look at fulfillment services and how outsourcing it might impact your business.

So, you have an e-shop, bidding platform, product shipping company. Online payment is available, your sales managers are geared towards generating revenue and your IT team makes the system running as smooth as Michael Jackson’s moonwalk. The orders just keep coming in and you see the figures rising and…80% of your revenue is missing?! Why? Well, do you operate a warehouse? Yes? Then you have staff running stock monitoring, packaging, maintenance…let’s not forget you have to pay the transport company to deliver your goods and to collect payment if you have COD available… So, let’s some all those expenses and – there’s your missing revenue! So, have to save it?

We’re witnessing the expansion on web-based shops and business platforms, that slowly take the point from their offline counterparts. This means that fulfillment services are playing a vital role in your brand’s management, delivering your message to your clients as well as maintaining your quality standards. Running in-house fulfillment services can be expensive.

What are these are the basic expenses you need to cover when you run in-house fulfillment services?

For running in-house fulfillment you’ll need to cover these expenses:

  • Warehouse space

  • Staff

  • Maintenance

  • Packaging and Letter shopping

  • Cash pick-ups and administration

  • IT support

  • Logistics and freight expenses

Once all those are summed up, running those services in-house can take a good bite out of your monthly income.

OK, we’ve made a point as to why fulfillment services are costly. But, if this is the situation, how will outsourcing such services improve the situation?

 

Why fulfillment outsourcing can boost your business?

There are 5 reasons why 3rd party fulfillment partner can boost your business:

  1. Experience
  2. Staff
  3. Facilities and operating costs
  4. Logistics
  5. Responsibility
  1. Experience

Above all, companies working in the fulfillment industry concentrate on just that – fulfillment. Unlike you, they do not have to worry if their graphic designer turned in the latest packaging artwork that you need, if all the client’s contracts have been archived properly, if your office’s internet connections are down… they are focusing only on delivering your goods as fast and efficiently as possible, regardless of other obstacles. They employ people that are experts in providing the necessary paperwork, quality packers, freight experts… They control the process from beginning ‘till end, and they do it every day.

  1. Staff

Hiring people to support your in-house fulfillment services can be a tedious task – shuffling through CVs, holding interviews, providing salaries and building a team means you have to dedicate yourself to it. This costs, not only money, but time as well. And that time could’ve been used in developing existing services; finding new clients; expanding the market share…you get the idea.

  1. Facilities & Operating costs

Fulfillment providers have their own warehouses – in fact, many of them. They have warehouse managers, stock monitors, IT experts, maintenance crews, packers…all the people you would have to find, hire and pay. Also, you are not their only client – you will be part of their network which means you will split the costs of their services with all the other companies your fulfillment provider services. To put things into perspective, at a fraction of the cost you would have to pay for in-house fulfillment services, you will get – facilities, staff & support.

  1. Logistics

All of us hate dealing with logistics companies – they are late, they are early, they do not understand your deadlines, they ask you to follow theirs… except if you’re a fulfillment company. Fulfillment companies are the bread and butter to any logistics provider – huge shipments, international deliveries, and cross-border mailings – logistics heaven! This means that fulfillment companies have better relationships with transport providers, which gives them extended leverage in control the quality and timeline of deliveries. Again, at an fraction of the original cost.

  1. Responsibility

At the end of the day, this is what it all comes down to – taking the responsibility of delivering your product to its end-user. Having a quality fulfillment provider takes that burden of your shoulders. With just a few clicks, you can track your shipment, monitor stock levels, check your earnings and control the production process. Without having to ever leave your office.

To summarize, outsourcing your fulfillment needs can lead to increased revenue, better quality control, workflow monitoring and increased response rates. Not bad for a day’s work!