Could Your Business Benefit From Using a Fulfillment Center?




  • — August 14, 2018

    Could Your Business Benefit From Using a Fulfillment Center?

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    A recent poll showed one thing many small business owners have in common.

    Around six months into a new venture, they realize that growing a successful business isn’t as easy as they thought:

    Even with consistent sales, scaling the business isn’t as straightforward as it seemed in the business plan.

    Faced with this, many of them resort to one of two business strategies.

    They may try to generate more sales by lowering prices or starting a loyalty program for their customers. Other tactics include offering their products as bundles or even the old strategy of making the prices end in 9 (which actually works).

    Who hasn’t seen the frequency of prices like $ 8.99?

    Others leave the price as is, and focus on reducing their business expenses. With the ebb and flow of cash in a new business, this can often be a tricky strategy to implement. They use methods ranging from easy reducing the energy bill by turning off equipment, to more drastic measures like firing staff.

    The above methods work…. to an extent.

    But one tactic that businesses rarely use is outsourcing. Small business owners worry about divesting control, and whether or not they can even afford to outsource. However, outsourcing is one of the few ways small businesses can compete with larger retailers.

    A Day in The Life

    A typical eCommerce business owner will spend part of their day worrying about the safety of their inventory in a lockup across town. At the same time, they are looking for more favorable shipping rates, while also fielding customer calls. In the same breath, they’re trying to make sure the new picker is picking and packing the right SKUs.

    If this scenario seems familiar, don’t you think it’s time you considered handing off some of these roles to others?

    Juggling all of tasks yourself is costing you more than you realize, and detracting from the goal of selling products and fostering business growth.

    To illustrate:

    Let’s examine the actual cost of a ‘small’ picking error.

    The High Cost of Errors

    Let’s say a picker picks the wrong item and sends it off to a customer. If you include return labels in your packages and the customer sends it back, you’ve just paid for a merry jaunt. For a parcel! If the customer has to pay for sending it back, that’s a greater incentive for them to leave you a bad review.

    A ‘small’ picking error can lead to customers eventually avoiding your brand and shopping with your competition. In the end, you’ll incur shipping expenses in addition to marketing costs to win new customers. The cost has become anything but ‘small’.

    Why Outsource to an Order Fulfillment Company?

    Outsourcing can help businesses reduce the expenses incurred from returns and refunds and provides access to:

    • Dedicated Warehousing – As your business grows and you carry a wider range of SKUs, your storage needs will change. Storing and processing inventory from your garage or store soon becomes inconvenient. Retaining an order fulfillment company eliminates the stress associated with this scenario.

    • Better Inventory Management – Managing an increase in inventory can become tricky if you don’t have the latest technology at your disposal. A professional order fulfillment company will have integrated software that allows you keep tabs on stock levels, and can even process returns without your input.

    • Experienced Pick and Pack Specialists – Avoiding costly picking errors and ensuring orders are delivered on time, will depend on the experience of the picking staff. While it is possible to invest in training or hire in-house specialists, it can become yet another expense. You can get around this by using the staff at a fulfillment center –they take full responsibility for picking, packing and delivering the product.

    • Prompt Delivery – To compete with larger retailers and their ‘unlimited’ budgets, small businesses must find ways to create competitive advantage. One element of the shopping process that’s highly valued in the eyes of a customer is prompt delivery. When a business can guarantee this, it can make the difference between customers making a one-off purchase and becoming a customer for life.

    Outsourcing can improve your company’s bottom line:

    Whether it’s by reducing the number of returns (and refunds) or by freeing up time to focus on business growth. No matter how you look at it, using an order fulfillment company simply makes fiscal sense.

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    Author: Christopher Moore

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