Outsourcing has been a crucial element for many companies success stories in the last few decades. The process allows them to develop core competencies while leaving specific systems to third party vendors. The concept is well-loved by retailers and manufacturers, who increasingly choose outsourcing to boost profits and increase customer satisfaction.
Depending on your company’s goals, outsourcing may be the best move. Consider these five advantages that support the decision. Armed with all the information, you can set the course that’s right for your venture.
Pay Less for Shipping
The only way to get lower prices for shipping is to be a high-volume shipper. Since starting businesses can’t do that, they need to outsource, which will allow them to piggyback lower rates from a fulfillment center. With more economical shipping rates in place, product sales tend to rise, so going this route is a savvy way to build volume.
These days, many companies offer free shipping. That means they’re paying very little and including it in the price. If you’re unable to match their offers or have costs that are too pricey for your market, it will cost you in terms of sales.
Speed up Customer Delivery
Even if a small company ships a few products, it won’t give them any tactical advantage. Larger fulfillment centers and warehouse use many carriers to ensure optimal routes are always in place. That lowers expenses, while also making the delivery faster — fast delivery results in more happy customers and even more sales.
The ability to tap into multiple carriers to create beneficial logistical opportunities is what makes third party order fulfillment centers so powerful. You can leverage their capacity to create a memorable user experience that keeps customers coming back.
Reduce Overall Operating Expenses
Buying boxes and inventory racks are expensive. All costs associated with shipping are part of your overall operating budget. Unless shipping is a big part of your business, it’s not likely to be a profit center. Instead, leave the job to someone else who specializes. That way, you only pay for the shipping on each order, not for any ancillary items like the packaging.
Avoid the idea that doing it yourself will make you a better shipper. Since the industry is a volume play, only scaled up providers get the best pricing. DIY shipping means overpaying during each step of the process, resulting in less competitive rates and a more miserable end-user experience.
Reduce Waste by Paying for What You Use Only
When you do own lots of shipping supplies and have few orders, it’s a total waste of money. That money should go to more vital operating areas. If you lock up too much cash paying for a nonessential service, it will come back to haunt you when it matters most. Use third parties to make budgeting much more predictable.
It’s a mistake to put too much money into fulfillment when your efforts still fall well short of industry leaders. Doing it all yourself will cost your company more to end up with a weaker offering. Stick with the parts of the business you know best and that consistently make the most money. Leave mundane, utility-style tactics like warehouse order fulfillment to industry leaders with scale.
Reduce Returns and Improve Customer Service
Your customers demand accurate, damage-free, and fast shipping. If you fail to provide it to them, they’ll shop elsewhere. Order fulfillment by a third party reduces overall return rates, which gives a boost to your customer service. Customers are happy when they get their merchandise on time and in the right shape.
If you’re looking to improve your online business, order fulfillment through outsourcing is a quick way to accomplish your goals. That way, you can offer your customers the kinds of deals they’re expecting. Your rivals use whatever tactics they can to ensure a steady stream of satisfied shoppers. You’ll need to do the same by innovating in areas like customer and shipping.
Shopping online is a mainstay of modern life. Fulfillment is rapidly approaching the status of science because it delivers financial results. There’s no faster way to add to your bottom line than to partner up with leading providers, especially for transparent business functions.