When To Shift From In-House To Outsourced Fulfillment

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Getting your ecommerce brand off the ground is a huge achievement, but with all of those extra orders comes a lot of extra work as well. At a certain point, managing all of your own fulfillment is going to be too time-consuming - that’s where third-party eCommerce fulfillment solutions like OctoShip come into play.

 

But how do you know when it’s time to make the jump from in-house to outsourced fulfillment? Here are some of the signs that you might need to outsource your fulfillment process.

In-House Fulfillment vs. Third-Party Logistics: What’s The Advantage?

First, let’s take a look at the key differences between in-house and outsourced fulfillment. When you do your own fulfillment in-house, you manage the entire process. You’re responsible for everything - taking orders, packaging, shipping, tracking, and more.

 

Many ecommerce companies are limited to in-house fulfillment when they’re first starting out. However, these in-house fulfillment processes can actually hold you back as your business grows.

 

Alternatively, you can outsource your fulfillment to a third-party logistics firm, preferably to one specialized in eCommerce fulfillment. These companies offer a wide variety of services to make your fulfillment processes more efficient.These typically including packaging, warehouse storage, shipping and tracking, returns processing, and more…. Also,  they have most likely negotiated rates with carriers like Fedex, UPS, USPS and others, and you can benefit from it.

 

The advantage of using shipping and fulfillment solutions is that you can fill your orders far more  efficiently. This means you can expand your business much faster, and you’ll also keep customer satisfaction up by cutting back on late or missed deliveries.

 

While ecommerce shipping fulfillment is an investment up front, it can actually help you cut down your costs in the long run. By streamlining your fulfillment process, you save both time and money, and your team can focus on things like developing new products and marketing rather than the day-to-day grind of packing and shipping your orders.

Signs You Should Outsource Your Fulfillment

If you’ve been considering investing in order fulfillment services, here are some signs that it’s time to make the switch.

You’re struggling to meet demand and deliver on time.

On-time deliveries are incredibly important to consumers. A 2019 study indicates that 45% of consumers are unlikely to order from a business again after a late delivery. It’s likely that that number has only gone up in the two years since then.

 

When the COVID-19 pandemic hit, consumers turned to online retailers to get their shopping done safely. Even as the pandemic calms down, consumers have gotten used to buying their favorite products online and getting shipments quickly.

 

If you’re struggling to get your orders out in a timely manner and customers are complaining of late deliveries, it’s likely time to start outsourcing your fulfillment. A fulfillment service can help you process orders and get them out the door much more quickly. Their strategically-placed warehouses and established relationships with shipping companies also mean you can offer same-day delivery for many of your customers.

Your shipping costs are getting too expensive.

One of the biggest challenges of managing all your fulfillment in-house is the high shipping costs. When you’re paying for all of your shipping directly, the costs can add up very quickly. This is especially true if you’re paying for expedited shipping, shipping large packages, or shipping large distances.

 

Many small businesses will pass these expenses on to their customers, but this can backfire in the long run. 66% of consumers expect free shipping on all of their online purchases, particularly for more expensive purchases. High shipping costs can turn customers away, especially if you have a direct competitor that is offering free shipping.

 

Fulfillment shipping services can help you cut back on your shipping costs. They also make it easier to provide free or low-cost shipping for your customers. eCommerce fulfillment logistics firms can provide affordable shipping costs, especially as your volume grows.

You don’t have enough warehouse space.

It’s common for growing ecommerce businesses to run out of warehouse space as they expand their inventory. However, renting and managing larger warehouses can be challenging for a small company. Outsourcing your fulfillment to a 3PL company solves this problem.

 

3PL companies like OctoShip have access to multiple warehouses that are strategically placed for efficient distribution. They also label and track products to keep your inventory safe and secure at all times. By outsourcing your fulfillment, you can maximize the space you do have for development and production, instead of using it for storage.

You need to expand your delivery radius.

Another downside of managing your own ecommerce order fulfillment is that you’re limited to a single distribution center. This can make it very difficult to get your products to customers that  are far away from you. The internet has made it easy to connect with customers around the globe, but shipping to them can be very costly and time consuming.

 

Working with a 3PL can help you offer shipping to a much wider range of destinations. Outsourcing your shipping is also particularly helpful if you want to offer international shipping, as your provider can help you with customs and all of the other challenges of shipping abroad.

You need advanced technology or more sophisticated solutions.

As your business grows, you may need access to advanced shipping technology or unique packaging solutions that you just don’t have access to as a small business. Advanced technology is a big investment up front, and it just doesn’t fit into the budget of many growing businesses. Working with a 3PL firm gives you access to fulfillment solutions like automation and temperature-controlled warehouses. If you have a product with a unique design that you’re struggling to package, outsourcing your fulfillment can help with that as well.

You don’t have enough hours in the day to get everything done.

There’s only so much time in the day, and no matter how amazing your team is, you might start to feel overwhelmed if you have too many orders to keep up with. Spending all of your time processing and packing orders can really limit your businesses’ growth.

 

There’s so much that goes into expanding your business - developing your team, creating new products, implementing new marketing strategies, and getting feedback from customers. If you don’t have enough time in your day to do these things, it’s easy for your business to get stagnant. Ecommerce fulfillment companies take the easier day-to-day tasks off your hands so you can spend more time achieving your goals and maintaining a healthy work-life balance.

You feel like you’re in over your head.

Just because you’re running a successful ecommerce business doesn’t mean you’re a fulfillment expert - and that’s okay! When you’ve spent so much time developing a great product and building up your customer base, it’s understandable that you might feel a little overwhelmed with all of the challenges of order fulfillment.

 

When you’re feeling unsure of what to do or where to go next with your fulfillment strategy, a 3PL for eCommerce firm will take that stress off your hands. You’ll work with ecommerce experts who can help you develop a fulfillment system that makes the most sense for your product and your customer base. If you have questions, you’ll have someone to go through, rather than wading through complex information on your own.

Choosing A 3PL Fulfillment Provider

If you’ve noticed any of these signs with your business, it is likely time to outsource your fulfillment. Working with a 3PL provider allows you to develop a sophisticated shipping strategy that makes sense for your business.

 

When outsourcing your fulfillment, it’s important to find a provider that offers you a personalized service and is able to address the unique challenges you face as an online retailer. OctoShip offers all-in-one ecommerce fulfillment in Miami, Florida.  When you ship with Octo, you can seamlessly connect your online store, send your inventory, and then relax as we send your products to their final destination.

 

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