Order fulfillment is one of the most important elements of running an ecommerce business, a large percentage of your success or failure will depend on the quality of your order fulfillment service. Outsourcing order fulfillment would mean you’re giving up one of the most important elements of your ecommerce business. Is it worth the risk?
Every ecommerce merchant knows order fulfillment is not easy, it always presents constant challenges – customer service, employees, management, warehousing, not to mention the fact that it is a time consuming process. We like to think of order fulfillment as an art – because there is ways to optimize your fulfillment and create a seamless ecommerce fulfillment process that will streamline the growth of your company.
Here’s the big question we’re constantly asked, “how can we get our order fulfillment right?”
Our answer: you focus on outsourcing 3PL order fulfillment to the right fulfillment partner.
Outsourcing order fulfillment services to a Third Party Logistics Company (3PL) company is a great way to immediately upgrade your ecommerce order fulfillment. Now, it needs to be the right order fulfillment partner, so make sure you’re doing your due diligence. There’s a wide range of benefits you’re going to receive by outsourcing your ecommerce order fulfillment to a 3PL provider. We’ll also discuss how you can use the experience and expertise of Thill Inc. (50+ years and counting) to optimize this vital component of your ecommerce business.
Today, we’ll be giving you an overview of what outsourced order fulfillment services are, how outsourcing your ecommerce order fulfillment to a 3PL provider can be extremely beneficial, and how you can leverage Thill’s fulfillment and shipping expertise to streamline one of the most important pillars of your ecommerce business.
What Is Outsourced Order Fulfillment Services?
Here’s the best way to visualize outsourced order fulfillment services – think about a process where you wouldn’t be responsible for warehousing, picking, packing, shipping, and everything in between. Instead, you implement a business model that outsources every ecommerce order fulfillment responsibility on your plate now, giving you the time, freedom, and money to focus on growing your business. Sounds great, right? That’s because it is – it’s going to free up a lot of resources on your side so business owners can focus on more important growth factors.
This is why outsourced fulfillment services are effective, and when you partner with results-driven 3PL ecommerce fulfillment companies like Thill Inc., you’re going to instantly begin seeing ROI from your investment.
An outsourced order fulfillment service is an agreement where you rent space from a 3PL company that warehouses your products and processes your orders for shipment when customers buy from your ecommerce stores. You’ll likely have an agreement with a 3PL logistics service provider to warehouse your goods at a flat monthly fee depending on the space your goods occupy in their warehouse facility. You then integrate your ecommerce store with its inventory management system to help streamline the entire fulfillment process.
When customers place orders at your stores, the order details are sent to your 3PL partners. The 3PL will then process the order, pick it, pack it, and send it out for shipment.
Just so everyone is on the same page, the core responsibilities of a 3LP fulfillment company include:
- Inventory receiving and storing inventory
- Inventory management – monitoring and tracking inventory levels
- Pick, pack, and get orders ready for shipping
- Logistics and scheduling shipment pickups with shipping carriers
(10) Reasons Why You Should Consider Outsourcing Ecommerce Order Fulfillment
There’s a number of different benefits you’re going to get for outsourcing ecommerce order fulfillment. Let’s take a look at them now.
(1) Time To Focus On Business Growth
Let’s start with what should be considered as one of the top benefits – time to focus on the growth of your business.
Ecommerce order fulfillment takes up a lot of time, focus, energy, effort, and it can cost a lot of money. It takes time to pick, pack, and prepare orders for shipping. When you have a small ecommerce store, managing fulfillment is easy. However, when products began to sell fast and you begin seeing spikes in demand, you’re going to see just how hard order fulfillment can be. If a big promotion or event catches, it can overwhelm your team and budget.
When you find it difficult to delicate either growing your business or fulfilling orders, it’s time to make a change. At some point, you’re going to have to make a decision – do you want spend your time, money, and effort doing order fulfillment or growing your company? Just in case your not sure, “growing your business!”
Bottom line, our 3PL warehouse team has years of experience with the pick, pack, and ship process, we have it down to an art. Using a 3PL service provider is going to help you remove yourself from the order fulfillment process, giving you the time to focus on:
You can’t grow your business when you’re working in it, but you can grow it when you have time to focus on it.
(2) Reducing Shipping Costs
Yes, every business owner’s worst nightmare – shipping costs. We know you don’t like them – but there’s good news – a 3PL order fulfillment partner can help you save money on shipping costs. When you partner with a 3PL that has warehouse facilities strategically placed, they can offer competitive shipping rates. If your products are closer to your customers, they’re going to receive products faster. When customers receive products quickly, their happy campers and more likely to buy from your company again.
While it will vary depending on who you choose to outsource ecommerce fulfillment services, you can save 10-15 percent in shipping costs, some can save 20 percent or more. The reason you can save money on shipping costs is because 3PL companies can negotiate discounted shipping rates from large carrier companies because they ship a lot of products.
Even better, some 3PLs have shipping software that allows them to compare shipping rates from different carries – which give them the upper hand to find the best possible shipping rates for customers. You will also be able to take advantage of the buying power of 3PL warehouses to reduce drayage costs for transporting less than truckload (LTL)/Full Truckload (FTL) shipments when transporting your supplies at pre-negotiated rates. You will also reduce packaging costs due to the reduced cost of packaging and shipping supplies.
(3) Higher, Better Customer Service
Customer services is an important aspect of handling the order fulfillment process, and it takes time to handle customer concerns and process returns. Working with eCommerce fulfillment companies helps you provide efficient customer service and help process returns, exchanges, and refunds faster.
Most 3PL logistics services offer customer support through phone or email 24/7. This gives you a better chance to improve and offer better reverse logistics operations and excellent customer service.
(4) No Long Term Leases
If you’re keeping order fulfillment in-house, you’re going to be discussing long-term lease agreements, as well as other long-term financial commitments to rent warehousing space for your inventory. If your business is growing, you’re going to be pushed to build new structures or rent extra space to warehouse your goods. This is the type of overhead costs that will eat into your bottom line – at some point, you’re going to be forced to make such decisions.
How can you avoid all that overhead costs and expenses? You start focusing on outsourcing ecommerce order fulfillment to a 3PL order fulfillment company. 3PLs like Thill Inc. charge you a flat storage fee, which means you only pay for warehouse space you need. If the amount of units are not changing, your storage expenses would remain the same.
When you use a 3PL company for your ecommerce order fulfillment, you get the immediate benefits of shared costs versus lease obligations that include rent, equipment, utilities, and other operational overhead costs. It feels good to get rid of those.
(5) High Demand And Seasonal Sales
During low volume times, your overhead costs and order fulfillment costs are going to be the same if you’re doing self-fulfillment; you will still have to pay all your workers and other overheads. During these times of the year, your costs can surpass your profits. It won’t matter whether you ship 100K or 10 orders; you still have to pay the bills and warehouse employees.
If you go the route of using a 3PL ecommerce order fulfillment warehouse, you’re going to see savings by eliminating all of the other obligations you have. As it pertains to seasonal demand and spikes in sales, you’ll be able to manage these a lot better. Remember, you won’t need staff for picking, packing, and shipping. You won’t need warehouse space to store products. Your 3PL provider will take care of all of that for you.
(6) Inventory Management Technology
We can all agree – inventory management is very important. We call agree on this too – inventory management can be challenging, especially when you don’t have the right tools for the job. When you start to get into inventory errors, lost items, inconsistencies, it can end up costing your company a lot of money. When you work with a 3PL company, you’re going to instantly benefit using their inventory management system.
While we can’t speak for the technology other 3PLs use, here at Thill Inc., our inventory management system is state-of-the-art technology that empowers our customers to make the best possible decisions as it pertains to their inventory.
When you easily integrate your ecommerce store with their systems, you can eliminate the risks of shipping errors and ensure accurate and efficient order fulfillment processing. Through their state of the art inventory management technology, you will be able to track your stock levels, process payment, select carriers, and automate order processing hence streamlining the pick, pack, and ship operations.
Now, you may be wondering, what ecommerce integrations do you have?
We have a lot actually, here’s a few of the ecommerce integrations we have.
(7) Analytics And Data
If you want to make the right business decisions, you want to base those decisions on your analytics and data. Another big benefit you don’t hear a lot when it comes to outsourcing ecommerce order fulfillment is the data and analytics you’re going to receive partnering with a 3PL.
3PLs that have this option empowers you with meaningful information, not just data alone, allowing you to to run your business wherever, whenever you want. Real-time analytics ensure you have immediate results, statistics and trends at your fingertips.
Whether you require marketing, analytics, reporting or forecasting tools, our system offers a complete reporting suite and the details you need. Every department in your company will be able to effectively manage its respective vertical because they can access the information from any secure Internet connection. Integrated key data elements – cleared media, telemarketing data, Web data, shipping data, billing data, customer service data, returns, cancellations and declines – empowers you to maximize your performance by making timely decisions that impact your bottom line.
(8) Transitioning To New Markets
When it comes to expanding into new markets, it can be a huge challenge. It takes time to receive, store, and organize your inventory, not to mention everything else your fulfillment provides (receiving orders, processing orders, and delivering orders. Fulfillment is both labor-intensive and time-consuming, what your left with is little time and resources to scale and try new markets.
Outsourcing your order fulfillment to a 3PL logistics service provider takes a lot off your plate – it means you don’t have to worry about picking, packing and shipping orders. You don’t have to worry about managing inventory, managing fulfillment staff, or hiring more fulfillment workers. Our clients are happy when they realize just how much time was involved in fulfillment, so they can focus that attention, effort, and resources on growing their company.
When you’re scaling your business without a 3PL, you have to be on top of everything. Partnering with a 3PL logistics company, you won’t have to worry about renting warehouses or trying to add brick-and-mortar stores to scale the company.
(9) Operating A Lean Business
You likely already know that backend logistics is a labor-intensive process. Keeping ecommerce order fulfillment services in-house can complicate your business structure. It means you will have to rent extra space for your employees, hire them, train them, pay them, and purchase all the tools and equipment they need to pick, pack and ship orders efficiently.
By outsourcing, the task of staffing and hiring employees falls on the 3PL logistics service provider, meaning you can keep your business structure lean and avoid all the headaches that come with hiring and managing employees in your fulfillment center. This will also help you reduce staff costs.
(10) Returns Management
Managing returns can be a huge bottleneck in your ecommerce business.
Thill Inc’s unique returns management approach will help keep customer satisfaction high, allowing you to manage returns efficiently and hassle-free.
Nothing upsets a customer more than a return that isn’t processed correctly or refunded immediately.
Resolve now how you intend to handle returns from beginning to end.
First, you need to decide what your return policy will be.
Some companies offer an extended return policy, but sellers need to evaluate whether that make sense for them based on the costs associated with their business model, product and price point.
Other companies leave returns to the discretion of their customer service team, based on the quality of the return and the circumstance for it.
Once you decide what the policies will be for returns, you need to instruct your warehousing staff about how you want returns executed on the inventory side, including which items are eligible for refurbishment.
An effective, reliable and predictable returns process allows you to recover the value of the product and saves you money in the long run. Plus, it gives you an opportunity to interact with the customer and transform a return into an exchange.
Outsourcing Order Fulfillment To A 3PL Partner Like Thill Inc.
If you are at a point where you feel that you need to switch and take advantage of all the benefits that come with outsourcing your order fulfillment, Thill Inc. can help. Thill is one of the most experienced ecommerce order fulfillment companies in the world, not to mention our powerful network of 3PL resources.
We understand this is a big, important decision for your future, but no other company knows understands fulfillment better than Thill Inc.
Reach out to us today by calling 1-920-967-9201 – you can also use our contact form. We’d love to discuss all the different solutions we can provide you and all things “fulfillment.” Talk to you soon.