Oct
19

Outsourcing Logistics: 3 Reasons it Makes Sense for Your Ecommerce Business

Did you know that 38% of customers will abandon their online purchase if the delivery takes longer than a week? That's because people want instant gratification.

This means that you need to amp up your e-commerce fulfillment game.

Luckily, you do not have to do it alone. You can outsource your e-commerce logistics. It is just a matter of doing it right head-on.

Why Getting E-commerce Fulfillment Right Matters

As mentioned earlier, customers want instant gratification. This means you will need to set up a streamlined e-commerce fulfillment process.

When done correctly, it allows you to overcome the following challenges:

• Fulfilling a high volume of orders
• Reducing order cycle time
• Providing flexible delivery options

The problem with doing this on yourself, though, is that you are prone to errors. Plus, fulfillment can take away a big chunk of your time ‒ time you could have spent making your business grow.

Hence, you might want to consider working with a third-party logistics company.

3 Reasons Why You Should Outsource Fulfillment

Here's the thing: You may have the best products and the most robust marketing strategy. But your online business will not thrive if you cannot make your customers happy.

And one way to do that is by having a seamless e-commerce fulfillment option. This is where a third-party logistics company could help.

If you still have qualms, here are three things that can convince you to outsource your e-commerce fulfillment:

1. Automate and Scale Your Process

Running and making your business grow is not all unicorns and rainbows.

You need to build systems and hire the right people to have a streamlined process. But the problem with this is that it costs money to hire an employee. Plus, people are prone to mistakes.

Mistakes are something you cannot afford to have when it comes to e-commerce fulfillment. Mind you, handling product returns due to wrong delivery can be costly.

When you outsource your e-commerce fulfillment, though, you have access to a handful of technologies. These innovative features can automate and scale your operations.

As for what technologies you can use, that will depend on your logistics partner.

2. Ensure Customer Satisfaction

Imagine this scenario: Someone orders from your e-commerce store, and your backend system automatically sends it to your 3PL partner.

From there, the people at the logistics center will handle the picking, packing, and shipping of products. Hence, the product is delivered on time.

You made a customer happy without lifting a finger. This is what outsourcing your e-commerce fulfillment can do.

Even better, that customer gets to rave about you on social media. That's free publicity for your brand!

3. You can Focus on Your Business

The beauty of outsourcing your e-commerce fulfillment process is you get to share responsibility. In this case, it is ensuring that products are delivered on time.

Now that you have your 3PL partner to take care of it, you can focus on other aspects of your business. This includes the following:

• Improving your products
• Finding ways to nurture existing customers
• Expanding your business and market reach

But more importantly, it allows you to focus on your "why." Why did you start your e-commerce business in the first place?

Focus on your passion, and let your logistics partner zero in on the complicated process of delivering products to your consumer.

3 Fulfillment Options to Choose From

Now that you know the benefits of outsourcing your e-commerce fulfillment process, you might be curious about what options you have.

1. In-house Fulfillment

In-house fulfillment means you handle everything. This includes warehousing, packing, and shipping your products.

This is ideal if you are starting up and have limited inventory. Another benefit is that you have control over product fulfillment.

The caveat, though, is that having a warehouse space can be expensive. And this can have an impact on your business's bottom line.

2. Dropshipping

Dropshipping is another startup-friendly e-commerce fulfillment option.

The idea here is to sell products from manufacturers and other suppliers through your online store. Once you receive the order information, you can forward it to them. And the manufacturers and suppliers will handle the fulfillment for you.

But what's cool about dropshipping is that you get to set a price margin for every product you sell.

So, if you can score a $20 pair of pants, for example, you can sell it for $25 - $30. You only need to pay the manufacturer the factory price, and you get to keep the rest.

3. Third-party Fulfillment

Third-party fulfillment is quite the opposite of in-house fulfillment.

Sure, you or a direct supplier makes the product you sell. However, you need someone who can handle product warehousing, packing, and delivery. That's because this part of e-commerce can be expensive and cumbersome.

To minimize the cost, you can hire a 3PL partner. They can help you set up a system to streamline a process while ensuring customer satisfaction.

Another benefit of hiring a 3PL company is that they have international partners. This means outsourcing your e-commerce fulfillment with a logistics partner enables you to cater to international customers.

Outsourcing Saves Time and Money

In this hyper-connected day and age, outsourcing your fulfillment process is becoming a prevalent option in the e-commerce industry.

First, it allows you to automate and scale your process. That's because 3PLs have a system that will enable you to be efficient in fulfilling orders.

Second, outsourcing ensures customer satisfaction. Because you are efficient in fulfilling orders, this means products are delivered on time.

Third, you can focus on your business. When you outsource one aspect of your online store, you get to prioritize your "why." Like, why did you start an ecommerce business and what you want to achieve from it.

Simply put, hiring a 3PL company gives you the liberty of finding ways for your business to thrive. It can be through customer retention, product improvement, and effective marketing campaigns.

Hence, if you want to grow your e-commerce business, consider outsourcing your e-commerce fulfillment process. You would be surprised at what having a robust and efficient system can do for your online store.

By Jake Rheude
Jake is the director of business development and marketing for Red Stag Fulfillment, which operates order-fulfillment warehouses across the United States.