Outsourced Fulfillment Services
One of the most crucial (and challenging) parts of establishing an internet business is fulfillment. As customer expectations continue to alter, the complexity and pressure on ecommerce firms to satisfy demand and keep uprise.
While you may be able to manage it all yourself when your firm is tiny or just getting started, it may make sense to outsource supply chains management responsibilities such as warehousing, fulfillment, and shipping at some time.
What Exactly is Fulfillment Outsourcing?
Outsourced order fulfillment is engaging a third party to manage some or all components of the order fulfillment process, such as inventory storage, packaging things, and shipping orders.
Third-party logistics businesses, or 3PLs, offer all of the services required to truly outsource your fulfillment.
While outsourcing may appear to be a hazardous alternative, the company to which you outsource fulfillment should be a true business partner, not merely a transactional vendor.
What Services Do Third-Party Order Fulfillment Firms Provide?
The majority of 3PLs provide typical fulfillment services like picking and packing, inventory storage, global shipping, automated package tracking, and more. Other services include return management, bespoke solutions ranging from kitting to branded packaging, B2B fulfillment, and more. Furthermore, some 3PLs offer fulfillment technology that includes all-in-one order and inventory management software, analytics tools, and software for tracking real-time stock levels, orders, and shipments.
When you outsourced fulfillment services to a third-party logistics (3PL) company, they conduct the following services on your behalf utilizing their infrastructure, labor, and technology:
In the 3PL’s facilities, you can store and manage your goods (not just an on-demand warehousing platform that just matches you with warehouses that have excess space).
As soon as an order is placed on your website, you must follow a pick list and get the item(s) from their location in the 3PL’s warehouse.
Using the appropriate box or poly mailer and packaging materials, package all products in the order, then apply the mailing label to the package.
Scheduling shipping carriers to pick up packages from the 3PL’s facilities and deliver them to your consumers, along with electronic order tracking data.
Processing of Returns
Streamlining the returns procedure and reintroducing unused products into your available inventory.
The Advantages of Using an Order Fulfillment Business to Outsource Shipment
There are numerous reasons why ecommerce firms outsource retail order fulfillment to a third-party logistics partner rather than doing it in-house.
- You are not required to keep an inventory yourself.
- You don’t have to bother with packing materials, shipping companies, or running a warehouse.
- You can scale by concentrating on the most crucial things.
- You gain access to the 3PL’s volume and fulfillment expertise.
- With numerous fulfillment facilities, you acquire a strategic regional footprint.
- You receive the most advanced technology and analytics to help your organization flourish.
Why Should You not Outsourced Fulfillment Services?
While outsourcing order fulfillment may appear to be a good alternative for your ecommerce firm, the following factors may persuade you to keep fulfillment in-house.
- You want complete control over every stage of the fulfillment process.
- You are adamant about personalizing orders through gift-wrapping or personalization.
- Each of your items is unique and has unique requirements.
- Your sales volume is small enough that you can pack orders yourself.
Best Way to Outsourced Order Fulfillment?
Not every 3PL will be the ideal fit for your company, but the proper 3PL should have the technology, infrastructure, support, and knowledge to help you expand your business, no matter what stage you’re at or what obstacles you face.
You will discover the most critical questions to ask a potential 3PL, as well as advice to consider during your search, so you may feel confident in selecting the proper fulfillment partner for your company.
1. Are you prepared to delegate fulfillment?
If any of the following apply to you, you may be ready for a 3PL:
- Every week (or day), I spend several hours packing boxes and shipping orders.
- I no longer wish to fulfill orders myself (or when I launch my brand).
- I’m running out of storage space for my product.
- More time is required for strategic projects such as marketing and product development.
- I’m not interested in investing in distribution infrastructure.
2. Determine Your Requirements in Order to Get the Best Fit
During your early discussions with several 3PLs, you may come across a handful that is unable to work with you. Don’t be disheartened. Every third-party logistics provider has its own set of customer qualifications, such as:
- A maximum number of SKUs.
- Minimums and Maximums for Monthly Orders.
- Product materials that are prohibited.
- Integrations they supply that correspond to where you sell, as well as specific features, services, or capabilities that they can or cannot give.
Your company is special. That is why it will take some time to find a 3PL that will supply you with all you require. If you’re having trouble locating a 3PL that fits inside your budget, examine the following:
Can you fit the cost of fulfillment into your budget? It may not arrive until you reach a specific order volume.
Bundles, increasing product costs, and minimum spend thresholds in exchange for free shipping (that is more than your usual purchase value) should all be explored.
3. Prepare for the Questions that a 3PL will ask You
A 3PL will also ask you questions about your business and needs to help you gather the information you’ll need to transport products in the most strategic method possible.
Prepare ahead of time by having answers to the following questions ready to go into the conversation:
- Product dimensions and weights.
- Monthly order volume at the moment.
- Marketing projections, product launches, public relations campaigns, and markets that you intend to enter or develop into.
- Where your clients are located (by zip code) enables a 3PL to determine which fulfillment location(s) you should keep inventory in (this is often exportable from your online store)
- The average amount of goods in each order and the most common order combinations.
- The total number of SKUs is (or unique products you sell)
- The technologies you employ (ecommerce platform at minimum)
Some 3PLs may also inquire about average order value and other inquiries that will assist them in advising you on how to maximize sales, reduce expenses and abandonment, and optimize your supply chain. This will come from 3PLs who have considered their business plan and are searching for a long-term partnership. The more data and information you disclose, the better a 3PL can assist you and offer strategies to streamline your fulfillment approach.
Remember that the larger and more experienced the 3PL, the more insights and information they have gained from working with thousands of businesses across industries.
4. Evaluate 3PL Providers and Pick a Choice
To stay organized, make a list of “must-have” items such as services, technology, warehouse locations, and price. You should also create a scorecard or a comparison sheet to help you keep track of the advantages and drawbacks and services of each 3PL.
Another point to remember is that the cheapest option is not always the best option. Be wary of sacrifices for the cheapest alternative, and compare apples to apples. Consider this: What am I receiving for this price?
Which services are the most important to my company?
How much help will I receive?
5. Integrate Your Sales Channels and Distribute Merchandise
Once you’ve decided, go through the entire onboarding process and criteria to get started. An installation team can help you set up an account, integrate your store (and other sales channels), set up delivery options, and import all of your products.
When it comes to preparing and sending inventory, make sure to follow the 3PL’s particular processes.
How Paylessprepcenter works
Our outsourced fulfillment services assist you in optimizing for time and cost, as well as using the delivery experience to exceed customer expectations and gain a greater share of the customer relationship.
You may strategically disperse your inventory among Paylessprepcenter’s global fulfillment centers to get your products delivered faster and for less money, as storing inventory near your consumers helps reduce shipping zones and costs associated with sending orders to distant regions.
Whether you ship from one or many fulfillment center locations, Paylessprepcenter’s 2-Day Express shipping option allows you to offer 2-day shipping to 100% of the continental US.
Paylessprepcenter delivers data and analytics to aid you with everything from year-end reporting to better supply chain decision-making, in order to provide you with visibility into our operations and performance while also holding us accountable. We show you which fulfillment centers you should stock, how many days of inventory you have before you run out, the effect of promotions on stock levels, the average cart value, shipping cost, and days in transit for each shipping method, your fulfillment cost per order, storage cost per unit, and much more.