In many cases, the best products don’t guarantee success for an e-commerce business. That is because those goods may not be ideally delivered to target consumers. More businesses fail in shipping and logistics. When products can’t possibly reach customers on time, at reasonable costs, and in satisfactory condition, there is a need to sign up with a reputable and highly reliable third-party fulfillment center.
Poor e-commerce fulfillment could be a major hindrance to sales and ultimately, to business success. The competition is fiercer in the new normal as more e-commerce ventures target discerning customers and the supply chain gets more disrupted. A small-scale or startup venture can overcome this impediment by signing up with a third-party logistics (3PL) provider.
Based on a 2018 study, about 54% of online shoppers cancel e-commerce shopping carts due to high delivery costs, while 24% of canceled orders are attributed to slow delivery. About 45% of online shoppers prioritize overall convenience when shopping.
Thus, e-commerce fulfillment could be a huge challenge. The process involves picking up products from the storage, packing those into delivery boxes, and shipping them to the addresses of customers. Just like in traditional retail, operational fulfillment in e-commerce still addresses requirements for inventory management, warehousing, receiving, picking and packing, and delivery. It even includes managing possible returned goods.
Even big e-commerce companies partner with 3PL providers for their fulfillment centers. For undermanned and lean teams, hiring a fulfillment partner is a must to succeed especially in the current landscape.
When to e-commerce fulfillment?
An online store that handles just a handful of orders on a daily basis may do with in-house e-commerce fulfillment, especially when the customer addresses are just within the serviced areas. However, according to experts, 10 or more shipments per day could be unmanageable for a small e-commerce business.
Scaling up a business calls for outsourced warehousing and logistics. A sizeable amount of capital is also required before considering signing up with a partner fulfillment center.
3PL brings an effective e-commerce fulfillment model for e-commerce businesses that can benefit from outsourced supply-chain management. For a growing venture, there should be sufficient and effective resources for storing, packing, and shipping inventory, and those could only be readily provided in the quickest time possible by a third-party fulfillment center.
Advantages of having an e-commerce fulfillment partner
Warehousing and logistics are important components of any e-commerce business’ supply-chain operations. Managing these aspects well can lead to overall success while failing to be effective can bring issues that may negatively impact growth and customer perception.
Having a reliable fulfillment center as a partner is a prerequisite to ensuring fast, hassle-free, and satisfactory delivery of products to very discerning customers. Effective logistics brought about by a good 3PL partner could facilitate a good customer experience—especially when goods are shipped on time, at less cost, and in mint condition.
Avoid warehousing requirements
Most e-commerce businesses prefer outsourcing warehousing due to overall costs. Leasing and keeping a warehouse could be a tedious and expensive business requirement as it entails allocations for more personnel, spending for utility and maintenance costs, and paying for a regular (usually in long lease terms) rental amount, whether the space is utilized fully or not.
Fortunately, there are competitive logistics providers that offer reasonable or flexible pricing, which is advantageous for small-scale or startup businesses.
Ensure a smooth fulfillment process
Having a reliable e-commerce fulfillment center as a partner is a sure way to ensure a seamless and satisfactory fulfillment process—from inventory management to warehousing/storage, packing, shipping, and handling of possible returned goods.
Fulfillment centers comprise the best people who have become experts in what they do in the supply-chain system. This means an e-commerce business is spared from the rudiments of managing and training staff to do the job well. The business owner/s need not worry about how people receive the orders, manage inventory, and process/ship the goods to beat target dates.
Doing this process in-house can bring about the risks of delivering bad customer experiences. Packaging can already eat up a lot of time and effort for personnel and shipping the goods is another task that requires expertise and efficiency.
Deliver to customers even in far-flung areas
The e-commerce business can always choose to partner with an e-commerce fulfillment center with a wide warehousing and logistics network. Doing this in-house could be a real challenge to small ventures and startups that may not be able to establish centers in far areas. Geographic locations may not be an issue anymore. Shipping products to customers in very remote areas will be a responsibility the partner fulfillment center has to assume.
Focus on sales/marketing, business development, expansion
An e-commerce venture can focus its resources on other important requirements like sales and marketing, business development, and potential expansion when it has a reliable e-commerce fulfillment center as a partner. Logistics and shipping require too much attention and through a 3PL, the business is offloaded of those vital requirements.
Being freed from the burden enables the e-commerce team to have time to formulate and implement new business strategies, adopt more effective inventory management techniques, and ultimately, realize rapid growth without the need to deal with backlogs and tedious back-end logistics. Time and effort could be used by the e-commerce business more profitably.
Factors to consider when choosing a partner fulfillment center
Cost is logically a primary consideration when choosing a 3PL provider for any e-commerce business. While it may not be cheap, there are ways to make the expense reasonable. Fulfillment centers that ask for costly annual or monthly retainers could be avoided especially if the products are seasonal and are not creating healthy demand in some months of the year. Go for those offering flat-rate (or fixed) fee structures that won’t surprisingly surge as shipments increase.
Look for an e-commerce fulfillment service that offers flexible charging for storage capacity, without asking for an additional fee for prolonged warehousing or storage. Keep away from those charging extra for packing slips, helpdesk assistance, and additional packing materials.
Go for a partner fulfillment center with a spacious physical warehouse to make sure it can accommodate growth in storage requirements once the e-commerce business scales up. Above all, seek recommendations and read reviews to be sure only the reliable ones are considered and eventually signed up.
