There are many elements to running a profitable e-commerce business, from successfully marketing and selling your products to ensuring exceptional customer service.
However, as your business continues to grow, you may find particular processes begin to suffer as a result. One of the most significant areas which growing e-commerce businesses often struggle to maintain is order fulfilment.
Ensuring that customer orders are consistently accurate and sent promptly, as well as overseeing the other crucial areas of your business can prove challenging. For this very reason, many small to medium-sized businesses choose to outsource their order fulfilment to a 3PL (third-party logistics) provider.
Not sure whether your business should outsource its order fulfilment? We’ve outlined a few signs to look out for, which could mean that the time is now!
How do I know if it’s time to outsource my order fulfilment?
Some businesses can initially be reluctant to outsource their e-commerce fulfilment as they don’t want to lose control of the process, or they are concerned about costs.
If you find your business is suffering from any of the following issues, it could be time to re-evaluate.
You’re neglecting other areas of the business
When orders pile up within an e-commerce business, it can be all too easy to spend all your time focusing on picking, packing and shipping. Whilst order increases are fantastic, focusing on fulfilling orders alone could stunt your business growth.
Businesses also need to prioritise product development, managing the website and marketing strategies if they want to see growth within their brand. Outsourcing order fulfilment can significantly free up time and allow your staff to focus on areas that will help your business to develop in the long-term.
You’re struggling with inventory levels
Businesses who regularly experience that they have either run out of stock or have too much one particular item, clearly have an issue with inventory management. Not stocking up on a popular product can be very frustrating for customers and will most likely cause them to look elsewhere.
Outsourcing your order fulfilment to a 3PL provider means that monitoring stock will be taken care of automatically. Order fulfilment services often have an online system which keeps track of stock levels and identifies which items are selling well and which ones are moving slowly.
You can’t keep up with demand
Businesses with in house fulfilment teams can often struggle to keep up with increased demand during busy periods. Being unable to meet demands can quickly lead to a backlog of orders and result in significant delays in delivering to your valued customers.
At a time where customers expect orders to be delivered quickly, often the next day, delays can be very frustrating for consumers. Not meeting your customers’ expectations could encourage them to leave a negative review and diminish your chances of repeat business.
Your warehouse is too small
As your business continues to grow, you may find that your warehouse is no longer fit for purpose. Space could soon become too small to stock the increased number of items. Moving to a larger warehouse could be expensive, as well as paying the further staff members, you would need to keep up with demand.
3PL providers can be a much more cost-efficient option as they are accustomed to dealing with businesses of all sizes and can quickly adapt to your growing needs.
You’re seeing an increase in returns
Whilst returns are a natural part of any business, seeing them pile up could mean something more in-depth. The customer could have received the wrong item, or the product could be damaged as it wasn’t packaged correctly.
Outsourcing your order fulfilment to a 3PL provider who uses automated processes, can ensure that the correct orders are sent out quickly and received damage-free.
Should customers still return their item as they have changed their mind, 3PL providers also have an efficient returns procedure to ensure that the process is as hassle-free as possible.
Your technology is lacking
Automated processes are the key to making the order fulfilment process so efficient. Fulfilment providers use the latest technology to ensure that the operation can be as effective as possible. Rather than dipping into your budget to source this technology, it can be much more cost-efficient to outsource to your order fulfilment.
Providers can ensure their technology integrates with your platform to provide a seamless process.
Some of the technology used by 3PL providers include:
- Devices to scan barcodes
- Stations to print labels
- Industrial trucks to quickly move items
- Online portals to track orders and provide stock data
Your costs are out of control
It’s normal for many e-commerce businesses to see seasonal surges in online orders. However, if you find that business is quiet for six months of the year, you could be wasting money on fixed warehouse related costs when it’s not even in use.
The benefit of a 3PL provider is the flexibility for pricing structures that are tailored to your business needs.
If your business is encountering any of the above issues, then it could be time to outsource your order fulfilment. If you would like further advice on what options are available, please do not hesitate to give Pointbid a call on 0121 326 7368.