Ecommerce businesses have grown massively over the course of the past year. Many business owners, perhaps including you, are now shipping more orders than ever. For those that are having trouble keeping up with demand, hiring a fulfillment company is an attractive prospect.
Let’s face it. Shipping everything in-house is a pain. Growing an eCommerce company already takes plenty of work, even without the added hassle of fulfillment.
The dream of an entrepreneur is often to build and create by making fantastic products or a brand that people can relate to. Packing boxes with the right kind of bubble wrap and finding the cheapest postage? Far fewer people dream about that part of the job.
Fortunately, outsourcing fulfillment isn’t merely a luxury to avoid doing the unglamorous parts of building a business. After a certain point, it just makes good business sense. It can even save you money, too. (More on that later!)
Why Hire a Fulfillment Company?
I’ll get into some specific scenarios in a minute, but the basic reason to outsource fulfillment is straightforward: so you can spend time and energy doing what you do best. Every hour you spend packing boxes is an hour you don’t spend on market research, brand-building, networking, and developing products.
Once you outsource fulfillment, orders come in and their information is automatically sent to your warehouse. From there, workers pick your items off the shelves, pack them in custom shipper boxes, and send them on their merry way. You don’t have to do anything, and that’s a very liberating experience!
Isn’t Hiring a Fulfillment Company Expensive?
It can be, but it’s not as bad as you might think. At worst, having your fulfillment done by another company is like having groceries delivered. Sure, it’s a bit more expensive that way, but you can spend your spare time making more money. The convenience itself has a value.
But in some cases, especially if you’re shipping a lot of goods,you might even save money. Fulfillment companies are able to negotiate cheaper postage rates and better prices on common supplies. If you’re shipping enough units, this can even offset the fulfillment center’s fees!
So when does the cost start to make sense? We consider 100 orders per month to be a good rule of thumb. At that point, shipping on your own is a pain and you won’t lose a lot of money on excessive account or storage fees.
Don’t get too caught up on that 100 order per month figure, though! If you want to know when it’s time to hire help, look for some of the telltale signs that I’ve listed below.
7 Signs You Should Hire a Fulfillment Company
1. Your Customer Base Grows Faster Than You Can Handle.
It’s hard to start a business. It’s arguably harder still to scale one, especially in a short period of time. Even in a rough economy, we saw last year just how quickly eCommerce operations can grow.
Ideally, you want to be able to ship large amounts of orders very quickly before you need to. Outsourcing fulfillment, even a little bit early, can help you do that. That way you don’t run into issues with slow or inaccurate order delivery, and you never run into the customer retention issues that come along with them.
2. You’re Unable to Fulfill Orders Accurately or Quickly.
Perhaps it’s a little too late to be proactive, though. It happens quite literally to the best of us - a company sells something that’s so in demand that you just can’t ship them fast enough!
If this sounds like you then it’s definitely time to call a fulfillment company. If custom mailer boxes are taking over your office, then you can reclaim your life in a matter of a couple of weeks!
3. You’re Spending a Lot of Time on Fulfillment
Willpower, as anyone who has worked in a cubicle adjacent to the fridge has found out, is finite. You might be the most conscientious, hard-working person in the world, but you only have so many hours in you. On top of that, you only got so many intelligent, top-of-the-line hours of work in you.
That might sound a little tough but don’t worry. You can do plenty with that time, to be sure. The thing is, you just need to spend that time and willpower on projects that move your business forward. After a certain point, shipping isn’t one of them.
Beyond a certain point, having another company ship goods for you will free up your time and headspace - or that of your employees - to do your best work. That can bring in enough revenue to offset fulfillment costs many times over.
4. Shipping Expenses are Adding Up.
Shipping expenses can be monstrous when you add them all up. I’m not just talking about postage, either, although that’s certainly not to be disregarded!
If you’re shipping in-house, you’re incurring labor costs. You’re also incurring supply costs for boxes, mailers, padding, and more.
There are also some invisible costs as well. Having laborers working on shipping instead of something else comes with an opportunity cost. Focusing on shipping might blur your business’s focus and you might lose out on the chance to retain customers through providing excellent customer service.
Sometimes, it’s time to sit down and crunch some numbers. You might be surprised how much more you can make by letting someone else handle the shipping.
5. You’re out of Storage Space.
This is a simple point, but an important one. Real estate isn’t free, and clutter is annoying. That means if you’ve got too much stock, you have to put it somewhere. Why rent a storage unit when you can have a shipping company send out goods on your behalf and store your goods?
6. You’re Shipping Internationally.
International shipping is hard! First, the postage costs are high, and it’s very easy to end up overpaying. On top of that, you have to fill out customs forms and make sure you do that correctly or face the consequences. Then, of course, there’s the difficulty of making sure the package is packed well enough to survive a trip around the world.
All in all, international shipping can be a real bear . The amount of knowledge that you need to pick up to effectively ship internationally is often not worth the time to acquire, and it’s better to let an expert handle it instead.
7. You Have Projects with Complex Needs.
Many fulfillment companies provide value-added services such as the following:
- Kitting - combining different items into a single box (such as a subscription box)
- Relabelling - if you need to replace old bar codes, for example
- Inserting marketing materials
Imagine the following scenario. You’re working with a company like Arka to make custom packaging, but you have existing inventory already. A fulfillment company can put your existing items in a new package and provide an overall better experience for your customers. Beats packing every box yourself!
Final Thoughts
Don’t be afraid to let a fulfillment company take care of shipping for you! For many growing businesses, it’s like a rite of passage. Having someone take the grunt work off your hands can make your entire business run more smoothly. Best of all, you might even save some money while you do it!
Brandon Rollins is a Marketing Consultant at Fulfillrite. His main areas of expertise are online marketing and supply chain management. He also runs Pangea Marketing Agency and writes for Marketing is the Product.
Need packaging?