By Augustin Kennady
Your inbox is overflowing with order receipts. You’re having trouble reconciling orders and figuring out which ones have gone out. Your garage has turned into a loading dock for inbound freight shipments and pallets of product. And your living room now more closely resembles a shipping station than a lounge area. At this point, one truth is inescapably clear: you need a fulfillment center.
Fulfillment centers handle some of the most frustrating, confusing, and challenging parts of running an eCommerce company so you can focus on what you do best: running and growing your business.
Here are some signs that your company is ready to outsource fulfillment:
You have grown too large
There is no magic number at which point you will be ready for a fulfillment center. Every company has a unique order flow, product dimension, shipping expectation and, as such, there is truly no “one-size-fits-all” solution.
That being said, one hundred is a useful number when considering fulfillment. One hundred orders per month averages out to just over three orders per day, at which point the process of fulfillment begins to detract from the value of your time on operations and marketing.
At one hundred orders per month, there is a reasonable chance that outsourced fulfillment might be economically advantageous.
The clearest sign that you are no longer going to be able to handle fulfillment in-house is perhaps the most apparent one: if you are struggling to meet your customers’ expectations. In eCommerce, the window of impressing your customer is so small. You simply can’t risk missing out due to a haphazard fulfillment strategy. If this concern ever materializes, get in touch with fulfillment centers immediately.
There is an ancillary benefit that comes along with this size: fulfillment centers frequently offer significantly cheaper shipping options than might otherwise be available to you due to the volume at which they ship.
[amazon_link asins=’B00M551I0O’ template=’ProductAd’ store=’succeedingin-20′ marketplace=’US’ link_id=’2b5be8b7-2d05-11e8-83e5-d1f2ed6bfb63′]You now ship Internationally
Shipping internationally is fraught with challenges. Issues like customs, duties, declared value, HS codes, international zones, and international product regulations – things you never had to consider when shipping domestically – will all rear their collective ugly head and make life challenging at the worst possible time.
The good news is that fulfillment centers handle international shipping on a regular basis, and they will know precisely what questions to ask at various points in your onboarding process to ensure that there are no unpleasant surprises.
Furthermore, while domestic rates are often relatively stable and bound within a predictable price range, international shipping costs vary widely across destinations and package sizes. It will absolutely be worth your while to consult with a fulfillment center to ensure that you are going with the international shipping service that aligns most closely with your customers’ needs and those of your business.
[amazon_link asins=’1882390164′ template=’ProductAd’ store=’succeedingin-20′ marketplace=’US’ link_id=’4fa30489-2d05-11e8-8c23-f3861f73adf9′]You have no space
Running out of space is not necessarily commensurate with growing too large. Manufacturers frequently require a relatively large “minimum order” number in order to guarantee the best shipping prices. As a result, you might be stuck with several large pallets of product. Worse still: if your inventory turnover is relatively low, you might be burdened with all of these products for months!
Figuring out where to store all this product might not be an issue if you live in a four-bedroom home with a finished basement. However, if you’re in a small apartment or a condo, you’ll have to grapple with not only where to store the products, but how to transport the products to your condo and then out to the distribution centers.
With a fulfillment center, these are no longer concerns. You simply instruct your manufacturer to ship your products to the fulfillment center. They will then store your inventory in bins and pallet racks, picking your products and shipping it to your customers any time an order comes in.
This is especially useful if you field orders from various channels. A fulfillment center will be able to adjust your inventory accordingly, and may even be able to integrate with your shopping carts directly!
Conclusion
Fulfillment isn’t for every company. Some companies are not yet large enough to take advantage of the volume based discounts or opportunity cost-savings afforded by outsourcing. Other companies might ship lower volume, but they may focus exclusively on domestic customers. And some companies may have sufficient storage space in their own headquarters. Even so, the business landscape is continuously evolving, and whether or not you need fulfillment today, you should definitely be looking forward to outsourcing it when necessity dictates.
_______
Augustin Kennady is the media relations director for ShipMonk, a fulfillment center living at the confluence of logistics and technology. You can reach out to him on his Quora page or via email.
