Being in eCommerce consulting, and information sharing, we help people find the right fulfillment centers for their needs on a daily basis. I thought I'd share a few points to consider when looking into outsourcing your order fulfillment.
When Do I Need to Find a Fulfillment Center Partner?
This is a common question for growing eCommerce companies. The answer varies per company, product, and growth history/projections. However complex it may seem, the quickest way to an answer is to quantify the problem. Figure out what your cost is to ship orders. Here's the math:
Time spent packing/fulfilling orders
- Number of orders fulfilled
= cost per fulfilled order
Don't forget to include time spent finding the products, packing the box, taping, printing/placing label, and preparing for pickup/dropoff for carrier. The cost to ship orders is also called Opportunity Cost. This is the time spent doing something in which you could be doing something more valuable such as generating new sales.
In addition to the order fulfillment costs, you have shipping costs from parcel carriers such as USPS, UPS, FedEx, DHL, etc. If you have discounts in place with carriers, it may be 10-20 percent at best. By using a 3PL or order fulfillment center, you can utilize their parcel carrier discounts which range from 50-75 percent, depending on their volume. This may help you when it comes to quantity of shipments.
Along the same lines as shipping costs, packaging supplies can be purchased through a 3PL or fulfillment center at a reduced cost to you. Most 3PLs and fulfillment centers have bulk-purchasing discounts with packaging suppliers. Some will have relationships with normal corrugate suppliers while other will have relationships with printing companies that can create branded boxes and packaging. The packaging supplies can also include tape, bubble wrap, paper fill, etc.
Technology can enhance your customer experience and create efficiencies in most cases. A lot of 3PLs and fulfillment companies have integrations with eCommerce platforms like Shopify and marketplaces such as Amazon, eBay, etc. This means the fulfillment center should receive orders to their system (OMS/WMS) as soon as your customer orders from you. This allows the 3PL/fulfillment center to begin the order fulfillment process immediately, providing you same day order processing.
Another part of the technology integrations 3PLs and fulfillment centers may have readily available for your advantage is an easy/efficient returns systems. Some 3PLs and fulfillment centers have the ability to provide you with a custom link and brandable page to direct your customers to for returns. These systems allow your customers to enter order ID, tracking number, or a unique identifier into this web page and manage their return online. This can include return product selection, shipping label creation, tracking info, and even refund management.
A growing service for 3PLs and order fulfillment centers is customer service. Providing customer service to eCommerce companies give you a value added service at no or nominal cost. Customer service for the fulfillment process can be directly integrated into your website and managed by the 3PL or fulfillment center, while also notifying you of every CS request. This is a CX feature that can go a long way with your customers.
Foreign Trade Zones (duty deferral)
Value added services like repair, rework, inserts
eFill Source is here to help eCommerce companies navigate the difficulties of these decisions. We can help you quantify the questions and the results of order fulfillment, making the decision easier on you. eFIll saves you time researching and calling on 3PLs and fulfillment centers, and does the hard work for you. We're happy to help with any questions you have while growing your eCommerce business. Feel free to contact us at firstname.lastname@example.org.