You asked it correctly, too! The alternative to doing your own fulfillment is not someone else doing it for you. As you said, the alternative is having the time to market and grow your business instead of packing and shipping. But in my experience (I'm with Fulfillrite, a fulfillment center on the East Coast of the USA) in order to really know whether fulfillment services are right for your business, you need to ask yourself some questions and see where you rank with the answers.
Here are some questions you should be asking yourself to determine if order fulfillment services are right for you:
1. How much time do you currently spend on the following items:
Inventory record keeping and management
Shopping for, and purchasing, packing supplies like boxes, tape, void fill, labels
Looking for and making sure you have and are shipping the exact item ordered
Picking, packing, and mailing out the orders
Retreiving tracking information
Communicating shipping status and tracking to your customers
Dealing with carriers and rates
Managing the finances and bills involved in fulfilling orders
Integrating your Shopify store with your shipping software
Understanding duties and taxes; completing all the right forms
2. How well are you actually meeting your customers' expectations in the following areas:
All orders are shipped on the same day they are ordered
Customers know exactly what their order status is and have their tracking information in real time
Your inventory is accurate and up to date
Orders are packed professionally, securely, and in perfect condition
No surprises for shipping costs
Customers receive the right items every time, to the right address
Returns are handled professionally and smoothly
3. How much money are you spending on the following items:
Renting warehouse or shelving space, utilities
Shipping and postage
Warehouse/shipping employees' salaries, workers comp, insurance, benefits
Label printers, toners, maintenance
Driving to and from delivery locations
If the answers to the above questions are minimal time/effort/money spent on all those things, and high level of meeting customer expectations, you should probably continue fulfilling the orders on your own until some of those issues begin to show up. You are likely a small business that is highly organized, and paying for fulfillment services is not necessary yet.
However if you are experiencing significant time/money/effort spent on these things, and/or your customers are not getting their expectations met, you should seriously consider a fulfillment center. A great fulfillment center will take every one of those issues off your hands. They will shop for the lowest shipping rates, provide packaging materials, manage your inventory, handle returns, and communicate all the relevant information to you and your customers in real time. Basically, the fulfillment house will do it all for you, including integrating with your Shopify store, verifying correct addresses, offer parcel and inventory insurance, and most of all, pick, pack, and ship the right products on time, every time.
This will free you up to actually run your business without added costs and headaches. It will also ensure the critical customer experience is being met with extraordinary care and service. You will spend your time engaging with your customers, marketing your products, developing great vendor relationships, and growing your business!
You will need to consider the costs of fulfillment of course. These include storage fees, monthly account maintenance fees, pick and pack fees, and postage. In most cases, though, aside for the time savings and decluttering of space and mind, all of these costs come out lower than paying for your own storage, employees, and postage.
Feel free to reach out to me if you have any questions, or could just use some general guidance on fulfillment services, costs, and making that all-important decision. My email is email@example.com.
Best of luck!
Michael gave an excellent answer here. From my experience working with ShipMonk (an eCommerce fulfillment center located on both the East and the West coasts), there is a rather discrete threshold at which point self-fulfillment becomes too unwieldly and cumbersome to continue.
This threshold is roughly 100 orders per month.
A few things happen when you cross the 100 order/month plateau (which, admittedly, is somewhat arbitrary):
Now, to be completely transparent, there have been clients of ours who found fulfillment useful at only 30 order per month. These cases are the exceptions rather than the rules, however, and 80-100 or more consistent orders per month is what I consider the "tipping point". I hope this helps you, and good luck out there!
Hi there, Wongco!
Realistically, there is no strict minimum order threshold that you have to hit in order to reap the benefits of fulfillment. For instance, even if you only have a few order per month but you are geographically unstable and/or don't have inventory storage space, you might benefit from fulfillment.
That said, a good threshold to keep in mind is 80-100 orders per month. At this rate, you're looking at around 3 orders per day (on average), which is likely enough to justify fulfillment. Our most successful companies at ShipMonk have order volume at 100-10,000 orders per month. :)
Good luck out there!
My name is Marvin and I am a representative for DPTL, LLC. We are a full service, family owned 3PL that can provide services such as nationwide transportation, secure storage, inventory management, pick and pack, and order fulfillment at a very competitive rate. We can cater to any business, small or large. Please feel free to reach out to me for pricing and more information.
There is another option, which is getting growing your business by inspiring. I get a few hundred orders per month and we have someone who comes in 2 hours a day 3 days a week to pick and pack.
This can work particularly well if you are in a student heavy area. It's very cost effective, but does come with risks.
As soon as anyone starts getting consistent orders 100/mo+ it makes sense to use a fulfillment model. Buying your product in bulk for cheap and then letting someone fulfill it for you is probably the most reliable way to go. I've been using Librex Fulfillment for all my fulfillment needs.