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You own a small business and you’ve developed great products. You’ve established your eCommerce site and invested your time and money in marketing and gotten your customers.
Here comes the crucial part: order fulfilment.
Order fulfilment doesn’t sound like an exciting part, while isn’t mentioned in the sales process, it’s one of the most critical components of keeping consumers loyal and building your business to succeed in its goals.
For small to medium-size businesses, self-fulfilling orders can consume a significant amount of employees’ time.
A typical eCommerce order fulfilment process involved the following:
- Customer service: communication with customers regarding the orders
- Process the order in the warehouse: putting together mailer boxes and printing labels
- Picking and packaging the product
- Delivering it to the consumer
While that sounds a bit to handle, there are other situations that might happen during the order processing and delays the shipment. For example, dealing with a printer jam, making emergency trips to Costco for getting packaging tape or printer inks, or locating (and counting…) the inventory while something looks off……
While these tasks can consume significant time, imagine if an order is late or you fail to communicate effectively with the customer, they are unlikely to come back.
The good news is that you don’t have to handle everything on your own. This is where the choices are made. You have the option of keeping the order fulfilment process in-house or outsourcing it to a third party logistics company. Now that you know what goes into order fulfilment, keep reading to learn more about the advantages and disadvantages of self-fulfilment and 3rd party logistics and find out which works the best for your business.
Pros of self-fulfilment
You have entire control when you pursue self-fulfilment. Self-fulfilment can save some money for start-ups, although it may cost more money in the long run. With self-fulfilment, you can monitor the order processing and shipment, and put keep an eye on labels and packaging and branding procedures.
Cons of self-fulfilment
Self-fulfilment, as we have discussed, can save money for small businesses and allow them to maintain control over the order fulfilment process, but time-consuming. As your organisation is responsible for the entire process from packaging to shipping for all of the merchandise. That could potentially increase your costs if not managed appropriately, as more resources are required with the growth of your business. For example, you’ll have to pay for the warehouse or extra storage, hire and manage new employees, and invest in packing equipment and software or system that keep everything organised.
Pros of Third Party Logistics
One of the obvious advantages of third-party logistics is that it saves time. Then you can have more time to devote to product development, sales, website building, and marketing. Because a third-party logistics company specialises in supply chain management, organisations have more flexibility and scalability when it comes to using supply and distribution capabilities as needed. There are no redundant investments or underutilised resources while sales are low, and enterprises can scale up when demand spikes.
On the other hand, in today’s complex global market situation, it’s tough to foresee and accommodate internal expertise in all the capacities and regions required. While a 3PL service provider can help with transportation paperwork, import and export, international compliance, and international compliance and economic rules. Businesses looking to expand into new segments or new areas can take advantage of their partner’s logistical knowledge and know-how, which can help them avoid costly delays, improve cycle times, and make the move to a new market easier.
Cons of Third Party Logistics
In turn, you may have to make sacrifices in terms of full control and packaging quality. However, this should not be a problem if you do your research and choose a reliable logistics partner.
For small businesses and start-ups, another advantage is that using a 3rd party logistics may cost more money than in house fulfilment.
When should you choose third-party logistics?
Partnering with third-party logistics is suitable for eCommerce businesses that sell their own unique products and reach a point where they have increases in sales rapidly. If you don’t have enough staff or resources to handle the increasing orders, that’s where the decision comes in.
It will be a good point to outsource your logistics to a third-party logistics partner as s long as your products aren’t customised for each customer.
When comparing self-fulfilment to third-party logistics, you will need to consider factors of cost, quality, and control.
Ask these questions to help you make a good decision.
What is the position of your company right now?
Do you have the manpower or resources to complete the order fulfilment yourself?
Do you really need the entire control of your order fulfilment?
Which is a better option for your business: investing in new infrastructure or system or partnering with a third-party logistics?
The bottom line is, that you can change your fulfilment process whenever you want. Most third-party logistics in Canada have the infrastructure and are efficient enough to accommodate your business’s needs.
Looking for the right third-party logistics partner in Canada? SPExpress Fulfillment helps businesses streamline their shipping procedures by providing infrastructure and much-needed knowledge. To learn more about our services, click here.