One big decision that growing eBay companies will have to make is whether to outsource order fulfilment. On the one hand, it can save you a huge amount of time, and can be cost effective if you choose the right company, but on the other it’s not a perfect fit for all businesses. Here is a list of the pros and cons of outsourced order fulfilment along with some tips for choosing the right fulfilment company.
More time for your business: If your business started on eBay, you’ve definitely had the experience of late nights packing, labelling, and sending out products. Not to mention the sensation that order fulfilment is taking over your life and taking you away from what you love about running a business. Outsourcing will put the nitty-gritty of logistics in the experienced hands of an order fulfilment company, and give you more time to focus on growing your business.
Efficiency and transparency: Nearly two-thirds of participants in an Office of National Statistics survey responded that a poor standard of delivery is the worst problem for an online retailer to have. This means if you’re worried about your ability to handle order fulfilment in-house; because you don’t get orders out in a timely manner, or you don’t have a system for keeping customers updated about shipping and delivery times, you should consider outsourcing.
Shipping mistakes: The Office of National Statistics survey found that 87% of online shoppers would switch retailers after just two shipping mistakes. Outsourcing to a fulfilment company doesn’t always mean fewer shipping mistakes, but the best companies can guarantee a very high accuracy rate, which will mean more customer satisfaction and more stars in your eBay reviews.
Access to better technology: Not only are they the pros, order fulfilment companies also have the materials to get the job done right. It costs a huge amount to buy, maintain, and upgrade warehouse equipment and shipping technology, and many small businesses and start-ups can’t afford to pay for the right stuff. Outsourcing gives you access to the professional equipment used by your fulfilment company, and the cost is all bundled into the fee you pay for their services.
Lower overhead costs: eCommerce companies often have significant spikes and lulls in terms of sales throughout the year. Revenues go up and down, while overhead costs stay fixed. Companies that keep their order fulfilment in-house have much higher overheads, because they need to keep paying warehouse workers as well as rent and utilities at their facilities, even during the low season. Outsourcing order fulfilment will mean these overhead costs disappear, and you pay the fulfilment company when you need their services.
Not right for all products: While outsourced order fulfilment is great for packaged, mass-produced products like toys, electronics, and clothing, it’s not right for everything. If you sell one-of-a-kind items or things that are handmade, it’s probably best to keep your order fulfilment in-house. That said, some fulfilment companies like Mail Workshop specialize in packaging and shipping unique and made-to-order items and may make the switch to outsourced order fulfilment cost effective.
There are lots of third-party order fulfilment companies out there, and it may be difficult to know which ones will actually save you time and money while boosting your customer satisfaction. Here are some things to keep in mind when you’re evaluating order fulfilment vendors.
1. Free trials: Some vendors allow you to send a few trial products to them and have them routed back to your business for free. This will let you know what your customer will experience if you decide to outsource order fulfilment.
2. Hidden costs: Not all vendors are transparent about the costs of their services. Be sure to ask up front about things like volume commitment and long-term agreements. Certain conditions will defeat the cost-saving purpose of having outsourced order fulfilment.
3. Customer support: Part of the order fulfilment company’s function should be to handle customer complaints about shipping delays and damaged products, so be sure the vendor you choose offers sufficient customer support.
4. What’s right for your business: Your needs will change as your business grows. So be sure to pick an order fulfilment company like Mail Workshop that is adaptable to a range of eCommerce needs, from hand-packing and bespoke product assembly to bulk parcel distribution for business.Parcelhub helps over 500 eCommerce, eBay and Amazon retailers save time and money on their high volume parcel delivery, while their sister company MailWorkshop provide end-to-end fulfilment services to a wide range of UK and international multi-channel eCommerce retailers.