Order fulfilment is one of the central elements of successful ecommerce. Moreover, for most businesses, there is a lot that is expected from customers. You can blame (or thank) the likes of Amazon and eBay for this.
With every order fulfilment innovation these companies make – from next day delivery to super-expediated same-day delivery and efficient returns services – the bar is raised and everyone else must keep up. However, Amazon doing something like this is one thing, but smaller ecommerce ventures might not have the resources.
As it happens, many of these services can be offered – and pretty affordably – through third-party order fulfilment services. Nevertheless, the very smallest ecommerce companies very often do not use such services. There is a good reason for this – they have limited inventory and can prepare packages in-house. Furthermore, their customers often understand that you do not get these types of delivery perks from a small company.
When an ecommerce company begins to grow though, there is an imperative to start outsourcing fulfilment before long. This is simply because growth means larger inventory, which means that fulfilment simply cannot be offered in house. This has led to the type of situation whereby outsourcing fulfilment is a sure sign that a company has started to make strides and that growth is on the way.
Nonetheless, the precise point when fulfilment should be outsourced can sometimes be difficult to figure out. Do it too early and you could find yourself beleaguered by excessive costs that threaten cash flow and the continued growth of the business.
Therefore, it is incredibly wise to try to determine just when it’s time to outsource fulfilment. By the same token, it’s also important to consider the signs that you might not be ready to do so yet – or that you simply don’t need to outsource fulfilment at this stage.
Shipping and Handling of Texas, a company specializing in ecommerce fulfilment, say that one of the reasons companies often make a mistake in determining the point when they should outsource is that they focus too much on the potential benefits and not enough on the warning signs that they should hold off for now.
When Not to Outsource
Beyond simply not being ready, it is also with considering that there are indeed advantages to keeping things in-house. As mentioned, there’s a real charm to this for some businesses. Here follows then some reasons you shouldn’t outsource.
1. You Want to Keep Control of Operations
Outsourcing could cause you to lose control and visibility of operations. You have much more potential to add the personal touch when you handle it yourself which, for some types of businesses, can be a serious advantage and reinforce brand identification.
2. You Value Brand Consistency
When you outsource fulfilment, it is no longer only your name on the product. Small business does not have this problem, and neither do exceptionally large ecommerce businesses. The majority in the middle, however, will show their brand on the product but another on the packaging, which is the first thing customers will see.
3. You Don’t Want to be Dependent on Another Company
Another reason not to outsource is that you don’t want to be dependent on the prices and relative fortunes of the fulfilment services. They could put their prices up or offer a setback – and that affects you.
Of course, the primary reason not to outsource is simply that it is not time yet. This is okay and there is no problem trucking along until your inventory increases and you secure a stable cash flow. The point is always to grow – but not too early.