5 Reasons to Outsource Fulfillment Services – and Save Money
~by Lizzie Weakley~
As a subscription business grows, outsourcing becomes a more and more attractive option for fulfilling orders. Although outsourcing may seem unattractive on the surface, it has many benefits. Outsourcing is used by large retailers to make a better profit and obtain revenue with better margins.
Besides, putting too much focus on receiving, packing, shipping, and space needed is not conducive to maximizing profits. Smaller subscription businesses can follow the lead of large retailers and possibly find the same success.
There are several reasons why this outsourcing facilitates so much success.
1. You Can Do More Important Things with the Time You Don’t Spend Packing Boxes
Order fulfillment is not actually a key component of a subscription business. In reality, it’s simply an expense that takes up a lot of time. This is time that can be spent optimizing client/customer experience, marketing or developing your product(s).
Besides, fulfillment can be more complex than it appears. However, consider that fulfilling orders is actually a key component of fulfilment services. By outsourcing to an expert service, you’ll gain time to focus on other aspects of your business, ensure that orders are fulfilled more accurately, and actually save money.
2. It Saves Money on Supplies
A lot of money is spent on packing and shipping materials, such as bubble wrap, peanuts, shredded kraft, kraft paper, tape, shipping labels, cartons, boxes and more. However, with a dedicated fulfillment center, all of these items can be purchased in bulk. This will save you a lot of money, thus benefiting other areas of your business.
3. You Don’t Have to Pay for Space
Renting space can be expensive and essentially a waste of money in a couple of ways:
1) It’s possible most of the space won’t be utilized or will be incorrectly utilized.
2) The space will seem to be the right size, then once you fill it with cartons, boxes, products, and even packers, you’ll find that there’s not enough room to work in an organized and efficient manner.
There is one thing wrong in both of these scenarios: The space will only be needed one to one and a half weeks out of the month, so downgrading or upgrading won’t offer any financial benefit. When calculating out the costs of a full month’s rent, finding a new space just won’t make sense.
4. Saves Money on Shipping
Fulfillment outsourcing can give you access to cheaper shipping rates, thus saving money for your business. These small savings on every order can add up to large savings in the long run that are evident in your bottom line. The money saved may even cover the costs of outsourcing. Additionally, outsourcing means you only pay for the space used by your business. So, you’ll be provided with a managed partner and a scalable space.
5. They Have the Technology You Don’t Have
What many business owners don’t realize is that it takes expensive technological systems to operate an efficient and accurate fulfillment center. Fulfillment facilities have the technology to capture core data points, like intake quantities and order tracking. This gives you the space to communicate with customers in a more accurate and timely manner. If you don’t outsource, then you may lose a lot of money if certain issues pop up, such as losing track of shipping orders or inventory by using the wrong shipping method.
Outsourcing fulfillment of orders may not be for every company, but for many it certainly should be a consideration. It effectively streamlines your order fulfillment process, saves you money, and gives you extra time to concentrate on other more important areas of your business. Truly, most business can benefit from outsourcing fulfillment of orders. However, if you’re still skeptical, just find someone you trust and do the math for outsourcing your fulfillment needs.
Meet the Author: Lizzie Weakley
Lizzie is a freelance writer from Columbus, Ohio. She went to college at The Ohio State University where she studied communications. In her free time, she enjoys the outdoors and long walks in the park with her 3-year-old husky, Snowball.