Are you a new business owner who recently heard about outsourced fulfillment processing and how it is making running a business for so many others so much easier? Well, then we are sure that you must have been intruiged to know more about it.
If that is the case, then you have landed on the right page. Hop on below to read a detailed guide on what outsourced fulfillment is, its benefits, and how you can choose the best outsourced fulfillment company for your business with ease.
What Is Outsourced Fulfillment?
There can be times when several businesses might find it difficult to juggle multiple aspects of managing a business. In such cases, the said business resorts towards outsourced fulfillment. Wondering what it is?
Well outsourced fulfillment or outsourced order fulfillment is a term used when a business hires a third-party logistics company to manage all or a few aspects of their business’s order fulfillment processing like inventory management, packaging, storing, etc.
Apart from providing proper order processing, outsourced fulfillment companies can also help businesses expand into the international markets and surpass customs, all while ensuring that the goods are delivered on time.
Key Components of Outsourced Fulfillment
Outsourcing fulfillment might seem like an efficient one-step task of managing and completing orders. Still, it, in fact, requires a series of components put together to achieve beneficial results. Here is an insight into some of the important key components of outsourced fulfillment:
Product Delivery
It is not necessary for you as a business owner to first get your business goods delivered to your warehouse from the inventory and then send it to the fulfillment center.
In fact, product delivery can be made directly from the manufacturer to the fulfillment company, which can then further ensure that all received goods are of top quality. This makes the purchase and delivery process a hassle-free experience for the business owner, enabling them to focus on other aspects of their business.
Processing Inventory
Once the goods are received, the outsourced fulfillment company will ensure their quality and inspect them for any damages or missing items. Once the quality is assured, the goods would then be sent for sorting and storage. The outsourced fulfillment company also keeps tabs on the available products and the goods left in smaller quantities to ensure that they keep the business owners updated on what products would need re-fulfillment from the vendors.
Routing Orders to your Fulfillment Provider
While sorting and storing products is one aspect, handling the packaging and shipment is another component of the outsourced fulfillment company. When a customer places an order with the business associated with an outsourced fulfillment company, the order is directly routed to the outsourced fulfillment center. The company then manages that order through different e-commerce platforms, POS systems, or order management software.
Order Shipment Processing
The orders, when received, are then picked and packed to be shipped off. The outsourced fulfillment company ensures that the correct items are picked and safely packed as per the order requirement. They then move on to sealing the boxes, weighing and labeling the order for shipment to ensure safe and timely delivery of the order to the customer. This benefits the business as customer satisfaction remains top-notch, and there are fewer chances of return requests.
Managing Customer Returns
No matter how perfectly you work, there will always be times when a customer comes in with a complaint and demands to return their products. Hence, a proper customer return management scheme should be in place for any well-operating fulfillment center.
In this particular management component of any outsourced fulfillment center, the customer ships the products to the fulfillment provider, who then inspects the package and approves it for a refund. The returned item can then be placed back into the inventory, put up on a clearance sale, or simply donated for a better cause.
Benefits of Outsourcing Fulfillment
When running a business, there are a number of factors that you have to look into in order to ensure better profits and smooth operations. Choosing an outsourcing fulfillment provider is a great strategy to pick in order to provide this and several other benefits. Some of the benefits of outsourced order fulfillment are:
Significant Cost Saving
Every business tries to cut down on its overall cost without having to compromise on the quality of its products. With an outsourced fulfillment company, this aspect is quite easy to achieve.
When you have an outsourced order fulfillment company on board, you will not have to worry about renting out a warehouse space for your goods. Your products can be delivered directly to the outsourced company from the manufacturing. Apart from this, businesses will also not have to hire an in-house team, saving them costs in this aspect, too.
Scalability and Flexibility
If there is one thing no one can deny, it is that e-commerce order volume can massively fluctuate depending on the time of the year. A major spike in the order volumes can lead to inconsistent handling of the orders, but with the order fulfillment company, this would not be something you would have to worry about. Outsourced order fulfillment companies are flexible and adjust to operations without having to change infrastructure.
Focusing on Core Competitors
Another exceptional benefit that outsourced fulfillment companies provide is the ability to offer innovative ideas for new product development to keep customers engaged. These companies also serve great marketing strategies for business to grow their brand for the better, providing them an edge over their core competitors in the market.
Better Global Reach and Expertise
All businesses want to step out into the international market sooner or later. With the outsourced order fulfillment company, this dream can easily become a reality. How so? Well, outsourced fulfillment companies can provide businesses a way into the international market with their already established global reach and expert advice. Moreover, they can also help enterprises through customers and proper cross-border shipments and regulations.
When You Shouldn’t Outsource Fulfillment?
While outsourced fulfillment provides a number of benefits, there are times when businesses should opt out from choosing this aspect for their business. What are these? We have a few of them listed for you below:
Unable to Give Up Control
Choosing a third-party service provider means that you will have also to put your trust in their hands. If you are someone who has trouble giving up control or wants their staff to handle everything, then choosing an outsource fulfillment might not be the best pick for you.
Insist On Personalizing Orders
If your business products has customization on order to order basis, like handwritten notes, gifts with stickers or cuttings, then choosing a 3PL service might not be the best pick for you. This is because order fulfillment or 3PL companies usually use standard packaging of branded boxes for all orders that are sent out.
Low Sale Volumes
If you are a small-scale business whose current order volume is enough to be managed on your own, then you should carry on with this approach only. Why is that? Well, this is because smaller businesses usually have a low-profit margin, and when you refrain from outsourced order fulfillment, your cash flow will generally increase.
How to Choose the Right Outsourced Fulfillment Partner?
Now that you know all the advantages and disadvantages of hiring an outsourced fulfillment partner, the next approach would be to understand how you can choose the best one. If this is the case for you, then here is a small guide on how to choose the right outsourced fulfillment partner:
Location
It is advisable to keep your delivery region in mind before you choose an outsourced fulfillment provider. Ensure that you select a provider who can easily deliver your products to your customers no matter where in the world they are.
Scalability
When choosing a provider, ensure to look into their ability to adjust according to the conditions. Any provider which can accommodate to the seasonal fluctuations and hike in volume along with your business growth is a great pick to make.
Cost
Cost is also a major factor to consider when choosing an outsourced fulfillment center. Ensure whether the services of a particular 3PL will benefit you or you will have to look at other options in the market.
Outsourced Order Fulfillment with NextSmartShip
With all of this clear, you must be wondering which outsourced fulfillment company you should choose for your business. Well, if that is the case, then let us recommend one to you.
NextSmartShip is one of the leading outsourced order fulfillment companies in the business. It has a great record of delivering high-quality goods safely and attaining utmost customer satisfaction. With over 10 fulfillment centers, 400 plus shipping lines, and a guarantee of at least a 40% reduction on your cost, NextSmartShip is undeniably a top pick for all businesses out there.
Conclusion
If you have heard about the outsourced order fulfillment provider and want to know more about it, then we hope this article was helpful for you. While there are several outsourced fulfillment companies out there, one of the leading names is NextSmartShip. The company is renowned for timely and high-quality deliveries, making business operations so much smoother. So, make sure to check out its website.
