Order fulfilment can be the life blood of the company or the kiss of death depending on how it is done and how adaptable it is. But the decision to outsource your fulfilment to a third party is not one that any business takes lightly.
Like entrusting your children to a babysitter for the first time, there is a lot of reassurance required before you feel ready to let go.
So, when is the right time to make the switch? And who is outsourcing their order fulfilment?
When To Outsource Your Order Fulfilment
Here are 7 top indicators that it might be time to start considering outsourcing your order fulfilment:
You are searching for a larger premises
If you are searching for a larger premises to cater for growing sales and stock volumes, it’s a good time to get a quote from a few potential order fulfilment partners. It could be the best thing you ever do for your business.
Your cart abandonment rates are high
If customers like what they see on their product pages but turn away when they find out your shipping terms, it’s a good indication that your fulfilment is costing you sales and an order fulfilment partner should be able to help.
Your conversion rates are low
Customers demand more these days. If you’re confident in your products but you can’t seem to get the conversion rates you expect, there’s a good chance your delivery options and shipping times are putting people off. While you’re looking at ways to improve these, it’s a good time to speak to an order fulfilment partner about the options they can provide you with.
“Our daily orders increased by 49%, inbound enquiries decreased by 60% and our next day delivery rate increased from 55% to 100%!”
– Cari’s Closet, 2020
You think your fulfilment costs are high
If you think your costs for shipping, storage, premises, insurance, personnel, or returns is high, the likelihood is they are only going to go one way from here. If it’s time to re-evaluate your costs, it’s also a good time to get a quote for outsourced order fulfilment to compare.
Your standards are slipping
If your order processing times or delivery times are creeping up or your order picking accuracy is starting to slip, it’s a good indication that your in-house team is under increasing pressure to fulfil your orders.
This usually means a further investment in person-power or a comparison of the courier options available so it’s also a good time to include a quote from a good order fulfilment company as well.
Your customer support and returns teams are swamped
An increasingly active support team is a good indication that there’s increasing demand for what you’re providing. But if they are rushed or struggling to keep up, there’s a good chance that your potential customers aren’t getting the brand experience you need to deliver. If you’re looking to expand your customer support or returns team then it’s likely going to be a good time to compare an outside quote with the costs of an additional salary.
You’re expanding fast or planning to expand
If you’re planning to expand your company and grow your sales, speaking to an outsourced order fulfilment partner should be top of your list of priorities. Not only can they quote you for order fulfilment, but a good partner will be able to advise across all areas of growth planning.
Who Is Outsourcing Their Order Fulfilment?
Outsourcing order fulfilment is not a new phenomenon. In 2002 a study showed that 46% of Fortune 500 companies outsourced at least some aspect of their order fulfilment and in 2017, this figure had increased to 90%.
But it’s not just big players that are outsourcing their fulfilment, small and medium sized companies that are targeting growth are following suit, and to great effect too.
Small Companies Outsourcing Order Fulfilment
From the outset, small ecommerce companies tend to have manageable levels of sales, but as soon as they start to scale, they start facing the same challenges as every other growing company.
So, new premises are bought or leased, staff are hired and more stock is kept on hand. But costs mount, margins shrink, time becomes a premium and processing times can start to slip all the same.
And all the while, time, energy and resources are pulled away from improving this growth in sales.
“Working with ParcelPlanet has really allowed us to scale and build more efficiency into our supply chain.”
– Hunt Office, 2020
Savvy small companies are starting out with an outsourced fulfilment partner to keep their focus on generating sales and not on the logistics of order processing. The right order fulfilment partner will not only take care of the order fulfilment process but will also help you to evolve your growth strategies and planning.
Medium Sized Companies Outsourcing Order Fulfilment
Medium sized companies are also moving to adopting an outsourced order fulfilment approach to grow to the next level. Medium sized companies tend to have their premises, workforce and processes already in place so usually consider outsourcing when the time comes to expand in order to cater for their growth in sales.
The right outsourced order fulfilment partner can provide these companies with a smooth migration processes, allowing them to move their stock offsite in a quick and controlled way while reducing their costs and enabling them to redistribute their workforce and their annual spend across other areas of their business.
Industries Adopting Outsourced Fulfilment Solutions
While outsourced order fulfilment is becoming increasingly popular across all industries, there are a number of sectors currently moving en masse to third party fulfilment partners:
- Fashion & Apparel Sector
- Beauty & Cosmetic Product Sector
- Pet Supplies Sector
- Giftware Sector
- Jewellery Sector
- Office Product Sector
- General Electronics Sector
- CDB Sector
- And many many more…
Speak To A Customer Success Manager Today
If you are looking for a quote for your order fulfilment, arrange a time to speak to one of our Customer Success Managers today. Email us at email@example.com, or call us on +353 1 902 9510 (Ireland), or +44 1 6043 00340 (UK).