When is the right time for eCommerce businesses to outsource fulfilment?
We have all heard of the entrepreneur who tries to do everything themselves. Entrepreneurs like this have many reasons for not wanting to let go. For some they do not want to pay the money to outsource part of their operations. Others do not trust others to do things as well as they would. For some, it is an excuse not to get involved with more scary tasks such as expanding their business.
Each of these is a poor reason to keep doing something yourself. The right outsourcing partnerships save money rather than cost money. The right partners will also be able to do things more efficiently and to a higher quality standard than the entrepreneur themselves. Every entrepreneur should be encouraged to work on expanding their business rather than staying in the comfort zone of operations.
When it comes to eCommerce retailers, this problem becomes even worse. Reworking, packing and distributing products is a time consuming business. So is dealing with returns. There are also several eCommerce start-ups where personal homes have no more space as they are used for warehousing!
Outsourcing fulfilment and distribution should be undertaken as soon as possible
Ecommerce companies that begin their outsourcing journey straight away are able to focus on building up the right brand and creating the right relationships with their audience and customers. They have a much better chance of controlling a powerful business pipeline. They will be on track to achieve the right sales and targets.
Ecommerce companies that try to manage their distribution and fulfilment themselves will struggle to achieve the same results. They will be caught up in endless operational issues. They won’t have time to build the right brand or audience.
All eCommerce companies should be focusing their in-house efforts on creating the right offering and building a powerful brand. It is the key to building a successful eCommerce business. Trying to manage distribution and fulfilment in-house only distracts from this task.
Some businesses feel that this is good advice for start-ups. However, they feel that it is a different story when a business has grown.
Surely larger businesses should bring these operations in-house?
It can be argued that larger business have enough size to make it worthwhile to manage distribution and fulfilment themselves. Surely, bringing this in-house saves costs?
In reality, this is rarely the case. Firstly, there is a big investment involved in bringing these operations in-house. For instance, you will probably need a warehouse. Next, the time and energy involved in this will take focus away from that all-important brand building and product focus.
Finally, the projected savings are much harder to achieve than it may at first seem. For instance, no matter how large you are, you are unlikely to have the volume to be able to gain distribution costs that are anywhere near those that an outsourcing partner can achieve. Equally, you may not have the in-house skills or IT to work out the best mix of distribution partners.
Maybe it is time to reconsider the benefits of running these operations in-house.
So what happens if you running things yourself at the moment?
It is still not too late to outsource! A good distribution and fulfilment partner can help you, no matter what stage of your journey you are at. They should be able to help you transition your operations seamlessly.
Some of the things to consider are whether a supplier can make sure that their IT systems can cope with the solution that you have created in-house. Also, how will they deal with your warehouse space and staff? Finally, they should be able to map out the savings that they can bring to your business, both in terms of reduced overheads and reduced costs of operation.
It is always the right time to look at outsourcing distribution and fulfilment
As we have already outlined, we would recommend that you do this as early as possible. However, this does not mean that you should feel that you have missed the boat if you are managing an in-house operation at a later point in your company’s journey.
Remember the importance of focusing on marketing, brand and product. Outsourcing your fulfilment and distribution allows you to concentrate on this, no matter what stage you company is at. Whatever happens, don’t be like the entrepreneur who tries to do it all himself!
About Parcelhub – Tailored Fulfilment and Distribution
Founded in 2009, Parcelhub is a privately owned and operated provider of tailored fulfilment and distribution solutions. Growing 40% in financial year 2016/17, Parcelhub is experienced dealing with multichannel retailers, global brands, printers, publishers and agencies worldwide.
Parcelhub’s dedicated account management team has a wealth of experience dealing with a broad range of complex fulfilment projects. Solutions include eCommerce shipping and fulfilment, printed matter fulfilment, picking and packing.
Powered distributes over 6 million parcels annually via a carefully selected range of carrier partners.