Order fulfillment by you might be a huge hassle. Because of this, many forward-thinking business owners hire us to handle their order fulfillment on their behalf. People engage in such behaviour for the multitudinous conveniences it provides. Yet, you may not be aware that savings can be realised through outsourcing fulfillment as well.
The question is, “Why outsource fulfillment?”
We’ve already discussed the symptoms that indicate it’s time for your firm to outsource fulfillment to us. For the sake of brevity, we’ll summarise an in-depth piece available at this link.
There are six main causes to use a fulfillment outsourcing service:
- Your number of clients is expanding quicker than you can meet their needs.
- So many orders have come in, and you’re either running behind or making mistakes.
- Overtime is being put in by staff due to shipping demands.
- Managing fulfillment is adding unnecessary complexity to running your business.
- There’s no more room.
- You need to find a way to cut costs.
This last reason, especially in a recession, may be the most compelling of the bunch. It may come as a surprise to learn that we rarely broach the subject.
Just asserting “the service costs less than postage and supplies” isn’t enough to justify the cost savings in order fulfillment. Costs associated with running a business on a daily basis can quickly add up, but outsourcing fulfillment to a third party can help you save money.
There are Other Cost-Reduction Opportunities Associated with Outsourcing Fulfillment
In spite of this, even if you only send a small number of things (say, 50-100 per month), you may still benefit financially from employing a third-party fulfillment service. This is because outsourcing will save you money on incidental expenses.
1) More efficient division of labour
The cost of employees is likely to be a company’s single largest expenditure. Indeed, people do need to make ends meet with the money you provide them.
Yet, spending too much money is guaranteed when employees’ time is wasted on something that doesn’t offer value to the company. Even if you only mail two orders per day, that might take a lot of time. Items need to be packaged, and either printed or purchased postage and mailed. That’s an hour or two a week, which may cost anywhere from $15 to $30 a week, or $60 to $ 120 a month, even for a low-cost staff.
2) There are no fees associated with obtaining materials
Anything that needs to be packaged outside of the item itself, such as bubble wrap or a Postal padded envelope, may incur additional fees. The supplies can be acquired for a relatively small investment of time and money. With outsourcing, these costs are typically rolled into the far more predictable pick and pack rates, with the exception of any premium packaging you may require.
3) We have decreased company complexity and improved process efficiency
This is a bit more theoretical, so please digest it. It’s easy to lose track of what you’re doing if your business is extremely complex. For that reason, prioritisation is incredibly challenging. Constant mental distractions prevent you from focusing on revenue-generating ideas in the workplace. Who knows what the ultimate cost of it could be.