When is the Right Time to Switch to Outsourced Fulfillment?
July 20, 2021
As an eCommerce business, you need to understand your business’ strengths early enough. Knowing where your business excels will allow you to deploy more resources in that area to give you a better competitive advantage while outsourcing other areas of your business. One thing is certain, as your business continues to grow, some areas of your business that you handled in-house may have to be outsourced. Order fulfillment will most likely be one of them.
Order fulfillment is essential. Sherpack: order fulfillment solutions notes that there are many reasons why you need to perfect your order fulfillment. Some of the most important reasons include;
It Affects Your Product’s Availability
Order fulfillment gives you an accurate account of the availability of your product in the market and helps you ensure that stocks are replenished before they run out. When customers can’t find your product, they’re more likely to choose a competitor. When this becomes a recurrent problem, customers will shift their brand loyalty from you to another. This will cost you a lot of money. By perfecting your order fulfillment process, you can ensure that customers continue to get a steady supply of your product.
It Affects the Quickness of Product Delivery
Order fulfillment dictates how fast your products get delivered to the consumer. If your order fulfillment process is lagging, customers are more likely to suffer delayed delivery. This may lead to a lot of canceled orders.
It Affects your Bottom Line
Your business’s ability to generate revenue depends on how happy you can keep your customers. To keep your customers happy, you need to have a fast, effective, efficient, and seamless order fulfillment process. The higher the capacity of your order fulfillment, the better the chance to grow your business and meet your customer’s needs and
In-House vs. Outsourced Fulfilment
This situation exists when you have an in-house team or a department within your business to handle your order fulfillment needs. This team is in charge of everything from receiving sales orders to product selection, product packing and packaging, tracking, and addressing customer complaints. The department also handles return orders and damaged deliveries. While the in-house team and department offer you valuable information at the start of your business, you’ll soon find that the department has become expensive to maintain.
This situation requires you to contract a company to handle your order fulfillment needs. An advantage of this decision is that the fulfillment company has more staff. Outsourcing your warehouse, fulfillment, shipping, and even returns is a great way to free up overhead costs to invest in other areas of your business. This means that they can handle your order fulfillment needs faster and at a fraction of your in-house cost. This company will receive orders and handle all of the processes involved, from order pickup to order delivery. You get to enjoy better tracking, faster delivery times, improve customer satisfaction, reduce cancellation rate, and more.
When to Outsource your Order Fulfilment Needs
There is a huge difference in cost, efficiency, and effectiveness of order fulfillment processes when outsourced and handled in-house. Considering when to transition to an outsourced order fulfillment process, below are some pointers.
Your Delivery Standards are Slipping
If you already run an in-house order fulfillment department, you should know that the more orders you get, the more backlog you have to deal with. Customers expect their products to be shipped out to them as fast as possible. If your business is unable to do this due to a heavy backlog, more customers will leave negative reviews and cancel their orders. Save yourself from the chain reaction that comes with slipping delivery standards by outsourcing.
High Cart Abandonment Rate
Consumers want their products as fast as they have paid for them. If you notice a high cart abandonment rate, it may be because buyers aren’t happy with the delivery time you’ve quoted. By outsourcing, you can significantly reduce your delivery time. With an outsourced order fulfillment solution, you can offer various delivery combinations, satisfy more customers, and rake in more revenue.
Seller Ratings are Dropping
Consumers are more likely to rate your business down if you are unable to meet up with your delivery promises. A bad business rating isn’t good for your revenue. More potential customers will tend to move away from you once your seller rating begins to drop. A good way to fix the problem is to take your logistics and order fulfillment needs to the companies with the resources to make it faster. If you can deliver in a few days to customers, you have their heart, money, and attention.
Low Conversion Rates
High cart abandonment rates are often associated with logistic problems. A business that has close to a 70 percent cart abandonment rate will have a low conversion rate. To address this problem, offer consumers what they want. Outsource your order fulfillment process and help customers stay on top of their purchase till it gets to their doorstep.
Also, you can read: A Call Center And Outsourcing Experience!