Dealing with all this, while continuing to remain competitive and provide great customer service, can be a tough balancing act.
So what do you need to think about when deciding if you should outsource your warehouse and fulfilment?
Reduced wasted spend
Running a warehouse is expensive. Staff, property, rates, IT, forklifts, security, health and safety, insurances, racking… the list goes on. What’s more, the fluctuation in demand for your products will mean that most of the time you’re either spending too much or not enough on these overheads. Warehouse outsourcing not only removes the daily grind of the above, but is also a much more cost-effective option compared to running your own warehouse; you only pay for the space and time you actually use on a weekly basis.
Reduced carrier costs
This is where using a specialist fulfilment and warehouse company really makes sense. Finding a cheap and suitable courier for all your differently sized and shaped goods of varying weight can be time-consuming, expensive, and you could end up spending more than you need to if you don’t do enough shopping around. But due to the vast amount of packages a fulfilment company sends each day, they benefit from bulk discounts and often pass these savings on to you.
Improved flexibility & scalability
The warehouse is a necessary evil for pretty much all retailers and ecommerce businesses. Rapid growth and an increase in overheads is a side effect for any successful company. But with outsourcing, this is something you can take control of quickly. To put it simply, you pay for what you use. No rents to quibble, no staff to source just add/remove stock. As your footprint grows, so does your business.
Reclaim your valuable time
What if you could concentrate on working on your business, instead of working for it? Outsourcing your warehouse fulfilment allows you to focus on growing your business, and doing the things you’re most passionate about. While you are reaching out to your customers, upping your marketing activity, or developing your new product range, your orders are being picked, packed and shipped without you lifting a finger. The entire process is automated from the moment the customer purchases your product. All whilst keeping your costs low, and customers satisfied.
Nobody likes processing returns, especially when you have other important things to be doing. Unboxing items, checking, re-boxing, restocking, is very time-consuming and doesn’t help you drive your business forward. Most outsourced fulfilment companies will have a dedicated team to deal with this on your behalf. Be sure you cover this cost at the start of your partnership.
Staying in control
It is important to maintain access to everything that is happening with your stock at any time. Not only will a 3PL system allow you to stay in control, it may give you more information than you currently have. 3PL systems like Vdepot can give you different types of reports, like your quickest and slowest moving items, prompts to re-order stock, and other insights that make it easier to manage your inventory.
Online stock/reporting systems are key to keeping your finger on the pulse of your business, and put you in a better position to answer queries from your customers/team about your orders. Your account on Vdepot’s system can be accessed from anywhere to keep you up to date in real-time. Tracking parcels, minimum order alerts, stock movement and detailed reports should be accessible whenever you need them.
If you’re still undecided on whether to pass your fulfilment on to a 3PL it may be beneficial to outsource a small number of products, typically the items with the biggest throughput. By trialling a few products first you get to understand the benefits before having to make the big jump of outsourcing completely. You can then move more products over to them as you feel comfortable.
Many 3PLs like Vdepot allow you to trial a few lines first and may even offer favourable terms as a trial period to really allow you to see the benefits of outsourcing.
So does warehouse outsourcing make business sense for you?
Whether you should outsource your warehouse & fulfilment really depends on your business circumstances. If you have high order volumes, your product sales really fluctuate depending on the season, or even if your product requires quality checking/gift-wrapping/reworking, it can make business sense to consider entrusting a specialist company.
What you should not do, is shy away from is finding out… it may seem daunting and time-consuming, but really, the process can be quite quick and painless.
If you would like to know more about how we operate, costings and how we can implement any of the above, please get in touch with our team.