Most start-ups and small companies start by fulfilling their own orders—even from their own offices, basements, or garages - but as they grow, the logistics involved can become much more complex and require more money, more space, more time, and lots more headaches.
Enter third-party fulfillment services. These are companies that complete the order fulfillment steps for the growing business, entrepreneur, or online seller, removing the day-to-day challenges of having to pull orders, maintain a warehouse and staff, deal with inventory discrepancies and chargebacks, etc. Third-party logistics (or 3PL) companies don’t just save headaches, there are many economic reasons to outsource this part of a business.
#1 Save on Safe Warehouse Space
Storage space, inventory, and quality employees can be a big part of your company’s expenses.
Yet if you have a product to sell, you need a place to store it—one that’s easily accessible, affordable, safe, and scalable. That kind of space can be difficult, if not nearly impossible, to find.
Access to a safe warehouse is one of the top cost-savings benefits of third-party fulfillment and provides affordable access to:
- Storage - preserve your hard-earned cash that would otherwise be used for expensive capital expenditures like pallet racking, forklifts, and the costs of running and maintaining warehouse space.
- Scalability - as you grow and your marketing efforts continue to be more successful, you may be required to turn up your volume in days rather than months. If you are fulfilling in-house, you may miss fantastic opportunities because you don’t have enough resources or space. Or, you might say yes to the opportunities but lose future orders after failing to deliver on your promises.
- Employees - to get your orders out on time, you need quality staff to fulfill every order, accurately. With third-party fulfillment, you don’t have to hire, manage, and motivate staff. Or rush to add more staff on a moment’s notice due to an unexpected increase in sales.
- Location - a warehouse with more convenient locations across the country can deliver products both more affordably and more quickly. No matter where your production is located, you can take advantage of faster time-to-home for your customers.
- Safety - you have a lot of money invested in your inventory, and keeping that inventory safe from weather, damage, contamination, or theft is a vital part of protecting that investment. It’s also important to ensure product safety and integrity when it comes to returns. So, it’s vital to choose a fulfillment partner with detailed quality control measures.
#2 Improve Efficiencies
Learning how to pick and pack orders with the highest efficiency can take time and often trial and error. Even with quality staff hired to do the job, as a founder or CEO, you also have to dedicate the time it takes to ensure your staff is both trained and inspired to follow proper procedures and optimize the process.
The fact is, while costs vary tremendously depending on current sales volume, location, and the amount of inventory you have, with increased efficiencies, outsourcing order fulfillment can be cost-effective even with relatively few orders per month.
In addition, third-party fulfillment can help you keep inventory organized and accurately reflected in your system, ensuring your product is ready to ship immediately once ordered.
#3 Save on Postage, Shipping, and Handling
Shipping and handling charges can be frustrating for both buyers and sellers, and that’s why getting your shipping strategy right is so important—you want to save money that drops directly to your bottom line while saving money for your customers, so they don’t abandon their shopping carts, unwilling to pay higher shipping rates.
Because third-party fulfillment centers like QuickBox fulfill orders for numerous customers, they can often negotiate better shipping rates than a small business can receive on its own (for shipping tens of thousands of orders per day versus the average customer’s 500 orders per day).
At QuickBox, we are also able to automatically choose the most cost-effective courier service for your products. Of course, those deep savings are passed along to customers, like you!
This consolidation also helps us cut costs on equipment and supplies—because we’re able to purchase shipping bags and boxes, tape, labels, and other needed supplies in bulk, we cut costs drastically. Savings which are again passed onto our clients.
#4 Shorten Delivery Times
Where you are located matters when it comes to delivery speed as well as shipping costs. For example, QuickBox has four warehouses (Denver, Atlanta, New York/New Jersey, and California).
That translates to faster shipping directly to the end customer. In fact, in most cases, virtually any customer can enjoy two-day shipping with no extra costs. Now that’s a win-win for everyone.
#5 Enjoy Peace of Mind!
Perhaps best of all, with third-party fulfillment, you’ll be able to reclaim your time to focus on what you love.
Fulfillment providers eliminate time spent to pick and pack, peel and stick labels, keep customers happy with correctly filled orders, manage returns, and keep stock under control.
That allows you to spend your time focusing on your business’ growth, expanding your product line, or optimizing marketing efforts.
When you pick the right fulfillment partner, you can rest easy knowing your order fulfillment is in great hands. It’s peace of mind you can count on… which is priceless.
Ready to take your fulfillment service to the next level? Contact QuickBox today to see how we can help you optimize fulfillment for your continued growth.