The Benefits of Using an Order Fulfillment Service
Running an online retailer is a complex task. In the beginning, it may be easy to handle sales, payment processing, packaging & shipping, and keep track of inventory on your own. But what happens once sales and order volumes start to pick up? When more and more customers reach out for support, payment issues, and returns?
Sooner or later you will also find your storage space lacking as you need to keep more products on hand. As your business grows, things can get a little overwhelming.
This is where order fulfillment services can make life easier and help your business thrive.
Order fulfillment services allow you to outsource your warehousing and shipping needs. This allows you to focus on other aspects of your business, such as quality assurance, marketing, and sales. Professional fulfillment services improve operational efficiency, reduce, costs, and take a significant amount of pressure off you, the seller. Today we want to take a look at how fulfillment services can benefit you:
Why Order Fulfillment Services are Beneficial to Your Business
1. They Reduce Shipping Costs
One of the biggest expenses for online retailers is shipping rates and material costs. Shipping rates are determined by order volume; this means the more products you ship, the lower the shipping rates. Using a fulfillment service will let you take advantage of their shipping rates, which are generally much lower than what you could get on your own. It’s estimated that you can save around 15-35% on shipping by using a fulfillment service.
Fulfillment services can also keep your material costs are kept to a minimum. They have the experience to make sure that you’re using the right packaging and filler materials and determine the optimal way to pack your products. Some fulfillment services also offer custom packaging design if generic packaging solutions aren’t sufficient.
2. They Minimize Operating Costs
Another advantage of fulfillment services is saving on operating costs. Warehouse rentals, equipment costs, upkeep/maintenance fees, and other overhead expenses can really add up. Fulfillment warehouses split these expenses among all the clients using the facility, lowering your individual costs. You also don’t need to worry about hiring your own warehouse employees.
Fulfillment services charge a flat rate per number of units that you’re storing at the warehouse. This only changes when the number of units you’re storing changes. After that, you’re charged for each item that is picked, packed, and shipped. This means that you’re only paying for what you use. When business is booming, your fulfillment costs will go up because the warehouse is moving more products. But when business is slow, your fulfillment costs will go down. This keeps your operating costs “just right” for the amount of units you’re storing and shipping.
3. They Streamline the Order Fulfillment Process
Online retail is complicated. Trying to handle all aspects on your own can be difficult without proper organization and integration of many different systems. Fulfillment services have access to software and systems that can streamline the fulfillment process. Some usual services they offer to help your business run more efficiently include:
- Order and Payment Processing
- Shipment Tracking
- Inventory Management
- Shipping Carrier Selection
- Shipping & Handling
Order fulfillment software is commercially available, but it can be very expensive. By using a fulfillment service, however, you can take advantage of these benefits without having to buy the software yourself.
4. They Help Extend Your Reach
Once your business starts to grow, you need to make sure you can handle increased shipping demands. Trying to scale your business on your own can be costly as order volume increases. Fulfillment services have the resources to take on increased order volume as your business grows.
One of the most enticing aspects of growing a business is bringing your product to new markets. Whether it’s on the other side of the country or the other side of the world, reaching new customers is a huge step up for your business. Luckily, many fulfillment services already have the infrastructure in place to handle international shipping. This allows you to expand to new territory without the need for huge investments into scaling or unwarranted overhead increases.
5. They Improve Your Customer Service & Returns Process
Reliable customer service and an efficient returns process are essential to running a successful business. Many fulfillment services offer 24/7 customer support by phone or email, and their integrated systems allow for easy returns, exchanges, and refunds. This leads to happier customers and better reverse logistics management.
Fulfillment services can also help meet evolving customer expectations when it comes to shipping. Considering how COVID has created a huge shift towards online shopping, meeting your customers’ expectations is vital to keep business moving. Customer surveys show:
- 49% of online shoppers are more likely to purchase an item from a retailer that offers same-day shipping
- 63% of online shoppers expect guaranteed or estimated delivery dates
- 96% of online shoppers want retailers to identify and resolve package exceptions while they’re still in transit
Fulfillment services are able to meet these expectations, taking the burden off of your shoulders and keeping customers satisfied.
Looking to Outsource Your Order Fulfillment?
Preferred Packaging is Here to Help.
Since our founding in 1985, we have become the preferred packaging supplier for hundreds of companies along the Front Range. We owe our 35 years of success to taking the time to really listen to our customers and come up with effective solutions for their packaging and shipping needs. We are fully equipped and able to design and manufacture packaging products, as well as provide generic packaging products, equipment automation, kitting & assembly, and warehouse & distribution services.