To outsource or not to outsource — that is the question:
It should be a simple one to answer, but it’s shocking how many small businesses struggle with making this decision.
When asked what their biggest expense is, many say their overheads are too high.
But are their overheads really high or are resources poorly managed?
Too many business owners impede their own business growth by trying (and failing) to do everything by themselves. Entrepreneurs spurn outsourcing because of two erroneous perceptions: cost and loss of control.
Yes, it costs extra to retain expert help, but that’s the whole point:
By tapping into their expertise, you free up time, allowing you explore new business opportunities. By forcing yourself to do certain tasks (poorly), you may save money but you are not making money.
For many eCommerce sellers, Q4 is one of the most profitable periods of the year, where sales volume can easily go up to 20x. But because they see running an eCommerce store as a very lean operation, many eCommerce merchants disregard the need for any extra help.
This may be true for a one-SKU store with few suppliers and a very targeted customer base. But…
When sales spike from 10 orders to 300 per day, you simply can’t be efficient without outsourcing some tasks. The monetary cost of in-house order fulfillment includes storage rental, labor and packing supplies.
Rent and staff wages are fixed rates, but the cost of packing supplies can vary from month to month. Add the increased labor wages during sales spikes and you begin to see why in-house order fulfillment can become a huge expense.
To manage all this, eCommerce merchants partner with order fulfillment companies.
But how do you find a reliable fulfillment company? They all seem to make the same claims; reduce expenses, expedite shipping, track orders etc.
At Floship, we don’t believe in just saying it; below are five ways our services can make the difference in your business.
Grant Access to Difficult Markets
The faster you can expand your eCommerce business across borders, the larger your potential profits.
To tap into this opportunity, eCommerce merchants have to understand regulations, Customs fees and taxes for many different countries. This constraint dissuades many from even trying to expand globally.
By partnering with an order fulfillment service, you can reduce most of these growing pains that small businesses face.
With warehouses in major shipping hubs, the partnership also allows you to market to a new customer base in any nearby countries.
Reduce Cost of Expansion
To sell successfully to a global audience, merchants must adapt their offering to each target market.
Packaging, marketing, payment processing, branding must all be tailored to the region.
While a global expansion drive can get expensive really fast, an order fulfillment company can help reduce some of the costs.
Attempting to roll out multiple stores in different countries can be very expensive. By working with a fulfillment partner, your brand can test market viability before making any huge investment.
Improve Customer Satisfaction
Sourcing the product is one thing, presenting it to a customer in a way that will thrill them is another matter.
In the apparel industry, merchants know just how much presentation means to their customers.
You wouldn’t take kindly to having a new suit delivered, to you, rolled up like a rug, would you?
Most fulfillment partners offer value-added services that are designed to make you ‘look good.’
These services include providing tracking information, co-packing of SKUs, personalized inserts etc. These value-added services can also be used to design cost-effective packaging, thus saving your business money.
Keep Running Costs Low
Remember those overheads we talked about?
One of the highest costs among eCommerce merchants is shipping; especially with international shipping.
Fulfillment companies can drastically reduce the amount spent on shopping in two ways.
By using a centrally located warehouse, like Floship offers, fulfillment companies reduce shipping costs as inventory is stored closer to buyers, or in an international shipping hub, like Hong Kong–that offers international shipping at near domestic rates.
These companies also receive a discount on shipping charges, allowing you to lower shipping costs to your customers. The reduced shipping cost can encourage larger sale volumes from customers.
Successful Crowdfunding Fulfillment
Crowdfunding has quickly become a way for entrepreneurs to launch new products in any marketplace.
But after backers have contributed to turn your “Big Idea” into “Reality,” fulfilling orders can quickly become a problem.
Fulfilling orders for crowdfunding projects is fraught with problems like incorrectly picked orders, high storage fees, missing inventory etc.
Even when the right inventory is picked, delayed shipping (especially for international backers) is a huge problem.
Shipping on time and ‘on spec’ is the Holy Grail of crowdfunding fulfillment.
Partnering with an order fulfillment company will eliminate all these issues.
At Floship, we even offer you a pre-campaign assessment that allows you to add a badge on your campaign page. This assures backers that you have all your logistics worked out.
There you go;–five different ways Floship can positively impact your eCommerce business.
We get it, managing suppliers, understanding FOB, CNF, last-mile delivery etc, can be overwhelming. When you find yourself stumped by the many moving parts of running an eCommerce business, contact Floship today.
Related Articles
- Logistical Concerns Floship Can Manage for you to Reduce Your Overheads
- 7 Ways Floship Can Help You Implement Your Fulfillment Solutions
- How Floship Manages The End To End Delivery Of Your Shipment
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