Whether you’re a new ecommerce seller, or you’ve been selling products for a while and have now expanded, you probably have questions about thought about warehousing, shipping, and fulfillment. Of course, it is a thrill to make sales, but a sale is not complete until the product is in the hands of your customer.
Typically, you have three options for warehousing, shipping and product fulfillment:
- You fulfill your own orders alone or with your support team.
- You sell a product from a dropshipper, who in turn fulfills orders for you.
- You hire a third-party logistics (3PL) provider who will handle your warehousing and fulfillment.
There are clear benefits to packing and shipping your own orders at the beginning because it can be flexible and cheap. But if you are reading this, it is probably because your business is growing quickly, and you have the cash on hand to outsource a third-party warehousing and fulfillment.
Working with a third-party logistics provider
Ecommerce sellers may be intimidated working with logistics companies the first time around. But 3PL providers are in business to make your life easier and help you grow your ecommerce business. In general, it is time to hire a 3PL if your marketing and sales are being affected or if you can no longer support the growth on your own. Here are three signs that it’s time to start outsourcing:
Uneven Sales. When the number of orders your process fluctuates throughout the year, it is a waste of time, effort and money to run and staff your own warehouse. A 3PL provider will be able to adapt to your needs through both slow and busy times.
You Don’t Have Time. It is time to outsource if you are not getting your products out for delivery on time. Also, if you are short on time, you will not be able to focus on growing your ecommerce business. If you want to be around for the long-term, you need time to focus on sales and marketing.
Lack of Infrastructure. If you’re growing quickly, you may outgrow your current infrastructure, a 3PL is better equipped to adapt to the changes quickly and efficiently.
One of the benefits of a 3PL provider is that you do not have to hire a staff to handle product fulfillment. If you have been fulfilling your own orders, you will need additional staff as your business begins to grow. Often it is best to outsource the work to a logistics company who has an experienced staff to handle product fulfillment.
Another benefit of outsourcing product fulfillment is to save money. Working with a logistics company can save you money as you grow. For example, if you choose a 3PL that is operating at a larger scale than you currently are, you can benefit by leveraging their buying power on shipping costs and packaging.
The most obvious benefit to using a logistics company is that you will get expert fulfillment. That frees up your time so that you can focus on expanding your online business. And satisfied customers almost always mean more repeat business and positive referrals.