Order fulfillment is a broad term that includes storing, packaging, and shipping a product under its umbrella. Fulfillment leaves a lasting impression on your customers, which makes packaging and shipping very important to your business. There are different ways to handle fulfillment, and each has its benefits and drawbacks. The two most common ways to handle fulfillment are by doing it in-house or through outsourcing.
Outsourcing Warehouse Fulfillment versus In-House Fulfillment
In-house fulfillment means that your company handles all steps of processing and shipping in its own facility or warehouse. There are several benefits to doing this in-house. When managed well, it can be more cost-effective. You also have total control over the design and process of your packages. It can be completely hands-on. And if you have individualized packaging options, these are better done in-house.
However, managing your own fulfillment is very time-consuming for your business. Likewise, the more time you spend packaging and processing orders, the less time you have to focus on other areas. It is also more difficult when your order volume changes. This means that in-house packaging can put a cap on your capacity to deliver orders to customers, depending on your available space and resources. Though cost-effective (you don’t pay another company to do your shipping), you will likely run into larger up-front costs such as the warehouse.
It is important to consider these factors before doing fulfillment in-house. Still, in-house fulfillment can be a good option when your sales volume is low enough to handle yourself.
Outsourcing Warehouse Fulfillment
Outsourcing is essentially the opposite of in-house fulfillment. It simply means that you partner with a third-party logistics company (or 3PL) that specializes in fulfillment to do the work for you. This can mean you have less control over packaging and shipping and it can be more expensive. But if your in-house shipping can no longer keep up with popular demand or it takes away time from other elements of business, outsourcing can be an ideal option.
Benefits of outsourcing
Make time for your business to do business
Fulfillment is time-consuming. One of the main reasons people outsource fulfillment is to focus on other areas of their business, such as product development, branding, marketing, and sales. Let a third-party logistics company do what they do best, so you can do what you do best.
Leave storage in capable hands
With outsourcing, you can rest easy about storage. In-house shipping storage can be anything from a garage to a warehouse, and it means full responsibility over the storing and inventory of each product. Warehouses themselves can also be costly. Expenses include staffing, equipment, insurance, software, and managing operations. You can avoid those costs and worries through outsourcing.
Be prepared for any order volume
A third-party logistics company can handle a variety of order volume. In-house fulfillment can put a cap on orders, may not be equipped for peak season, or is unprepared for a sudden decrease. By partnering with a 3PL, you can avoid those worries and have room to grow.
Use technology and data to increase efficiency
Outsourcing also means access to technology and data-driven strategies that may not be available to you in-house. In addition, a 3PL can offer expedited shipping options, use real-time tracking for orders, and forecast inventory. Business owners can work with the 3PL to track the progress of packaging and shipping. Furthermore, data analysis means reduced shipping costs.
Maintain a positive relationship with your customers
Fast delivery is a standard in today’s fast-paced world. Along with expedited shipping, a 3PL will likely have multiple fulfillment centers. In addition, each order goes to the fulfillment center that is closest to the customer’s location. With speed and efficiency, outsourcing can help you maintain a better relationship with your customers.
The Bottom Line
In-house and outsourced order fulfillments are both options for your business. In-house fulfillment is better suited for business with a smaller order volume and that want total control over the process. Outsourcing is ideal for growing businesses that want to focus their time and energy on their business. In conclusion, a third-party logistics company like ESM Fulfillment and Distribution is trained and equipped with the resources and knowledge to make shipping easy for you and your customers.