When Is It Time to Start Outsourcing Fulfillment?
Outsourcing fulfillment is a major step for your business, but one that will guide you toward greater profitability and growth. You and your staff are spending two to four hours each day packing boxes and making post office runs to satisfy orders. As order volumes fluctuate, you are incurring maximum costs for labor, space, and shipping.
For several reasons, it may be time to move up to a predictable cost model – independent of shipping volumes – and that means outsourcing your fulfillment.
When You Need to Reduce Shipping Times and Expenses
Shipping rates are driven by order volumes; shipping distances; and packing labor rates, materials, and weights. Partnering with a fulfillment house gets you access to lower rates through higher volumes and shorter distances, assuming the fulfillment house is centrally located for your customer base. Your partner also reduces shipping costs through a combination of shared labor rates and more cost-effective packing. Shipping times are accelerated by shipping technologies that seamlessly integrate with carriers to expedite transit. Your partner’s shipping expertise, shortened distances and immediacy of order fulfillment also expedites delivery times. There is no more waiting until mid-day or the end of the day to take boxes to the post office.
When Greater Order Fluctuations Require Scalability
As your operation grows, you need more warehousing space; shipping materials and equipment; and the personnel to pick, pack, and ship. At the beginning of your growth trajectory, order volumes fluctuate significantly. During this critical period, it makes little sense to incur fixed costs for variable needs. Doing so guarantees a reduction in cash flow and the investment capital you need to grow. Outsourcing gives you scalability, so you pay for what you use, rather than paying for empty warehouse shelves, unused boxes, and idle employees. By outsourcing, you gain inventory management expertise and you save the time it would take to hire, train, and manage warehouse employees.
When You Need Help with Customer Service and Returns
As your order volume increases, so does your call volume. Customers need return authorizations and refunds or credits. Your business needs an efficient returns process that gets products immediately back into inventory. To handle calls with a satisfying level of customer service, you can’t have preoccupied entrepreneurs answering the phones. Dedicated and trained specialists are necessary to ensure a smooth process after the initial order.
If your business is growing and you need to take the next step, learn more by talking with a Ridgway Fulfillment Specialist by getting in touch online or calling us at (214) 997-0364.