Six Common Myths About Using Fulfillment Services
Common misconceptions about ecommerce fulfillment services, fact: While the lowest cost option can sound like a fulfillment facility that's in the tightest of locations, you might actually wind up paying more over time for shipping costs simply because most orders need to travel further to reach your intended customers. You've probably experienced this yourself when ordering something on-line and discovered that your desired product wasn't available immediately. If the item didn't arrive in a timely manner, or at all, that's the issue - you either got delayed, or the product wasn't in stock when you ordered it. This is an example of when purchasing products from a fulfillment service isn't necessarily a good idea, but it's also an illustration of why you need to consider shipping costs when evaluating any fulfillment services for your company.
It's important to realize that many fulfillment services don't perform regular packaging. While many offer standard box-and-garment solutions, such as heavy-duty boxes and bubble wrap, many warehouses aren't equipped to handle standard shipping on items over long distances. In addition, many service companies use their own packing machines and machinery to pack each order. This can lead to increased shipping costs as well as an irregular packing schedule that won't be adequate for all customers' needs. With a professional packing machine and quality fulfillment services, your products will arrive more quickly and in better condition than with shipping operations that use regular packing and shipping procedures.
Fact: Modern technology is making it easier than ever for online shoppers to quickly shop. However, companies who provide ecommerce fulfillment services are quickly adopting the latest technology and integrating it into their business. As a result, they aren't necessarily behind the times - or even knowledgeable enough about the newest technologies to help customers. The result can be a situation where the company is slower to adopt new technologies and, as a result, is facing increased order delivery times and missed opportunities for customer service.
Fact: Using e-commerce fulfillment services is often less cost-effective than traditional methods of inventory control. Fulfillment companies utilize the latest technology to manage an entire warehouse, including multiple rostering systems. They use real-time systems to keep track of inventory levels, so they can quickly move merchandise to storage when it's low and reorder merchandise when it's high. By cutting out the time it takes to move inventory and to replenish it, e-commerce fulfillment services allow online businesses to more efficiently maximize the productivity and profits of their operation. In the long run, companies that outsource these functions to a third party often find that they spend far less money than they otherwise would.
Fact: Most consumers want to do business with a company that's responsive and helpful. While it's true that most fulfillment services offer great customer service, there's another side of the coin - most consumers just aren't comfortable dealing with an unfamiliar person or company. A traditional warehouse company may be familiar, but customers want to feel that they're not. If an e-commerce fulfillment service provider isn't very friendly, it's understandable that many customers will go elsewhere to fulfill their needs.
Fact: Even though consumers appreciate lower shipping costs associated with using fulfillment services, they have to deal with certain trade-offs in order to do so. If you're shipping products over a long distance, for example, you'll need to incur extra freight charges. If your products are fragile or contain fragile components, you'll need to pay extra for insurance coverage. While long-distance shipping costs may seem minimal when you're shipping products less than a mile away, these fees can add up over time.
Fact: Many consumers are leery of third-party order fulfillment provider because they feel as if they aren't being taken care of. When an e-commerce business needs to ship out thousands of packages per month, they must invest a lot of resources hiring people to do so. Fulfillment services often provide staff members who live and work in a different city or state than where the products will be shipped. The staff members hire on-site packers and tippers, and employ warehouse employees to stock shelves, sort shipments, and load pallets. If you're shipping products more than a few states away, you could be running into issues with out-of-state drivers picking up your shipments.
Fact: Most ecommerce businesses aren't planning to expand into the next twenty years. By the time your business has achieved several substantial milestones - growing and opening a second store, launching a new Web site, launching an online storefront - you probably don't want to have to keep paying for extra employees. By outsourcing in-house staff, you can avoid the high cost of payroll taxes and other expenses, while still allowing your business the freedom to expand when it's financially feasible.