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5 reasons why ecommerce brands should outsource fulfillment

Jul 19, 2022

19.7.2022

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12:00

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Fulfillment is a critical part of any business, but it’s especially important for direct-to-consumer (DTC) ecommerce brands. Of course, nailing fulfillment execution is no small feat. Getting orders from manufacturer to customer is a complex process, and as your business grows, the challenges associated with logistics will grow too. Most DTC brands start out fulfilling orders in-house, but quickly grow to a point where they have to decide: should I outsource fulfillment? 

Outsourcing through a third-party logistics (3PL) or fourth-party logistics (4PL) company provides a viable alternative to the expense and headaches that come with in-house fulfillment. In this post, we’re uncovering the many benefits of outsourcing fulfillment, so you can determine if it’s the right fit for you. If you aren’t already familiar with the pros and cons of a 3PL versus a 4PL, it may be beneficial to understand the differences between the two before reading further. 

5 reasons why you should outsource fulfillment

To put it plainly, order fulfillment can be difficult. With the right partner, many of the unforeseen headaches and challenges can be avoided.

Five primary benefits of outsourcing fulfillment include:

  1. Less complexity for you as the business operator
  2. More time to focus on strategic business functions that require your expertise
  3. Cost savings that enable growth and reinvestment in your brand
  4. Increased customer satisfaction
  5. Dedicated support from industry experts

Minimize fulfillment complexity 

The most obvious benefit of outsourcing your fulfillment is that it takes the complexity of day-to-day logistics off your plate. Each step of your product’s journey, from manufacturer to doorstep, comes with its own complicated set of details and decisions that can quickly pile up. Soon, you’re spending all your time on logistics instead of running your business. 

The responsibilities of in-house fulfillment include:

  • Managing the upkeep of warehousing infrastructure (equipment, square footage, and technology) and expanding as your business grows
  • Hiring employees to run the day-to-day operations of receiving, picking, packing, and shipping
  • Manually monitoring inventory and negotiating freight shipping from your manufacturer to your warehouse
  • Sourcing and storing packaging, fill, tape, and other shipping supplies
  • Negotiating rates with major shipping carriers or paying their advertised rates, and calculating the most cost-effective way to ship each order
  • Ensuring returns are received and the merchandise is appropriately handled
  • Fielding customer support questions and providing quick and helpful feedback
  • Connecting multiple integrations to sync ecommerce platforms, pick and pack station printers and computers, shipping APIs, and warehouse inventory systems, among others
  • Designing warehouse layouts and team processes to streamline fulfillment workflows, from receiving to returns

Partnering with a 3PL or 4PL removes these responsibilities from your to-do list. They provide the infrastructure and manpower, along with software to help you track inventory and determine when to restock. These providers have also already negotiated deals with freight operators and shipping carriers, so you don’t have to. Some, though not all, 3PLs and 4PLs also manage returns and customer support for you. 

Plus, having a fulfillment partner means you can quickly and easily scale your fulfillment operations as your business grows. Most providers have multiple warehouses across the country, which means you can expand as demand increases without the time and capital investment you would need to scale in-house operations. 

Focus on your strategy and mission

When the details of shipping logistics are taken off your plate, you’ll have far more time to focus on the strategic aspects of growing your business that require your unique perspective and expertise. 

You started your business because you saw a gap in the market and wanted to further your mission. As an expert in your industry, your focus should be on perfecting your product, marketing your brand, and scaling your business—not researching shipping rates or counting inventory. 

Outsourcing fulfillment does not have to mean sacrificing on the brand experience or customer service you’ve worked hard to build. Modern 3PLs and 4PLs provide the same level of customization, or better, that most companies can achieve in-house. 

Lower costs and reinvest in your brand

Partnering with a fulfillment provider saves ecommerce brands a ton of money in overhead and labor costs, but the cost savings go beyond that. Outsourcing your logistics to a strategic partner can give you access to high-volume rates and savings that growing businesses often cannot negotiate yet. 

3PLs and 4PLs have the infrastructure, partnerships, and expertise needed to provide the most cost-effective storage, packing, and shipping method for each of your orders. Here are a few examples:

  • Warehouses: With multiple warehouses across the country, 3PLs and 4PLs can place your inventory in strategic locations to minimize the cost of shipping. 
  • Storage: If your product requires specialty storage, like temperature-controlled or food-certified storage, a third party is likely to have this infrastructure in place already. They can also store your items in bins, pallets, or blocks of space, depending on what is most convenient and efficient. 
  • Shipping: With their carrier networks and technology, modern 3PLs and 4PLs can easily determine the cheapest shipping method on a per-order basis. Plus, they have negotiated rates with most major shipping carriers, the benefits of which are passed on to you. 

With these savings, you can reinvest in your company, whether that’s through a new product line, increased marketing efforts, or offsetting the cost of free shipping for your customers to increase sales. 

Increase customer satisfaction and loyalty

When your customers are primarily interacting with your brand online, their experience with your fulfillment process—how quickly their order arrived, whether it was damaged, how much they paid for shipping, and so on—can be what determines if they’ll be a loyal customer or leave you a negative review. 

When working with a quality 3PL or 4PL, you can rest assured that your orders are shipping same-day or next-day, and that the appropriate carrier service is being used to meet your promised ETA. 

DTC brands also tend to rely heavily on the unboxing experience—after all, it’s the only physical interaction most of your customers have with your brand. Outsourcing fulfillment doesn’t mean you have to sacrifice an excellent presentation. Some, though not all, fulfillment partners offer kitting services and branded packaging, meaning you can ship in a branded box or using branded tape and include special touches for your customers, whether it’s a booklet explaining how to use your product, an insert offering a discount on their next purchase, or a personalized gift note. 

Even with the best fulfillment partner, the occasional disgruntled customer is inevitable—their package may have arrived late or damaged, or perhaps they just want to make a return. 3PLs and 4PLs usually offer reverse logistics services to manage returns and sometimes will manage customer complaints, too. That means that if a customer has a question about the delivery of their order, you don’t have to field the inquiry, call the warehouse, track down a package, and get back to the customer—you can simply trust your fulfillment partner to field these questions for you. 

Enjoy expert guidance and advice

If less complexity is the most obvious benefit of outsourcing, then the guidance and expertise that come with a third party may be what pays the most dividends. When you outsource your fulfillment, you get access to an entire team of logistics specialists that is well-versed in the complexities of order fulfillment operations. 

With their experience and insight, 3PL and 4PL providers can help you with:

  • Determining your shipping strategy by using your product’s weight and dimensions to find the most efficient and cost-effective means of packing and shipping different kinds of orders
  • Scaling up operations to meet fluctuations in order volume, whether from business growth or seasonality 
  • Ensuring orders are accurate and delivered on time, regardless of volume 
  • Tracking inventory levels and alerting you when to reorder stock 
  • Identifying cost savings opportunities through more efficient warehouse processes
  • Responding to customer inquiries and complaints in a timely fashion

Deciding when to outsource fulfillment

Knowing when to outsource fulfillment is a critical part of growing your ecommerce business. Wait too long, and you could find yourself inundated with order details and SKU spreadsheets, taking valuable time away from the executive duties you hold. 

When you choose to partner with a fulfillment provider, you invest in your company in numerous ways: 

  • Focus your efforts on building your business and furthering your brand’s mission, without sacrificing excellent customer service. 
  • Reinvest the cost savings realized through the partnership in the business by offsetting the cost of free shipping, leveling up your marketing operations, launching a new product line, or whatever else your business needs. 
  • Get advice and insights from industry experts to maximize efficiency and scale your business smoothly. 

Take the next steps to outsource fulfillment

Is your business ready for a fulfillment partner? Learn more about how Airhouse can help by scheduling a call with us today.

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