Outsourcing for E-Commerce

As your online business achieves success and continues to grow, it may get to a point where you are no longer able to physically package and distribute your products.  When this occurs, it is time to consider outsourcing order fulfillment to another company.  Order fulfillment centers are abundant and all generally serve the same purpose.  However, these companies vary widely in terms of costs and methods of processing.  This is why you need to give careful consideration to the factors in this article.

Location and Shipping

Order fulfillment centers are located throughout the world.  To save yourself money on shipping costs, you should choose a location that is in close range to your customer bases opposed to something overseas.  If you are targeting a specific demographic such as the Las Vegas, it would be smarter to find a center somewhere in the west coast rather than New York.

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Most order fulfillment services offer an array of shipping options. Be sure to do business with a company that enables the flexibility needed for the shipping options you plan to incorporate now, as well as any changes in the future.

Turn Around

One of the most critical aspects of outsourcing is turn around time.  You will find that each company has its own time line in regard to order processing.  Some will ship every order that is sent before a certain time on the same business day.  If that deadline is missed, the order is typically shipped out on the next day.  The most important thing here is to be aware of the structure and make sure your customers understand as well.  If orders are made after 4 pm, your customers might receive the order in two days even though they paid for next-day shipping.

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Order Entry

Order entry is another factor that needs to be considered before outsourcing your E-commerce tasks.  Some of the most popular options include the following:

  • Forwarding individual orders to the fulfillment center
  • Manually inputting orders on a web-based system owned by the fulfillment center
  • Sending a spreadsheet of all orders everyday via email

Each of these methods will have a different impact on your E-commerce business.  While you can save money by inputting orders over a web-based system, this can become hectic if your business has grown to a point where time is of the essence.  Emailing each individual order to the company might cost a little extra, but may be worth it to have orders shipped out in time.  Use of the spreadsheet is more cost and time efficient but also limits you to next day shipping.

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You will find that fulfillment centers offer numerous payment scales.  Some require that you sign a contract while others will charge on a per order basis with no contract.  Keep in mind that you will be charged something for the storage of your inventory among other fees.  Make sure you have an understanding of these fees along with the terms in any contract.

Before deciding on a company to handle order fulfillment, schedule a few interviews and check out the warehouse that will be housing your products.  Make sure it is up to par and can support the growth of your E-commerce business.  With a reliable company to handle the packaging, inventory management and shipping, you focus on promoting the business and reaching new heights online.

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