When to Outsource Fulfilment During Business Growth

The retail sector is currently experiencing a significant shift in landscape and consumer expectations, with the boom of e-Commerce leaving many established businesses scrambling to adapt. With 20 years of experience in the world of fulfilment and logistics, I-Fulfilment is here to help you identify whether now is the right time to outsource your fulfilment. As an SME begins to outgrow storage space and resources become a barrier to growth, the next steps can be crucial. It is essential to plan and implement a growth strategy to ensure that your business maintains a high level of customer experience whilst aligning your long-term growth goals and business objectives. There are many variables and deciding factors, but with our broad experience of transitioning brands to an outsourced solution, we believe the tipping point is around 500-600 orders per month. Aside from the operational day to day challenges, we regularly work with brands where a step change is required to drive the business to its full potential. Moving to an outsourced solution is likely to enable SMEs an improved platform for scalability and competitive advantage. This is likely to come from improved shipping rates, access to a larger workforce to handle peak sales periods, better rates, and access to packaging. WMS software should enable accurate stock management reporting tools and real time order information.

When to outsource Fulfilment during business growth

If your business is getting to the stage where the fulfilment function is regularly reaching maximum capacity off-peak, an outsourcing review should be a high priority. Whether you are a small business operating from home or a large-scale business, ensuring your fulfilment and logistics run effectively will maximise ROI on customer acquisition costs. Meeting customers delivery expectations is an intrinsic part of successful, sustainable growth. Outsourcing logistics and fulfilment will allow you more time to focus on your brands overall proposition, sales & marketing strategy, product development and supply. This transition will open up new opportunities to re-deploy resources, allowing you to spend more time working on your business rather than managing a fulfilment operation.

Outsourced Fulfilment Pros and Cons

Outsourced fulfilment is an alternative, sustainable option to manage growth. An effective fulfilment provider will proactively manage the entire e2e process from converted sale to doorstep delivery, including returns. When reviewing the different capabilities and solutions available in the market, consider what other functions and services are available to support your future aspirations. Additional benefits such as customer service, including pre and post-sales support, marketing and marketplace management can offer a full wrap-around service that can be adopted as and when required. By outsourcing fulfilment, you will have time freed up to focus on the core elements of your business. Customer trust is everything in building a brand. Being in control of stock levels and delivery options will help your business keep a close relationship with customers, ensure you are fulfilling their expectations and gain their trust over time. Outsourcing fulfilment will deliver direct operational and postage saving almost immediately. However, this is likely to pale in comparison to the new opportunity that will present itself from allowing you and your team to focus on sales, marketing, operations and product development as opposed to picking and packing. Outsourcing does come at an additional cost, so, if you can manage the balance between these essential head office functions, whilst keeping capacity to focus on your business growth, you can save money by keeping things in house. From our experience, we find that this tends to be manageable up until you get close to, or beyond, the 500 orders a month fulfilment requirement. This is the point you tend to notice a drop in the time spent on growing the company as your focus is pulled towards the day-to-day trials of fulfilment and customer support.

What’s next?

It’s always good to plan, so if you’re considering scaling your business up in the future, it’s never too early to get in touch and talk through the fulfilment process with one of our friendly, experienced advisors.

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