3PL fulfillment jump starts the order fulfillment of any eCommerce business by providing effective inventory management, shipment, and better customer service. But the most important question for any eCommerce startup is when they should outsource their fulfillment to a 3rd party logistics (3PL) provider and why.
Why Fulfillment is Important
A successful eCommerce strategy involves many things that start from product research, market research, customer demographics, marketing, etc. All these factors result in generating the order and fulfilling that order successfully can result in customer satisfaction and profitability, which is the ultimate goal of any eCommerce business.
Fulfillment is a crucial step that requires warehousing, inventory management, shipping, tech stack, and other tedious tasks which require both time and effort even in the early stages of any eCommerce startup. Outsourcing the eCommerce fulfillment to the logistics experts like 3PL fulfillment partner helps the startups to get off the ground quickly and scale. If you delegate this responsibility of fulfillment to an expert 3PL logistics you can focus better on the other key elements like product development, finance, marketing, sales, and growth of your business.
When to Outsource Fulfillment
In order to answer this important question, let’s analyze the requirements of any eCommerce startup at any given stage
Early Stage
Most start-ups struggle with capital allocation and budgets at the early stages. Handling your own logistics and fulfilling your own orders with the growing order volume may require you to make huge upfront investments. These costs include the long-term lease of a warehouse, infrastructure development, investment in the tech stack, and logistic software and hardware. Startups can simply outsource their eCommerce fulfillment to third-party logistics rather than getting their capital stuck in these fixed upfront costs.
It is actually more beneficial for any startup to outsource their fulfillment to a 3PL partner right from the beginning rather than waiting to be an established business. It significantly reduces the risk and saves up a lot of capital investment which you can allocate towards the other important aspects of your business.
Growth Stage
If you have managed to handle your own eCommerce fulfillment until now and you are looking to grow and expand to the new markets and customer base, you can outsource your logistics services to a third-party logistics company.
Inventory management plays a key role in the fulfillment process. As your business grows, inventory management becomes much more complex to deal with. Partnering up with a 3PL company at this stage can optimize your order fulfillment through effective inventory management. A 3PL partner like ShipBots can help optimize your inventory so that you can avoid the problems of overstocking, understocking, and dead stock. It also provides data analytics to help you in making key business decisions.
Scaling Your Business
As explained above, a start-up can enjoy the benefits of partnering up with a 3PL company right from the beginning. It becomes even more important when scaling to outsource your logistics to the people who have their expertise in the logistics. For example, you have successfully grown your business nationwide and now you are looking to go beyond borders. A 3PL company can offer you cheaper shipping rates nationwide and internationally because of their exclusive contracts with the shippers and carriers. At this stage, it helps you save the per-order shipping cost for any order.
Let’s discuss some other advantages of outsourcing fulfillment to a 3PL provider.
Cost Saving
Partnering up with a 3PL company can save both upfront and variable costs for your start-up. These costs include building or leasing a warehouse, infrastructure development, staff management, and expensive shipping contract.
Partnering with a 3PL provider for fulfillment also helps save resources to better use on your marketing budget and allows you to spend more time strengthening your SEO content strategy.
Better Technology
Logistics and supply chain is a specialized business and in order to make it effective 3PL companies use top-notch logistics software. These tech stacks cost a fortune which you can use on a fraction of the cost through your monthly subscription provided by your 3PL partner. ShipBots’ cloud-based technology provides you industry’s best and most secure logistics platform that you can use on the go to make real-time business decisions for your startup.
Better Customer Experience
Reliable shipping and faster order fulfillment from the warehouse to the doorsteps of your customers make them happy with your product and services. ShipBots also offer reverse logistics facilities to handle the return order.
Integration with Major Shipping Platforms
A 3PL company like ShipBots provides easy and seamless multichannel integration with all the major eCommerce platforms, including Amazon, Shopify, eBay, WooComerce, and others. This integration allows smooth and speedy order fulfillment.
Now let’s talk about some of the cons of using 3PL services. Lack of communication, loss of control, inventory loss, and a data breach could be some of the cons of outsourcing a 3PL fulfillment. However, you can avoid these unfortunate events if you have carefully selected your 3PL logistics company. Here is a guide for you to choose and manage your 3PL partnership.
Bottom Line
Outsourcing your logistics to a 3PL logistics company at any stage of your business helps in growth, profitability, and customer satisfaction but for startups the advantages are immense. If you are looking for a flexible and scalable logistics solution for your start-up, contact us and we will be happy to become a partner in your growth.
