Read this before you outsource your order fulfilment

24 February, 2021

E-Commerce

Outsourcing your order fulfilment is a big deal. Choose the right fulfilment partner and you can enhance your processes and grow your business. Get it wrong and the damage to your brand could be unrepairable.

As your business grows, so does your need to hold an increasing amount of stock, ready to be picked, packed and shipped as soon as an order comes in.

But how do you keep this stock stored in a location that won’t eat into your margins and also doesn’t create barriers, added expense or fuss to your order fulfilment?

The simple answer is to outsource your fulfilment to another company, but how do you know their fulfilment services are what you need and won’t cause you more headaches in the long run?

What are order fulfilment services?

Simply put, once your customer receives their order it is complete and therefore ‘fulfilled’. But a number of things have to happen without a hitch to get to that point.

The right item has to be selected, it needs to be packed in the right container (with the right amount of protection), the right shipping address and postage details/payment needs to be added, and then it needs to be sent through the right network to get to the customer within the time they expect.

Are these the reasons you are considering outsourcing your order fulfilment?

Obviously when your business first started, you made sure this is was all done correctly yourself and it didn’t add to your overheads either. Let’s face it, it’s also incredibly satisfying seeing all those parcels going off to what will hopefully be loyal and repeat customers.

But there will be a point where the volume of orders is just too much for you and your inhouse team to cope with, and too expensive if you’re looking to increase sales overseas.

You might also find that you’re having to store stock in warehouses all year round, but with cyclical sales you’re paying for something you don’t need most of the year.

This is a nice problem to have, but what’s the solution?

Well, outsourcing your order fulfilment will certainly give you the resources needed to cope with your growing orders, and for the most part it is. But, with up to 3% of the billions of parcels sent out by UK businesses each year going missing, you can’t afford to place your order fulfilment services in the hands of a company that doesn’t offer the care and expertise you deserve.

asendia-team-1Who should NOT outsource their order fulfilment?

While outsourcing fulfilment services is the right solution for many, for some it’s best to keep them inhouse. Shopify, highlights three types of business who might be best to keep doing it themselves.

Those with limited cash flow

Start-up or not, if you don’t have ready cash available, you obviously need to do the work yourself. This isn’t a big problem if your biggest resource is time, as you can look at time as an investment in your business, putting growth aside until cash is available to pay employees or contractors.

Highly specialised businesses

Not everyone will be able to find a company that can do exactly what is needed to handle fulfilment of specialist products. They may need specialist handling and if your employees are already fully trained to do that then outsourcing may be more costly than it’s worth.

Those with limited order volumes

If you’ve only a handful of orders to send out daily, then maybe it’s too soon to ask for someone else’s help. The best time way to tell if you’re ready to outsource a part of your business is if it’s become too much to manage in house, either by yourself or with additional employees.

What an order fulfilment service should offer you

Naturally you want a fulfilment service that shares the same attention to detail, care and high-quality service that you provide. You want any change in fulfilment to be seamless, or any noticeable changes to be positive.

But with so many factors at play, what should you be looking out for?


Delivery costs and options

Probably the biggest consideration, you need to make sure the fulfilment services on offer are competitively priced, within budget, and you have a number of delivery options to offer your customers – including free or low cost returns.


Proven quality

You customers expect a quality service from you, so you should be able to expect a quality service from whoever is looking after your delivery logistics and fulfilment process.

Shipping on time, packing accurately and properly manages stock are the basics, and customer reviews will quickly tell you if the companies you’re looking at can deliver the standards you require. Have a look for independent professional accreditation too, such as ISO9000 (Quality Management Systems).


International shipping expertise

Your business is growing, and you want to sell overseas. Outsourcing your fulfilment services to a company with no understanding or experience of international shipping and exporting can lead to headaches you just don’t need.

Who you choose needs to be up-to-date with current custom’s requirements across all international borders, utilise local knowledge across their network and, ideally, have multiple fulfilment centres across the world should you ever become a big hit in a particular country or region.

Flexibility

As you grow and evolve you want your third-party fulfilment provider to adapt and evolve too. If they can’t offer scalable and versatile options, then you won’t be able to make the most of peaks in demand or sudden business growth. This will lead to unhappy customers and could damage your business growth irreparably.


User friendly fulfilment technology

Whether you’re on eshopworld, Shopify, Magento, Big Commerce or another, your fulfilment company needs to be able to integrate with your e-commerce platform or marketplace. If not, the time and cash you could save with them doing the ‘pick and pack’ and shipping could be lost with you having additional administration, processing and costs.


An easy-to-use service

Your time needs to be spent running your business, you don’t want to waste time dealing with daily fulfilment issues, especially if you are paying someone else to supposedly look after these for you. You need a low-maintenance system with a high-quality service.

With all these in mind, you can go armed with key-questions that you can ask any company you’re sounding out to manage your order fulfilment.

  • Can they easily integrate with your eCommerce platform?
  • Will they be able to give you access to more marketplaces both in the UK and overseas?
  • Can you visit their facilities and meet the people who’ll look after your stock?
  • Will you be able to train the staff looking after your fulfilment, so they know how you want it picked, packed and shipped?
  • What customer service support do they offer you and your customers?
  • How does their returns process work and is it cost-effective, so you can offer a free return service to your customers?
  • What are the timetables for making sure they have enough of your stock?

A good third-party order fulfilment service will be able to answer these questions immediately.

 

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Key fulfilment costs to consider when outsourcing to order fulfilment services 

Firstly, most third-party order fulfilment providers will offer two pricing structures:

  • Fixed costs: As it says on the tin, this gives you a fixed fee per order that stays the same and is ideal for businesses with predictable sales and no current expansion plans.
  • Variable costs: a flexible package that helps respond to peaks and troughs of orders if you’re in a seasonal market or you’re looking to expand.

As with any service provider, you’ll need to consider the return on investment in diverting your cash to pay for what they provide.

Like Asendia, many outsourced fulfilment services have fixed costs for things like warehousing and storage, staff, systems and infrastructure. These should not simply be passed on to you, or you may as well pay for your own fulfilment centre and staff. You need flexibility and to benefit from having a service you can ramp up or down.

Also consider if the cost will genuinely bring benefit to your business, such as account management, IT and systems integration, and international expertise (if you’re selling overseas). These are capabilities you can tap into without needing staff of your own.

You also need to see if there’s a minimum fee each month. Fulfilment providers make money from processing orders, so what will happen if you have a quiet month?

Other costs, which are likely to be variable, include: the space used by you in their warehouse, picking and packing, despatching, processing goods-in, returns handling and packaging materials.

But you may also be able to influence the cost of some elements, such as making sure stock arrives at the fulfilment centre in a way that helps it get booked in and onto its designated shelves quickly.

 

Do you want to grow cross-border? Make sure you choose an international order fulfilment specialist

One of the easiest ways to grow your business is entering new markets overseas. While this opens your business up to more customers, with local cultures, custom’s charges and other factors to consider, it’s any wonder many businesses find it too daunting.

So, if you’re looking to grow, or need a third-party fulfilment provider to support your international business already, you should look at one that has the experience, logistics and resources to help take your business international.

While having fulfilment centres across the world is a bonus (Asendia has two UK fulfilment centres, and one each in Italy, Singapore, USA, Australia and New Zealand), these are the factors you need to consider if shipping from the UK:

  • Are they up to date with international customs?
  • How well do they understand the rules of global export?
  • Do they have established international shipping networks?
  • Do they have local partners in destination countries, and do they get the best price for their service?
  • Are their expected delivery timings for each destination acceptable and proven?
  • What international returns service do they offer, and how much does it cost, taking local cultural expectations into consideration?


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When things go wrong with an outsourced fulfilment centre

A responsible fulfilment services provider like Asendia, will always do their best to look after you and your customers and give them the high-quality service they expect. They will sign up to a Service Level Agreement and have formal processes and quality certifications. Of course even if mistakes are rare they are inevitable when picking and packing thousands of orders a day, but they will have processes to make it right.

However, with the boom in e-commerce a number of suppliers entered the fulfilment market to reap the rewards, often with a history in offering more traditional logistics and mailing services. They adapted their historical systems to try and fit the new world of e-commerce, rather than investing in the new technology, warehousing, and people that were needed. 

Sadly, this can lead to problems which have a negative impact on their customers, as these businesses found out too late.

These are examples of comments we found online:

“What has disappointed us the most is their complete lack of customer service and care towards their customers. Phone calls do not get followed up, emails do not get answered for over two weeks and by that stage we have had to refund our customers for orders that were not shipped at our own cost.”

“This year we were given zero warning that Black Friday orders would be sent 10 days late and not same day dispatch as promised. This cost us many thousands and the worst thing is that they never even thought it appropriate to apologise.”

“They constantly got our products lost and shipped out late.”

“The way they packed my products, used rubbish tape to close the boxes, didn't even make up the boxes correctly and didn't bother to pack the boxes correctly, resulting in broken goods and unhappy customers.”

While this is just a sample of genuine reviews for third-party fulfilment providers, the main issue with them all seems to be lack of customer service and communication. Not responding to phone calls and not telling their clients about changes to delivery timings during busy periods should simply not happen.

There are also issues here that are caused by a client not being able to train the fulfilment provider’s own staff, so products are packaged properly. As we’ve said above, ask the businesses you’re scoping out if you can train their staff to look after your products and deliveries properly, and what their customer service commitments are.

In summary

Outsourcing any of your processes to another company should always be to create a positive impact on your business. By outsourcing you order fulfilment, you are really taking a big step forward in business growth.

You’ll not only free up your time and that of your employees, so you can invest more into your business, but you’re also paying for delivery logistics and knowledge that could open up new markets for you overseas, while giving your current customers an event better service than before.

 

Asendia's order fulfilment services are trusted by growing etailers looking to optimise their fulfilment and shipping and grow their business. Contact us to find out more.

 

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