Rows of shelves with boxes in modern warehouse

How to Know if Your Ecommerce Business Could Benefit by Outsourcing Fulfillment Services

When you first started your ecommerce business, it probably wasn’t because you really, really wanted to get into the fulfillment business. But, over time, you became aware that your customers would want low-cost and speedy delivery. Or, they might not be your customers for very long. A 2018 study of US shoppers showed—

  • 54% will leave merchandise in their carts because delivery costs are too high
  • A quarter will cancel an order because delivery was too slow, and 24% have abandoned baskets because of too-long delivery windows

Needless to say, how you run your fulfillment operations is essential to your success. When you started your business, filling orders from your garage or rented warehouse space was no doubt a cost-efficient and reasonable way to handle it.

Happily, your business started to grow. More orders flowed in, your warehouse space and shipping material needs grew, you hired more people to pick, pack and ship –suddenly, running your business seemed to be all about managing your fulfillment operations!

The question is, how do you know when it’s the right time to outsource to an ecommerce order fulfillment company? According to Shopify, the right time to partner with an ecommerce fulfillment company is when orders get to 100+ per month. Here are some additional indicators that will help you decide when the time is right to outsource.

You’re losing business because you can’t offer 1-2-day delivery

Online retailers have upped the ante on delivery times with one and two-day shipping, and consumer expectations have followed suit. If your fulfillment operations can’t keep pace, it’s time to outsource to a provider that can offer fast turnaround time.

You’re spending too much on the infrastructure to support fulfillment

It’s important to know what your warehousing, picking, packing, labor, outbound and returns shipping costs are so you can gauge whether they are taking too big a chunk from profits. Focus on investing more on improving your selling platform, beefing up marketing, enhancing your product mix or expanding into new markets by outsourcing fulfillment to a more cost-effective option.

You’re can’t quickly ramp up or down

It would be great if you knew exactly how many orders were going to come in any given day, week, or month but most online businesses experience volatility. With in-house fulfillment, you have fixed costs that hit your bottom line – whether or not you have the orders to support them. During peak times, like holidays, your volume can escalate beyond your in-house capabilities to handle. An excellent, third-party fulfillment company can scale up or down with your needs.

Your “hourly rate” isn’t high enough to sustain the business

Early in her career, entrepreneur Teri Miyahira wanted to understand where she should spend her time to grow her company. She compared routine, daily tasks like warehousing and order fulfillment to more in-depth ones like creating new products or developing the company’s long-range strategy. If you’re running out of time to do anything but get orders out the door, you need some additional help, and outsourcing may be the right solution!

Ohio Valley Goodwill is a Top Pick for Quality Local Outsourcing

For your ecommerce fulfillment, go with an expert workforce, the latest in packing and shipping advancements and a flexible operation which can satisfy the escalating expectations of today’s consumers. Go with Goodwill Industrial Services. Contact us today to schedule a free tour of our facilities.