When you started your e-commerce business, its operations were probably a one-man show — you ran everything. But, over time, as the business picked up, you noticed that it became nearly impossible to manage everything yourself, so you took a decision and started building a team and delegating tasks and responsibilities.
Hiring order fulfilment services for an e-commerce store involves such a decision. For those who don’t know, order fulfilment involves the entire process of picking, packing, and shipping the orders received by an e-commerce store. Many also refer to it as e-commerce fulfilment as well.
For an e-commerce business that is consistently growing, order fulfilment services may seem like a viable option, given the many benefits they offer. However, it is not necessarily everyone’s cup of tea. So, if you are haunted by the question that whether your e-commerce business needs them or not, you must ask yourself the following questions:
- Are the Order Volumes Constantly Getting Larger?
- Can the Business Afford to Hire More Staff?
- Are You Willing to Take the Financial Risks Involved?
- Do You Want Peace of Mind?
While the questions themself seem rather straightforward, their answers are not. To better understand their context, let’s look at each of them in detail.
Are the Order Volumes Constantly Getting Larger?
If your business has recently witnessed growth, chances are that the number of your monthly orders has increased. It is also quite likely that you now have an extensive product catalogue and a larger inventory turnover. The questions that now arise are:
- How high the number of orders has grown?
- Has that number plateaued or is it constantly growing?
- In the case of the latter, is the business successfully managing the fulfilment process of all orders?
Let’s say that your business is receiving 115 orders each month. This number fluctuates by no more than 10 orders monthly. Your e-commerce store is still a one-man show. You get overwhelmed with this order volume and, in an effort to ship all orders, you unwillingly ignore business operations.
If this scenario sounds too familiar or somewhat relatable, then your business needs to outsource its order fulfilment process. Otherwise, it is likely that the business might become unstable and fall into a downward spiral. If the number of orders is not high enough and is easily being managed by you or your team, then your business might not need the e-commerce fulfilment services yet.
Can the Business Hire More Staff?
Despite the growth that your business has witnessed, it still has a budget to follow to execute its expenses. The financial limitation makes it hard to answer this simple yes or no question.
Continuing the above example, consider that the increased number of orders have not had the expected impact on your profits, at least not enough to afford a helping hand. It is not just the money that raises a concern here. If you do decide to go this route, you have to advertise the position and invest your precious time in interviewing the candidates. Or you could involve a recruitment agency. Then again, how much they charge can be worth a few salaries of your new employee.
Now, you have two choices, you can either keep handling everything yourself or outsource order fulfilment services. Whether these services are cheaper than hiring additional staff depends on multiple factors. But, the short answer is that they usually are.
And, even if your profits were high enough to allow the business to hire more staff, would it be able to put up with the additional costs in the long run?
Are You Willing to Take the Financial Risks Involved?
You are making good profits and expecting an increase in orders with Christmas around the corner. So, you decide to hire one too many employees to smoothly sail through the peak season. Now what? A month down the line the number of orders has declined. Another month passes and it is becoming harder to even meet the usual operational costs. Faced with such a situation you decide to do the obvious — unload the extra weight and downsize. Because if you don’t you will be betting on the survival of your business. But by doing so, you will be putting its reputation at stake.
The best and only way to avoid this situation, or never create it in the first place, is by opting for the order fulfilment service. If your plan is to just efficiently survive the peak seasons and make good profits, you can get order fulfilment services on a limited contract. Or, if you use the service all year round, you can ask your provider to handle higher volumes during certain periods at additional costs. Such an approach will keep the unnecessary pressure and financial burden off of your business.
Do You Want Peace of Mind?
The last question that you need to ask yourself is whether you want peace of mind or not. You see, high-quality e-commerce fulfilment companies offer 3PL (third-party logistics) services, taking away the hassle of managing administration, warehousing, and packaging costs. leaving you free to focus on other important operations that can help the business grow, like marketing and promotions.
Yes, you will be paying for the fulfilment service, but it will keep your business from incurring many other expenses that it would be spending on otherwise. We hope that this little piece of writing provided you with enough information to make a practicable decision.
If you are looking for a company that holds bankable experience in the e-commerce fulfilment industry to partner with, feel free to connect with us. Our services are available throughout Europe and our contracts carry no hidden costs. The best part is that our contracts are open-ended so you can work with us for as long as you want without any pressure.