If you want to grow your retail or eCommerce business, having the right tools is crucial. As technology continues to evolve, it’s also important to periodically re-evaluate the software your business is using. For example, fulfilling orders can be the most complex, time-consuming part of operations for many companies. If you’re still reconciling orders by hand, read on to learn more about what to look for when it comes to implementing smarter fulfillment solutions.
Order Fulfillment: Outsourcing or In-House?
Order fulfillment is the process of taking orders from customers, processing them, and then shipping the product. There are several ways that businesses can approach this process, each with their own benefits and drawbacks. Considerations like order volume, how much physical space your business has, and available capital are all components in figuring out which fulfillment method will work best for your organization.
The Advantages of Outsourcing Orders
The simplest way for small businesses to break into the eCommerce world is to outsource or “drop ship” their product. For a fixed monthly fee alongside a percentage of sales, a third party company handles processing, packing, and shipping orders. In some cases, these fulfillment companies have access to resources like multiple warehouses in different regions, allowing the product to arrive at the customer’s address faster. This can help your business stay competitive – according to a recent study cited by BigCommerce, more than half of online shoppers say that delivery speed is one of the most important benchmarks when deciding who to order from.
Outsourcing is great for companies without a lot of space or ability to purchase surplus inventory. If you don’t want to learn how to create and manage an inventory system, this may be the right choice for you.
Crucially, outsourcing orders is also a good way to save time — especially on packing and shipping. Make sure, however, that you’ve read the fine print and decide whether you can afford to absorb the fees associated with drop shipping or want to pass the cost along to customers, potentially making prices less competitive.
It’s also important to consider factors other than pricing if you’re looking for someone to handle your fulfillment needs. Don’t be overwhelmed by how many fulfillment options there are to choose from. It’s easy to narrow your search considerably by looking for providers that are specific to whichever industry you operate in. Don’t rush your search; the company you choose will, in a way, be representing your organization. Finally, don’t be afraid to ask questions: do they guarantee shipping within a certain time frame? What kind of customer service can you expect if something goes wrong? Is international shipping covered? Check reviews from their other customers, too. Sometimes the cheapest solution isn’t the best option.
Keeping Order Fulfillment In-House
If you’re serious about controlling costs, aren’t moving a lot of inventory yet, or don’t want to partner with another business, consider keeping orders in-house. Doing order fulfillment this way does involve more upfront investment, however: namely, purchasing the inventory and having the space to store it.
Additionally, if you want to stay competitive, you’ll need to invest in software to help you receive, process, and ship said inventory. These days, you don’t necessarily have to use separate CRM, accounting, and inventory-management programs. Look into software solutions that actually integrate the fulfillment part of the job into the rest of your business operations. Although there is an upfront cost, integrating all of your operations under one software “umbrella” will ultimately save you time, money, and reduce the number of mistakes caused by manual data entry.
Good order management software can also help you collect and analyze data about your customers’ buying habits, allowing you to make more informed business decisions in the future. Because you’ll be investing not-insignificant time and money into the software you decide to use, make sure you check out a few different options before deciding.
Just as if you were looking to partner with a company to outsource your product, make sure you understand the software’s capabilities as well as the policies of the company that made it. Will you get dedicated customer service if you sign up for an enterprise-level product? How easy are integrations with other digital tools? Is the software agile enough to keep up with new trends coming from emerging technology?
Once you have the right tools, make sure that your inventory is well-organized and stored intuitively (i.e., fastest-moving items are most easily accessible). The aim is to leave time to scale your organization by minimizing the amount spent on locating, packing, and shipping your product.
Order Fulfillment Doesn’t Have to Be Intimidating
Regardless of whether you decide to outsource your orders or keep them in-house, good fulfillment is the bedrock of your business. That’s why it’s important to take the time to thoroughly research your options, be realistic, and calculate which choice is better for you.
Once you’ve decided, you have a whole new set of options: which fulfillment company or what software to use. Don’t be intimidated by all of the choices out there; use the size of your company and the industry you operate in to help narrow it down.
Approach this process with the same open mind and entrepreneurial spirit that led you to start your business, and you’ll be setting yourself up to deliver success.
“aACE transformed our order fulfillment process during implementation by helping us see trouble spots in our processes.” – Derek Navratil, Essential Water Solutions