Whether you are new to the ecommerce scene or have been around a while, you may be considering whether or not your business could save some money, time, and effort when it comes to fulfilling your online orders and shipping out your product. Renting a warehouse for your product to be housed, packaged, and shipped out from can get expensive as you start to scale up, especially when you factor in all the costs related to staffing, heating or cooling, general space costs, insurance, etc. Early on, having your own space for fulfillment may make sense, but at what point do you decide that a third-party fulfillment center will be more beneficial for your operation?
Savings with Time and Money
One of the primary considerations when it comes to choosing to switch to a third-party fulfillment center is the amount of money and employee time you are going to save. As your company scales up, if you are running your own fulfillment, you will need to rapidly start employing more employees and finding more warehouse space, all of which increase your leasing costs, logistic costs, employee benefits, insurance cost, and so forth. A fulfillment center generally signs much longer leases for their warehouse space, so they can lock in much lower prices, and those savings get passed on to their clients. A third-party fulfillment center is serving several clients at the same time, which means their shipping volume is drastically higher than yours would be, giving them lower shipping rates. This means you can charge less for shipping costs, enticing more customers to shop through your website.
Rapid and Agile Business Growth
When your business starts growing, and you are handling your own shipping, you can start running into an issue of not being able to expand your space, or train new employees fast enough, leading to delays in shipping and upset customers. By offloading your fulfillment to a third-party fulfillment center, you have access to a vast infrastructure that is already in place, with lots of room to expand, meaning, as your business grows, they’ll be able to handle all your fulfillment and shipping needs.
Expanding the Reach of Your Company
A huge benefit to using a third-party fulfillment center is the fact that the center doesn’t have to be in the country your business is based in. If you are a foreign country looking for cheaper shipping options in the United States, then you can hire the services of a fulfillment center in the United States without having to open up a remote business office there. If you are already based in the United States, then fulfillment centers have the shipping logistics already in place for affordable shipping worldwide, meaning you can expand the reach of your e-commerce business to be worldwide.
Wholesale Ordering and Business-2-Business Ordering
With the use of a third-party fulfillment center, you will better be able to handle wholesale and B2B orders for your business, such as those from large retail chains. Handling wholesale orders with large retail chains and other businesses can be troublesome, as any errors can result in hefty penalties per your contract agreement with them. You can reduce the stress of your company handling B2B and wholesale yourselves by offloading it to an experienced fulfillment center.