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Benefits of outsourcing fulfilment

Vallabh Daga
August 26, 2020
7
mins read

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In today's sophisticated and interconnected world, customers are almighty. They type, snap, and swipe their way to the items they want, continuously searching for a stellar experience. If you use ecommerce channels to sell your merchandise, your prosperity won't just rely upon the characteristics of your product—it will likewise depend upon the implementation of your order fulfilment services.

There are a few advantages to packing orders in-house like adaptability, economy, and simplicity of manifesting a customised unpacking experience. However, as your business develops and your sales increase, it can get hard to run fulfilment operations in-house.

Inventory management, order processing and shipping can be a challenging task. How effectively you can fulfil your orders would be one of the key factors deciding the future of your business. Unfortunately, a lot of companies don't give shipping and fulfilment the time, thought and resources that it needs.

So, how can you stay at par with this continuously changing ecommerce ecosystem and ensure exceptional customer experiences? It's simple—outsource your order fulfilment.

73% of 3PL users agree that 3PLs provide new and innovative ways to improve logistics effectiveness.

What is fulfilment?

Order fulfilment is the process of storing inventory, picking and packing products, and shipping online orders to customers. This process can be completed in-house or by outsourcing to a third-party logistics (3PL) provider.

Fulfiling a customer’s order often involves more than simply putting it in a box and making it ready for the courier pick up. Fulfilment companies take care of:

  1. Warehousing the product or its components
  2. Assembling the product
  3. Packing the order in a box
  4. Labeling the order for shipment
  5. Shipping it using couriers or delivery services
  6. Pushing order updates to notify customers
  7. Managing your customer returns

Benefits of outsourcing your fulfilment

Ready infrastructure to manage your business fluctuations

If you're fulfiling orders yourself, dealing with storage can be a tormenting task whether it's in your living room, garage, or your warehouse.

Additionally, renting a storage space comes with a lot of warehousing management and operational responsibilities. You need to hire staff, purchase storage and security equipment,  insurances, and more. Creating your fulfilment infrastructure requires a lot of capital investment and professional expertise.

Furthermore, your inventory levels will fluctuate based on seasons, flash-sales, discounts, and more. Having to predict exactly how much inventory you would need is difficult, and more often then not businesses run into the following situations:

  • Shortage of storage space when receiving new batches of inventory
  • Excess storage space, if you leased a warehouse expecting growth in sales volume which did not come to fruition

Consequently, handling variability in order volume requires considerable human resource planning; and businesses frequently run into situations like:

  • Inadequate manpower strength when order volumes are high
  • Excess manpower when order volumes are diminishing

If you choose to outsource your fulfilment to a 3PL, you get access to scalable storage space and only pay for what you use. Additionally, fulfilment providers have a large pool of resources which they can allocate according to your current order volume. It will allow you to effectively manage fluctuations in sales without having to worry about resource utilisation.

You can leverage Eshopbox's established fulfilment infrastructure to effectively manage variability in sales. No more brainstorming on how you'll meet customer demands during festive seasons and sales.

Effective order processing

If you’ve ever managed fulfilment by yourself, you know the following activities to ship your customer orders:

  1. Retrieving items based on a pick list
  2. Finding a box of the right size based on your items
  3. Choosing an appropriate packaging material
  4. Packing your order in an organised manner
  5. Printing and scanning labels
  6. Scheduling and aligning courier pick-ups

Performing these tasks daily is extremely labour intensive and time-consuming. A good time to outsource your fulfilment is when you notice you're struggling to deal with an increase in order volume.

Outsourcing to a 3PL will allow you to free up a lot of time and resources. Also, fulfilment providers incorporate relevant technology and automation in processing orders, thereby streamlining the entire process and minimising need for manual operations.

Eshopbox's automated order fulfilment system with streamlined pick and pack process ensure accurate & timely order processing.

Order fulfilment workflow
Eshopbox order processing workflow

Scale your business by focusing on your core expertise

While fulfilment tasks are crucial, they're not the reason you started your business, and they take up more and more of your time as you grow.

After a certain stage, you will realise that time is your most valuable resource and spending time on fulfilment instead of sales generation or building brand loyalty can hinder you from scaling your business.

Smart businesses understand that everything can't be done in-house and recognise when something needs to be handed to professionals. Outsourcing to a 3PL allows you to dedicate your time to branding, product design, customer support, and other business initiatives. Your fulfilment partner will manage your inventory, packing, and shipping needs; after all, it's their core expertise, not yours.

When you outsource to a third party fulfilment expert, you will free up a lot of staff who were otherwise committed to non-core business operations such as inventory management and order shipping. It allows you to build a lean team in-house focusing on high priority business objectives rather than deviating resources to supplementary activities.

Eshopbox understands your ongoing requirements as well as your future expectations so that you can scale flexibly. Eshopbox automates your commerce workflow and handles your heavy-duty operations allowing you to focus on vital business aspects.

"We wanted to consolidate inventory at a single point and handle multiple channel sales and order processing. Eshopbox proved to be our one point solution for the same. For a start-up brand, Eshopbox gave us the ready infrastructure to handle the same. The agility & proactiveness with which the team at Eshopbox acted upon helped us get listed on all relevant portals. They took away the complexity of cataloguing, order management, and fulfilment, leaving us enough time to focus on our growth. With the execution of the marketplace operations off our responsibility, we were able to concentrate on strategy and sustainable development."

- Garima Joshi, Founder, Meraki

Reduce shipping costs

If you're shipping orders yourself, it is unlikely for you to get access to discounts and negotiated shipping rates due to low order volumes. Order fulfilment providers have warehouses spread across the country, allowing you to split your inventory and take advantage of bulk delivery discounts.

Outsourcing to a 3PL can save you around 15%-30% off published shipping rates. Fulfilment providers have tools to browse through different shipping rates of courier service providers to pick make a cost-effective selection.

Example, If you pay ₹30 per shipment when you are self-fulfiling your order, and you ship 1000 orders per month it means

  • ₹30(per shipment) X 1000(monthly order frequency) = ₹30,000(monthly fulfilment costs)
  • ₹30,000(per month) X 12(total number of months) = ₹360,000(annual fulfilment costs)

Now let's assume you outsource your fulfilment and get access to a minimal bulk delivery discount of say 15%

  • ₹30000(per month) X 0.15(discount rate) = ₹4,500(monthly savings)
  • ₹4500(savings per month) X 12(total number of months) = ₹54,000(annual savings)

Additionally, partnering with a 3PL allows you to split your inventory amongst multiple fulfilment centres. This enables you to keep inventory closer to customers and consequently reduce shipping costs and order transit time.

Eshopbox's established background and discounted rates with courier companies allow you to minimise shipping expenses. You can also leverage Eshopbox's vast network of fulfilment centres spread across India to optimally split your inventory.

Gain actionable insights and best-in-class technology

If you choose to partner with a tech-enabled 3PL like Eshopbox, you get access to an abundance of tools, periodic inventory reports and key metrics which can help you make informed business decisions.

A 3PL will grant access to their dashboard which will provide key insights like:

  • Real-time inventory and orders view to plan
  • Inventory forecasts to schedule replenishment
  • Zone based sales data to plan inventory splitting
  • Sales performance reports to identify aspects of product development

Eshopbox brings together your team, your commerce information, and their experts to keep everyone on the same page. A user-friendly interface enables you to control your business at your fingertips through actionable dashboards, alerts, and notifications.

Actionable dashboard
Overview of Eshopbox ecommerce platform

Gain a geographic footprint with multiple fulfilment centres

If you have your fulfilment services in-house, you tend to ship orders from one location. Self-fulfilment can lead to additional expenses and delayed deliveries for customers located at a distance. You won't meet customer expectations for affordable 2-day delivery or even same-day shipping.

Partnering with a 3PL allows you to split and store inventory spread across different facilities. It will enable you to keep inventory closer to customers, reduce the shipping costs, and the transit time for outbound orders.

Eshopbox grants you access to multiple fulfilment centres spread across India, which you can leverage to distribute your inventory strategically.

"Inventory distribution across multiple locations has proved to be a big difference for our marketplace business with our products getting closer to the customer. We are strategically storing inventory in 3 Eshopbox fulfilment centres now. We have seen an increase in 2-day shipping reach by 103%. Not only is this better for our customers, but we also gain a 13% savings on the bottom line."

- Shruti Agrawal, Head Marketing- Aditya Birla Group, Linen Club

Distributed inventory
Eshopbox's distributed network of fulfilment centres

Leverage established integrations

When systems can’t communicate with each other, It results in a disconnected experience throughout the business.

To compete in this dynamic ecommerce ecosystem, you need to have direct integrations, whether it is with marketplaces, shopping carts, shipping providers, analytics tools, ERP, or accounting software. If you don't have these direct integrations you would compromise major human resource into making manual data entries. To understand the need for integrations, consider the following scenarios:

  • Assigning an item to your sell-able inventory in your system, it should reflect on chosen marketplaces or shopping carts
  • Initiating a return corresponding to an item from your system, the same information should reflect on the relevant marketplace or shopping carts
  • Generating a shipping label fetched from the courier companies system

A 3PL will usually have established integrations with various marketplaces and shopping carts so that you can automate and streamline information exchange corresponding to order fulfilment.

Eshopbox offers simple 2-step integration to connect your system with established marketplaces such as Amazon, Flipkart, Nykaa, etc. Also, shopping carts like Magento, Woocommerce, Shopify, etc. This allows you to completely automate your commerce operations without any developer effort.

81% of 3PL users agree that the use of 3PLs has contributed to improving services to the end customer.

Bottom Line

If you are considering outsourcing to a 3PL, you need to make an informed decision keeping your long term business health in mind. Appropriate fulfilment partners will support your organisation's growth, become like a colleague, assist you with exploring the complexities related with logistics and supply chain, and at last, keep your clients upbeat by getting your products in their hands rapidly and accurately.

While it might appear to be an overwhelming errand, it shouldn't be. With appropriate readiness and posing the correct questions, you can quickly identify the perfect 3PL accomplice for you.

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