Your business can deliver the highest eCommerce value to customers by understanding your business model and available partnerships. In this post, we’ll focus on potential partnerships for outsourcing your order fulfillment and if that move is the right option for your business.
There are three questions you should consider to see if optimizing fulfillment will best serve your eCommerce consumers:
- Is your current shipping process not a core competency?
- Are you backlogged with new orders and returns?
- Is your business growing or about to scale?
Taking the pulse of your business and eCommerce value
Let’s start with a bold claim: for most eCommerce businesses, the single most crucial artery supporting the company’s overall health is its ability to fill orders. The method you choose for product fulfillment will impact every other process, from how you market and sell to customer service needs and even what SKUs you can offer. This is why choosing a 3PL fulfillment partner is a daunting and vital task for any eCommerce business.
Understanding your core competencies helps you understand the eCommerce value delivered to your customers, why customers choose your business, and why they keep coming back.
In today’s eCommerce-dominated market, companies simply cannot establish long-term customer value unless their offerings are readily available at the click of a button. And orders must be delivered quickly and correctly, with at least one option for getting it in 48 hours or less.
Understanding what creates eCommerce value
Amazon has led the way in proving the importance of a business model that focuses on customer loyalty rather than short-term profitability. Amazon Prime has created an environment where customers expect orders to be correct, free of damage, and delivered to their doorstep in two days or less, 100% of the time. Thanks to social media, customers also can influence millions of other potential consumers with a simple tweet or Facebook post.
Today’s eCommerce environment was simply unimaginable 20 years ago.
Amazon has shown the need for reliable fulfillment. That said, giving away control to a 3PL can be an especially terrifying prospect, especially if your formative business years happened before the eCommerce boom. You likely grew to be highly successful by establishing solid relationships with customers and retailers, with controlled fulfillment and limited last-mile delivery requirements.
Now, eCommerce has become a dominant retail channel. And your goal is to transition those relationships directly to end-consumers, which requires delivery to their homes. That means it’s time for a re-evaluation of your business model with three questions.
1. Is your current shipping process not a core competency?
Suppose some aspect of your shipping operations does not provide a competitive advantage to your company. In that case, finding the right fulfillment partner will drastically and positively affect your business and customers. It’ll help you avoid delays and mis-picks, minimizing customer frustration and the costs associated with refunds and returns.
Is poor fulfillment harming customer satisfaction? Find a partner whose shipping is their core competency.
2. Are you backlogged with new orders and returns?
If you’re currently sitting on a list of backlogged orders or unable to handle inbound returns, congratulations! You’ve developed a dynamic market that wants to interact with your business. However, you probably don’t want to be in the business of running a warehouse and return center, always playing catchup.
By evaluating your industry and average return rate, you can find an order fulfillment partner to make your customer interactions exceed expectations, gaining customer loyalty while saving money on your logistical operations. Another critical aspect to consider is how often you get orders out the door correctly. Can you guarantee success here?
It’s time to consider a 3PL if you’re backlogged with returns and struggling to catch up and fill new orders.
3. Is your business growing or about to scale its eCommerce value?
Have you answered “yes” to 1, 2, or both? Are you hoping to scale and grow your business?
If you’re struggling with fulfillment now, those issues will only compound as your company grows.
Don’t increase the pressure and potentially risk your margins or revenue. Do yourself a favor and evaluate a move to a fulfillment partner. Look for a company that understands you and your industry and can optimize processes to work for you.
A superior fulfillment company will do everything in its power to enable the success of your eCommerce business. So, if you’re planning a merger, acquisition, or new product launch that will drastically increase your sales, finding the right partner is critical for ensuring that your business feels the positive effects of your scaling efforts.
Discover how we help companies scale while minimizing costs, reducing order damage, and eliminating inventory shrinkage by clicking here.
Editor’s Note: This content was originally published on March 22, 2016. It has since been updated and revised for 2021.
