Hybrid order fulfillment allows companies to get products to customers in multiple ways. It gives you options to find faster fulfillment, cut costs, or see if you can streamline operations to alleviate headaches.
Hybrid models can support you as you grow into new regions or if current practices aren’t designed to scale. Your existing warehouse may not be able to fit a new product line, or your top-selling SKUs may require more equipment than you have the budget for today. Sometimes, you just find a new group of customers far away, and current last-mile fulfillment costs eat up too much of your margins.
There are many reasons fulfillment can break down or become an ungovernable sprawl. Instead of trying a single response and hoping it works, hybrid order fulfillment gives you a chance to test multiple responses. In many cases, it helps you discover the perfect solution or mix. That’s why Red Stag Fulfillment encourages you to consider it when fulfillment gets tough.
What is hybrid order fulfillment?
Hybrid order fulfillment is a fulfillment approach where you combine and mix multiple fulfillment partners or operations to get all your orders to customers. Typically, you separate these by the channel or type of end customer. So, you may fill orders for what you sell on your website or social media one way while using a different partner to fill truckload or B2B orders. Companies may also separate fulfillment and order management based on products or customer locations.
Your control is at the core of hybrid order fulfillment. You retain the ability to conduct business how it makes the most sense for your company. If you want to outsource a product or channel that’s growing beyond your ability to scale, that’s an option. Or, you can choose partners to handle domestic fulfillment so your team is focused on international growth if a new market skyrockets.
Let’s say you want to start offering charcoal for your grills. Why not find a 3PL partner who can fill those orders? That way you don’t have to worry about retrofitting a warehouse space to hold flammable materials or paying the higher insurance rate around those products. The 3PL may also have better carrier rates for these heavy bags, allowing you to sell a recurring subscription around your grills, but not having to manage this influx of labor.
You’re still making the decisions that are right for your business. And in many cases, outsourcing in this model can simplify the work you need to do. That turns a chaotic in-house effort into a stable, reliable operation thanks to new partners. In many cases, you’ll also get guaranteed quality and service levels to help protect your operations.
What options make fulfillment hybrid?
You can use any combination of options as part of a hybrid order fulfillment program.
So, you could begin with self-fulfilling and then add drop shipping to the mix for products you’re buying straight from a manufacturer or supplier. This reduces your burden and makes it easier to try new products or markets, or pull away from options that don’t generate sales without having a large pool of slow-moving inventory.
The drop shipping risk is that you don’t have as much control over the experience. Manufacturers will package products how they see fit and use whatever carrier relationships they have. Their teams pack orders and set the unboxing experience, and sometimes their branding is at the forefront.
Control is the tradeoff. You never have to worry about inventory or product management. However, you may not be able to expand popular lines — so there is no guarantee you’ll get bigger sizes or a new blue color that customers ask for. But, you don’t have to worry about finding storage space, adding on warehouses, or covering related insurance and expenses. Those are all reflected in the ease of drop shipping, but its lower margins.
3PLs can support hybrid models too
When you want to create more products or have an influx of orders, hybrid models make it easy to expand. Working with someone like Red Stag Fulfillment to outsource some or all fulfillment efforts still allows you to maintain oversight of your effort. We handle the daily operations and keep everything moving slowly so you can focus on big picture growth and broader supply chain management.
3PL services make it easier to reach customers faster, plus you get branding work such as support for custom packaging, tape, and infill. You’re outsourcing but have a deeper relationship with the partner because you’re still buying inventory, working to inbound it to 3PL facilities, and integrating tools to optimize order management and customer satisfaction.
The most important aspect is finding the right partner to help. Hybrid order fulfillment needs to work for your products, locations, and customers. It should benefit your operations, not hinder them. Potential partners should be willing to discuss this with you and help you determine the right mix.
Staying in control
Hybrid order fulfillment supports more substantial growth by clearly splitting fulfillment. You choose how operations control each aspect of fulfillment, based on what reduces expenses or improves the customer experience. You could retain control of fulfillment where customers want a personal touch, but outsource high-volume sales channels so that you don’t have to worry about expanding physical space or hiring a larger workforce.
Many companies work with us to fill orders for specific channels or regions as they grow. You might have your own facility in the central U.S. but then work with our locations in Salt Lake City and Knoxville to reach each coast quickly. This split speeds up fulfillment while also saving you significantly. When sales boom, you can be sure that we already have the team to handle more inventory and orders. Plus, you still get our guarantees on order accuracy, speed, and zero shrinkage.
How is the hybrid model beneficial?
Broadly speaking, hybrid order fulfillment is one of the most flexible solutions for an operation like yours, because you are able to turn on and off the channels you need when you need them. And we know that flexibility is a crucial driver of success in today’s turbulent supply chain market. Hybrid models make it easy to see what works and change what doesn’t. Sometimes, you’re testing different kinds of operations, sometimes with just partial inventory.
You may discover that your manufacturer is already shipping orders successfully to consumers. Drop shipping can eliminate some inbound and last-mile expenses for you, which may make up for the margin loss.
Fulfillment companies with specializations, like Red Stag’s focus on heavy and bulky goods, may have better discounts for your most costly items. In this case, it could make sense to have us ship your flatpack furniture to customers while in-house customer support agents and warehouses handle replacement parts or small up-sell units.
When your customer base changes, hybrid order fulfillment models can make it easy to test what works for these new targets. One 3PL’s relationships with regional carriers may be more beneficial. Or a new partner may have a nearby facility that dramatically cuts last-mile costs. For example, if you were selling bulk supplies of road salt, but your HQ is located in Southern California, you’d want to partner with a 3PL in the northeast to ensure you’re as close as possible to the population that needs your products most.
Find your pain point, such as cost, shrinkage, or orders arriving late. Use these to guide partner selection. And then implement a hybrid model to test your options. That’s what many of our customers have found to be the most valuable part of this order fulfillment.
Hybrid’s secret sauce: Testing
We encourage people to try hybrid order fulfillment because it gives you a straightforward way to test the validity and support of different fulfillment services or self-fulfilling processes. You can use a standard set of metrics to compare multiple options to see what works for you. Integrate your order management tools with CRM and other internal data, and your sales partners can help you identify the solutions your customers love most.
This direct comparison is one of the most honest ways to help your operations. If you choose to test Red Stag alongside internal or other 3PL partners, we’ll work with you on it. That means delivering metrics and clear data to show when we’re better than other solutions or make sense for certain products.
We do this internally and share results with every customer regularly. That’s especially important during your crunch time, like year-end holiday sales. Compare our holiday success rates to your other operations by clicking the image below.
How Red Stag unlocks the potential of hybrid order fulfillment
Don’t let hybrid order fulfillment be something you think about but never try if your current partner or in-house efforts aren’t performing. Red Stag Fulfillment works with many new partners initially as part of a hybrid approach. That way, you can see how well we perform without a total disruption of your eCommerce efforts. Plus, when you like what we do, the experience makes transitioning more of your fulfillment efforts to Red Stag a simple, yet effective action.
Ask us about initially splitting fulfillment based on products, locations, sales channels, and more, plus how we can bring in other areas after a positive first step.
The best fulfillment is one that works for you and your customers. It’s that simple. Red Stag’s experts are available to discuss your operations and find places where testing fulfillment could reduce expenses and headaches. We encourage you to try a hybrid model to ensure you’re running as efficiently and affordably as possible.