Things to consider when choosing a fulfilment company
Your business could produce the most impressive product on the market, but if your packages aren’t reaching your customers safely and on time – you’ll be falling behind your competitors in the blink of an eye. For this reason, choosing the right fulfilment company for your e-commerce business is an important decision.
With the right fulfilment partner in your corner, you’re one step closer to brand success and booming product sales. With the wrong fulfilment provider, you could be attending to avoidable mistakes and responding to some unhappy customers. In this blog from Allegro Logistics, we explore 8 things that a business should look out for when choosing an e-commerce fulfilment provider.
For more useful articles related to fulfilment and fulfilment services, take a look at our blog, articles include: Inventory Valuation Methods for Stock Management, The Importance of Real-Time Order Tracking for E-Commerce Fulfilment, A Guide to Reverse Logistics and Returns for E-Commerce.
How does a Fulfilment Company Handle its Inventory Management?
When outsourcing fulfilment to a third-party provider, it is important to consider the potential benefits in store for inventory management. Each fulfilment provider will offer a different service, so it’s useful to get clear on each provider’s inventory management plan before choosing. Using a fulfilment company takes a huge weight off a business in terms of inventory storage and management.
Not only does outsourcing free a business of the day-to-day handling of their inventory, but they no longer have to store their full inventory on-site! Many fulfilment companies offer their clients real-time digital access to software that allows them to track sales and levels of inventory, allowing the head office to stay in the loop regarding how inventory is being managed and processed.
What are the Costs of Using a Fulfilment Company?
Outsourcing fulfilment can often be seen as a costly choice – however, long term, it is likely that your business will make considerable savings on in-house labour costs. When managing fulfilment in-house, businesses must oversee labour, overheads and packing supplies amongst other costs that may be unforeseen or change from one month to the next.
One key advantage of using an external fulfilment provider is that such third parties are often able to access better rates from carriers due to the volume of items they may ship for their numerous clients. With this in mind, it is important to ensure these discounts are translated into discounts within a fulfilment provider’s quoted costings.
What Packing Options Can a Fulfilment Company Provide?
Another key area of difference between fulfilment providers will be the variation in packaging they provide.
After taking the time to develop business branding, businesses will be keen to find fulfilment providers that adhere to their image for their product and its packaging. In addition, should a business produce a wide range of products, a range of different packaging types may be required to fulfil their orders. Having the appropriate packaging for a product also limits the likelihood of a package becoming damaged in transit.
In addition to external packaging options, it is important to pay close attention to the interior packaging options available with each fulfilment provider. This will be of particular relevance if your business produces fragile products – you’ll want peace of mind that your desired protective layer (Styrofoam peanuts, corrugated paper, foam rolls, shredded paper, bubble wrap, or air pillows) is available and within your budget!
In addition to the materials used to pack products, the quality of packing execution could be a distinguishing factor from one provider to the next – so seeing some mock parcels might be a worthwhile request.
Learn more about the benefits of custom packages for small businesses >
How Will Using a Fulfilment Company Impact Shipping Speed?
With leading online retailers now offering next-day delivery to the masses, shipping speeds are more important than ever. The modern-day consumer expects to receive their parcel more promptly – with slow parcel turnaround proving a disincentive for shoppers.
High-performing fulfilment companies should have efficient and effective fulfilment procedures that allow them to get products to customers as quickly as possible. As a business expands, this becomes particularly possible when a fulfilment provider has numerous, strategically located fulfilment warehouses and effective order fulfilment software.
Learn more about the software integrations available at Allegro Logistics >
How Does a Fulfilment Company Manage Returns?
In the modern consumer space, returns are almost inevitable – so it’s important to ensure that your fulfilment provider doesn’t take their foot off the gas once the orders have been shipped. It is suggested that almost 30% of all online orders are returned. For this reason, a business must ensure that the management of its returns is as smooth running as initial shipping.
While some returns cannot be prevented (e.g. dislike of product), many fulfilment providers will have recommendations regarding methods of reducing returns – for example providing procedures to limit returns due to product or packaging damage.
How Might a Fulfilment Company Impact Customer Experience?
While it may not be an immediate consideration, using a third party to manage fulfilment and returns may have a considerable impact on customer experience. If a fulfilment provider is causing delays in product dispatch or failing to secure and protect parcels, a business will likely see decreased customer satisfaction and a larger number of returns.
In addition, many fulfilment centres offer returns within their services. With becoming more and more popular, ensuring that customers can return items seamlessly will have a central impact on customer experience.
Learn more about how to improve the customer experience of your ecommerce business >
Will using a Fulfilment Company Limit Growth Potential?
Another important factor to consider is whether or not your business intends to expand within its short or long-term plan. Switching fulfilment providers can feel like quite a hassle, so it’s best to opt for a provider that will accommodate the needs of your business long term. If this is taken into account, it will be more possible to expand both in terms of product volume and shipping destinations.
Where are Fulfilment Warehouses Located?
As previously mentioned, high-speed delivery is becoming increasingly important to the average consumer. When it comes to facilitating speedy deliveries, the location of your fulfilment warehouses and centres plays a key role. The closer your fulfilment centre is to your end customer, the shorter the distance your product has to travel to reach them – not to mention the reduced shipping costs.
When it comes to choosing a location, it is wise to opt for a fulfilment warehouse local to your primary customer base. By doing this, your business maximises the likelihood of its primary customers having a positive, efficient order fulfilment experience.
As your business expands to a wider client base, it is important to assess the ability of your fulfilment provider to ship further afield or even internationally – further demonstrating the importance of anticipating any increases in scale for your business.
Point of Sale Fulfilment & Distribution with Allegro Logistics
Allegro Logistics are an integrated E-Commerce Fulfilment Solution Based in Bristol. Our combined team have an extensive breadth of experience in the logistics field and our range of services cover
E-commerce Fulfilment, POS Distribution, Domestic Shipping, International Shipping, Storage and Returns. For more information about how our services could help your business, request a quote today. To read more articles about wider logistics topics, take a look at our blog.
Read Next: Inventory Valuation Methods for Stock Management >
Read Next: The Importance of Real Time Order Tracking for E-Commerce Fulfilment >
