Most small businesses when starting out will largely take care of themselves and handle all their functions internally, from purchasing goods, to marketing goods, to selling and shipping them. They can do this because they have personnel and customer base small enough to cater to with minimal effort. As you expand your businesses and start to really get the ball rolling, you may start to find that your assets are becoming a bit unwieldy.
Why Outsource Fufilment?
Imagine, if you will, a business being much like walking a dog. Handling one is easy enough, while walking two or three is a bit more effort but perfectly manageable. Now imagine trying to walk a whole pack of dogs, six canines and up, and trying to keep them all under control. Then imagine how much it costs to keep each dog. That’s a lot like what it’s like to manage a business once it expands. The larger an organisation becomes, the more difficult, and usually more expensive, it becomes to efficiently oversee and control every segment of it. Once this occurs, it may become necessary to start to outsource certain tasks such as fulfilment.
If you like, you’re sending some of your pack off to new homes that can more easily see to the dogs’ needs, while you keep the dogs you most prefer to look after.
Outsourcing fulfilment services
Fulfilment houses are one such means of reducing costs and effort involved with warehousing, packaging and distributing your goods and services to your customers by pretty much doing it all for you. Depending on the agreement between the company and fulfilment house in question, they may also handle other tasks on your behalf as well, such as customer service and replacing lost or damaged goods. Certainly if your business is something like a bakery, a printing firm or an online marketplace, chances are the actual distribution and storing of goods is not the part of the job that you most looked forward to doing when you first started up. Fulfilment services can help you keep your business focused on what you want it to, while it handles the rest. All for a fee of course; charity has no meaning in business, after all.
Certainly outsourcing pick and pack to a fulfilment house, as well as reducing a lot of management burden on your part, is a very cost effective way of dealing with the distribution of your goods and services. For one thing, unless you’re shipping out several thousands of items a month, you’re unlikely to be getting the better value bulk rates for shipping. A fulfilment house can also be negotiated with more readily, allowing you to get better rates for distribution or a better tailored deal regarding what they’ll handle on your behalf. Very usually the fees with employing a fulfilment house to handle your finished goods can be outweighed by how much you save.
Issues to consider
Of course this also comes with the cost of surrendering control over the details of shipping, packaging and customer service over to a third party. While this means less stress and less cost, it will also mean if something goes wrong with distribution or the goods in question, you can’t directly do anything about it, however a good order fulfilment organisation with do all their power to rectify the situation. To show just how unfair the world of business is as well, if something does go wrong, your company will receive the backlash from it, not the distribution house. They will also not generally accept responsibility for damages or shrinkage of goods, unless the contract you have with them places it firmly within their hands (for example, if they’re required to verify product lists).
Choosing a organisation
There are numerous companies that offer services as a fulfilment house, such as Orbital Response, or Amazon Fulfilment Web Service. Orbital House in particular is a growing fulfilment house that operates within Kent. For more information, please visit their website and see their contact page.