Don't outsource fulfilment (yet)

Posted by:
Jodie Fardoe

12 Mar 2021
Operations

While you’ll read a LOT from the James and James team explaining the numerous benefits of outsourced fulfillment, they’re pretty open with the fact that it’s not for everyone.

They say many sellers just starting out in eCommerce, who are new to the wonderful world of fulfillment and haven’t yet reached the 300 – 1,000 orders per month mark, sometimes underestimate just how much time, money and effort goes into making sure their online orders end up at their customer’s doorstep.

While there are many moving parts – and perhaps an overwhelming amount of work to be done when you’re doing everything yourself – here are a few reasons why it might be best to keep your fulfillment in-house (for the time being).

Full control

It’s not been long since you launched your online business and you’re still getting to know your customers – what they like, what they don’t like. Your business is your baby and before you run, you’re walking, but you have 100% control of every element – including your pick, pack and ship process. While your brand is small, you can clearly see what’s going on – and that gives plenty of reassurance.

With scale, you can begin looking at outsourcing areas to specialist partners so you don’t spread yourself too thinly trying to do absolutely everything.

Things aren’t as efficient as you’d like, but they’re working

Perhaps you’re recording everything manually on a spreadsheet or printing labels straight from your eCommerce platform. It’s not the most efficient way of managing your order flow (and you’d rather not do it from your dining table), but it’s working for the volume of products you’re currently shipping. It goes without saying when you reach higher volumes, this way of doing things might slow you down.

Sales are steady, but not yet at an overwhelming rate

As you’re starting out, you’re finding sales are consistent but not yet pushing you to the point of panic and chaos. Perhaps it’s taking just a few hours a week and so self-fulfillment is likely a more cost-effective way to get these orders to customers – for now.

If you’re looking to run promotions, just make sure you’ve got everything (and extra helpers) around to help fulfill any surges in demand.

Your storage space isn’t yet fit-to-burst

You’ve got enough stock on-hand to fulfill the current rate of sales. You don’t need to bring in more stock as it’ll just sit gathering dust, and your shelves are never completely empty.

Of course as demand grows, you’ll need more of your super products ready to ship. At that point you’ll realize more space is needed and leasing your own additional warehouse just sounds like too much stress and expense. And so, outsourcing would be viable.

When you do decide to outsource, when the time is right, you may need to ‘let go’ of an operational area of your business, but you’ll still have full visibility.

- James and James Fulfillment

Things to look forward to (when it’s the right time to outsource)

Ding-ding! You’ve reached the point where you’re needing to ship over 300 customer orders a month and it’s time to outsource the responsibility to a specialist eCommerce fulfillment partner.

While it was no easy feat getting to this point, you’ll now be able to wave goodbye to those self order fulfillment stresses and enjoy…

Favorable carrier rates

You know that by outsourcing, you’ll achieve better overall postage costs which you hadn’t been able to before. These rates can be passed onto your customers, thanks to the fulfillment partner’s tight-knit connections and partnerships.

Fulfillment houses, like James and James, send high volumes of parcels which means they can secure those preferential rates for you via dedicated account managers at major carriers.

Unboxed packaging savings

Even though you’re scaling up, it’s always good to review any revenue leakage and keep tabs on spending.

One particular area where your fulfillment partner can help you streamline costs is packaging. Inside the exciting box of outsourced fulfillment benefits is better pricing from packaging manufacturers, as well as a wider range of box types and materials to create the ultimate unboxing experience for your customers.

Core insights

While standard inventory tracking programs – or even pen and paper – worked for you while you fulfilled manageable order sizes yourself, when you ramp up to the 300 mark, it may become slightly harder to keep a track of everything in one place.

The likes of James and James offer an extension to their fulfillment services by way of ControlPort. This is a cloud-based hub of super inventory metrics that you can use wisely to inform decisions such as purchasing and marketing planning.

An extra pair (or hundred of pairs) of hands

Essentially your outsourced fulfillment partner should be an extension to your brand and company, with troops of expertly trained fulfillment personnel. When you’re onboarded, these people get to know your brand, your products, and your mission. They’re here to delight you and ultimately – your customers.

You can look forward to easing off on the operational stuff, the literal picking and packing of orders, and focusing on the next stage of business growth. No more queuing at the Post Office!

More space, more sales

With over 300 orders going out the door, you’re going to need more storage space. When you get to the point of outsourcing, you’ll only pay for the space your product is actually occupying on the shelf, and there’ll be plenty of flexibility to account for any peaks and troughs in order volume – at Christmas, for example.

Crystal clear costs

Some third-party logistics providers (3PL) give ‘off the shelf’ blanket pricing for their fulfillment services, but others – like James and James – will give you a tailored proposal based on your business, order volume, product type/size and various other factors that make you unique.

A number of eCommerce retailers that joined James and James started out by packing and shipping customer orders from home, like Dope Ropes. When these business owners made the move, they appreciated the clear-cut billing and visibility of costs. Keon, Founder of Dope Ropes said, “I probably started to save two to four hours per day at peak by not having to fulfil in-house.”

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James and James Fulfillment

It all began in 2010, when James Hyde and James Strachan couldn’t find a modern shipping service for the eCommerce business they ran. Faced with messy warehouses based on out-dated systems, they decided to build their own.

We’ve not stood still since, helping hundreds of online brands scale up – and scaling with them.