This is Part One in a two-part series.
Even though you have the benefits of having no storefront to manage (and all the hassles that go along with that), your online business has its own hassles.
Running an online business isn’t always as simple as some of the talking heads would have you believe – and as you start drowning under orders you’re starting to realize that. Managing inventory, being sure that orders are packaged correctly and shipping out those orders accurately are essential – but they don’t have to be your job.
Order fulfillment may be seen as a necessary part of the online business process but you don’t have to handle this aspect yourself. In fact, outsourcing fulfillment can bring you direct competitive advantages through cost savings and reliability. It can also bring indirect cost savings through freed up time to focus resources on marketing and other important parts of the business.
But how do you know when it’s time to make the switch from in house to outsourced order fulfillment? Be sure to ask yourself the following questions about your business and your goals:
- Is growing your business getting pushed further and further down your priority list?
If online business success were as simple as setting up a website and letting the orders roll in, you could spend all of your company’s time on order fulfillment.
Unfortunately, you’ve realized that in order to grow your business you need to spend time on product development (or sourcing), marketing, advertising and PR. You’re facing stiff competition no matter what industry you’re in, so these business growing tasks are important. When your order fulfillment needs are crowding out your business growth activities, you need to make a change.
- Are your sales experiencing significant seasonal shifts year-round?
Once you’ve been in business for a few years, you should be able to predict the pace at which your sales will spike and fall. If you are seeing a variable amount of sales year round, but your costs like warehouse space and fulfillment technology are fixed, your profit margins could be taking a huge hit.
Outsourced fulfillment services can help you weather these spikes and dips with more ease. Since more fulfillment companies work with a per volume rate, you’ll be able to shift from a fixed expense model to a variable rate model which will help with cash flow.
This is Part One in a two-part series. Read Part Two here.