To thrive in e-commerce, you need to quickly and efficiently fulfill and ship online orders. By evaluating and optimizing your current fulfillment strategy, you can save time and money and give your business a competitive advantage. COVID-19 has dramatically changed the way consumers shop and behave. More Canadians are shopping online than ever before. As a result, you may be experiencing increased demand. Now is the perfect time to take a step back and improve your fulfillment.
Work with a 3PL partner to optimize fulfillment
E-commerce growth leaders recognize the importance of effective fulfillment strategies. Many of them work with third-party logistics (3PL) providers to manage fulfillment efficiently. 3PL providers store e-commerce goods and fulfill orders on behalf of e-merchants. A recent study revealed that growth leaders are 3 times more likely to say that outsourcing fulfillment will be a high priority for them over the next 12-18 months¹ compared to the rest of the market. When’s the last time you took a hard look at your fulfillment strategy?
If you’re considering outsourcing fulfillment, we’ve enlisted the help of the experts at SCI Logistics, a leading 3PL provider in Canada, to help you determine if outsourced fulfillment is right for your business. Here are some key considerations to keep in mind when making this critical decision:
Outsourcing fulfillment can help you manage growth
SCI says outsourcing is critical if you are growing in an unpredictable way. “An outsourced model is a hedging plan against uncertainty, and is becoming standard practice in a world of demand and geographical expansion”, say the experts. 3PL providers have expertise in, and an understanding of, peak fulfillment and consumer expectations and trends. Partnering with them allows companies to grow exponentially without a painful in-house learning curve.
An outsourced model is a hedging plan against uncertainty, and is becoming standard practice in a world of demand and geographical expansion.
3PLs also offer flexible space which can help your company affordably manage growth. You can increase space as you experience peak volumes, and scale it back when necessary. Working with a 3PL provider enables you to avoid the high costs of leasing or owning in-house fulfillment space.
Outsourcing fulfillment enables you to focus on selling
You can sell more when you don’t have to stay on top of the day-to-day operations surrounding order fulfillment. Through a strong client partnering approach – complete with frequent business reviews and KPI tracking – 3PL clients are able to monitor their distribution operations and inventory while ensuring productivity.
According to SCI, “leveraging the expertise of 3PL providers to handle the ever-growing complexities of fulfillment allows you time to focus your efforts on selling.”
Leveraging the expertise of 3PL providers to handle the ever-growing complexities of fulfillment allows you time to focus your efforts on selling.
When you outsource fulfillment, there’s no need to understand local real estate, labour and market requirements as your 3PL provider will take care of those details for you. Outsourcing also makes inventory management easier as your 3PL partner can provide you with updated warehouse management systems (WMS).
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Find the right 3PL partner
Don’t rush into a 3PL partnership. Before you reach an agreement, ensure that it will be beneficial for your company. If you’re unsure of how best to assess the benefits of a potential agreement, the experts at SCI recommend taking the time to:
- Tour the 3PL company’s facilities and get to know the operators. When you understand how their fulfillment centres work, you’ll feel more confident about your partnership and entrusting them with your orders.
- Determine how they handle unexpected increases in demand and peak season volumes. Order volumes ebb and flow, so understanding how they can enable your company to handle a high volume of orders is essential.
- Understand the value their partnership could bring. Focus on the costs but be sure to also explore their strengths and expertise. Look for a high-value partner rather than just the most affordable partner.
- Ensure your values align. This is a critical partnership with a high level of collaboration. Carefully choose a partner that shares similar values and culture and relies on a similar calibre of talent to your own organization. If your work ethic and staff are comparable, your partnership will be more likely to succeed.
- Talk to reference clients. You’ll gain great insights into what success for your partnership will look like, and you’ll determine how the 3PL provider has added value to other businesses like yours.
Maximize your partnership
Maintaining transparency around your business will be key to maximizing the potential of your partnership. The better your 3PL partner understands your company’s short and long-term trends, strategies and business plans, the more effective they will be in supporting your business operations. “The best partnerships occur when there are open discussions about the broader business environment,” say SCI experts.
The best partnerships occur when there are open discussions about the broader business environment.
Think of your 3PL partner as a part of your team. Involve them in your strategic planning and invite them to key discussions surrounding business challenges. The more informed your partner is, the better they can help you find additional ways to reduce costs and improve customer experiences. These discussions can lead to the development of innovative ideas and solutions for your business.
Know your business and do your research
If you’re growing quickly, and have the means to outsource, third-party fulfillment is worth exploring. Take the time to research and evaluate all of your fulfillment options to ensure that you are making the best decision for your business. A 3PL partnership might be just what you need to grow and thrive.
1 Canada Post. 2019 eMerchant Study, 19-201, August 2019.
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