4 Reasons to Outsource Fulfillment

Mar 24, 2012 12:08 AM  By

Every merchant wants the problem of rapid growth. But the issues that can arise from this scenario – delayed shipping, product backorders, and angry customers – are also every merchant’s worst nightmare.

When the capacity of your operations is compromising the health of your business and the achievement of your goals, merchants should consider solutions that can put them back in control.

For many fast-growing companies, that solution is outsourced order fulfillment. Here are four reasons why:

Scalable operations
Warehouse space isn’t free. As your business grows and you sell more product, you’ll need to stock more product – which will require additional facilities and staff. When you work with an outsourced fulfillment warehouse, you will have access to both without investing additional time and money on infrastructure or equipment. As your business continues to expand (via acquisition, expansion, or good old-fashioned sales increases), your fulfillment provider can scale with you.

Faster, better delivery options
Many outsourced fulfillment providers offer multiple warehouse locations, allowing a retailer to spread operations across a larger geographic area as their customer base continues to expand. By selecting a provider with locations central to its core customer base, a merchant can offer faster and less expensive shipping options to more buyers – and save on its freight costs as well.

Top expertise and vendors
Merchants who grow quickly often lack the leadership experience or knowledge to manage the challenges that come with that rapid growth. Partnering with a seasoned fulfillment outsourcer brings industry expertise to your retail team without having to seek out and pay for in-house talent. In addition, an outsourced provider also brings its clients a network of top vendors of everything from packaging supplies to freight carriers – all at a more economical cost than a stand-alone merchant can typically achieve.

Focus on growing your business
The day-to-day process of running a warehouse is hard enough – scaling labor, maximizing space layout, organizing and tracking inventory, etc. These tasks are multiplied when orders are coming in faster than they can be sent out. With a third-party provider, operational issues are addressed and handled by the operations team (makes sense, right?). This leaves the merchant’s management team to focus on more long-term initiatives and additional opportunities for growth.

Matt Konkle is president of
Fifth Gear, a provider of outsourced order fulfillment services.