One of the most important aspects of running a successful e-commerce store is having the right fulfillment strategy. Many new owners prefer to outsource their fulfillment to a third party. This is a good way to start but over time, it might make more sense to do it yourself.
This involves handling everything from storing items to packing and shipping them out. There are a lot of advantages to running your own fulfillment. In this article, we will go over several of the benefits you can expect.
1 – Reduced costs
Self-fulfillment can be a great way to save money for e-commerce businesses. When you handle your own fulfillment, you avoid paying extra fees that you would normally give to third-party services. This can lead to big savings, especially if your business sends out a lot of orders.
Having your own team for packing and shipping orders can be less expensive than using an outside service. This is because you can adjust your staff’s workload to match how many orders you have, which can be more cost-effective than paying a set rate to a third-party, no matter how many orders you’re dealing with.
Shipping costs are another area where you can save money. By doing self-fulfillment, you have the chance to talk directly with shipping companies and possibly get better rates, especially if you ship a lot of packages regularly. Using dedicated transport services for your shipping can help make shipping more efficient.
2 – Better customer service
Handling your own fulfillment can increase the level of customer service your e-commerce store offers. When you’re in charge of the entire fulfillment process you’re in control of every step.
Dealing with returns and exchanges becomes much smoother. With self-fulfillment, you can quickly process these requests and make quick decisions to resolve customer issues. Customers will remember this when they are shopping again and are likely to order from you again. This brings in extra revenue and boosts profit margins.
The data you get during the fulfillment also belongs to you and can be used to improve your processes. This direct interaction with customers offers more feedback whereas a third-party fulfillment company will not usually share this data. Understanding what customers like or dislike about your product can be used to make improvements to both your customer service and the product itself.
3 – More scalability
When you manage your own fulfillment, you have the freedom to adapt quickly to changes in your business. Sometimes it’s an unexpected surge in orders or a slow season. Many third-party fulfillment centers operate with price structures that don’t account for these differences. This increase in flexibility is a huge benefit that you won’t get when you outsource.
As your business grows, self-fulfillment allows you to expand your operations at a pace that suits you. You can increase storage space, add more staff, or invest in better technology as your order volume grows. This allows for immediate scaling up of your business.