4 Ways Business-as-a-Service Improves eCommerce Fulfillment
Getting your product to customers is one of the most important and fundamental aspects of eCommerce.
It’s no wonder, then, that brands are reluctant to give up control of fulfillment. The thought of outsourcing fulfillment to a third-party can dredge up visions of sloppy packing, mistreated products and one-star reviews.
That’s rarely the case in reality, however. In fact, a business-as-a-service provider can take your fulfillment operations to a whole new level.
Scale Infrastructure Without Increasing Overhead Costs
When you handle your own order fulfillment, at some point you’ll outgrow your warehouse. This may seem like a big step in the right direction. Growth is good, after all. But renting or purchasing new warehouse space can become very expensive, and you could find yourself paying for space that you don’t need.
Third-party fulfillment providers offer a way to sidestep this problem. For one, you’ll only pay for the warehouse space that you need. This makes it a much more cost-effective option. Fulfillment centers will also scale with your business, allowing you to pay for more space when you need it. This allows brands to grow their business organically, without having to worry about how they are going to significantly boost sales to cover bloated overheads.
And when your revenue growth doesn’t keep pace with your warehousing capabilities, things can start to get really expensive. “Constantly scaling your distribution up or down in order to meet your customers’ demands can be detrimental to your business’ progress,” says the team at Evans Distribution Systems. Renting new warehouse space is expensive, but it gets more expensive when you aren’t using it to its full potential.
The team at ShipMonk points out that it’s not just warehouse space that you will have to scale as your business grows. Adding SKUs and growing your number of sales channels will make fulfillment even more complex, which means new hires to manage those complexities. With a third-party partner, however, you can scale without having to worry about whether your fulfillment capabilities will be able to keep up.
Even if you wanted to keep fulfillment in-house, you might not be able to match the rate at which you grow. This was the case for sunglasses retailer Sunski, James Melton at Digital Commerce 360 writes. Having experienced a 20- to 30-percent increase in sales for six straight years, the company wasn’t able to pack and ship products fast enough, Nor was it able to scale operations quickly enough. In the end, Sunski turned to a third-party logistics provider for help.
Improve Operations With State-of-the-Art Technology
A robust technology stack is required to ensure orders are shipped to the right addresses as soon as possible. This tech is hard to build, and it doesn’t come cheap.
With a BaaS partner that can take on fulfillment provision, you don’t have to spend time or money building the systems necessary to make sure shipping and returns run smoothly. The team at MAI makes a similar point: Your fulfillment partner will already have these kinds of industry-leading management and tracking systems in place.
What’s more, you don’t just get access to this state-of-the-art technology, the team at Floship writes. You get access at a fraction of the cost that it would take to build it yourself.
That also means you can lean on a fulfillment center’s technological capacity to improve your own offering, writes ShipBob’s Kristina Lopienski. This can give you the ability to provide expedited shipping for additional fees, improve delivery times, provide real-time tracking and better forecast your inventory.
Think of your fulfillment partner not as a giant warehouse but as a tech company, advises Red Stag Fulfillment’s Jake Rheude. That means when choosing a third-party BaaS fulfillment provider, it’s important to find one with the right technical chops. For instance, their systems should integrate with every platform your brand sells on. Downtime should be minimal and support should be responsive. In short, you’ll want to research the technology side of the business as much as the actual fulfillment process when selecting a service provider.
Get Access to a Network of Locations
In today’s eCommerce environment, brands need a network of fulfillment centers to survive, writes Supply Chain Dive Associate Editor Matt Leonard. Thanks to the likes of Walmart and Amazon, customer expectations have grown higher and higher. Two-day delivery is now the norm. Soon, it might be one-day.
Thankfully, partnering with a third-party fulfillment company gives DTC brands access to exactly that: a network of warehouses across the country.
This offers a number of advantages when it comes to managing your brand’s fulfillment, says eCommerce writer Armando Roggio. “It costs less to ship orders to customers close to your business’s warehouse. What’s more, it should also take less time for shipments to arrive at your customer’s location when that location is nearby.”
In a big country like the U.S., offering fast shipping to all of your customers is only possible by either having your own network of warehouses or by partnering with a company that does.
Those aren’t the only benefits, however. The team at Rakuten Super Logistics points out that a network of fulfillment centers helps eCommerce brands to reduce risk. When you have all of your inventory in one single location, you are only one disaster away from losing everything.
Focus on Growing Your Business While Experts Take Care of Everything
Your team are experts at creating and marketing your product, but they probably aren’t experts when it comes to fulfillment. By partnering with a third-party BaaS fulfillment provider, you’re effectively hiring a team of experts. These are experts who understand the industry and who have handled complex fulfillment requirements thousands of times before. What’s more, they are able to take fulfillment management completely out of your hands.
With the management of your brand’s fulfillment covered, you are free to focus on the activities that grow your business, writes HubSpot’s Allie Decker. Of course, outsourcing to a BaaS fulfillment provider doesn’t mean you give up full control. “Even when completely outsourcing fulfillment, you still have a handle on inventory and numbers. Often 3PL partners will provide a synced inventory software so you have a live view of your product’s movement.”
Bag manufacturer Dagne Dover has leveraged third-party fulfillment solutions to help grow the company. Founder and COO Deepa Gandhi explains that working with such a provider “has allowed the company to focus on what it is good at and that is designing the perfect bag. It enabled us to allocate resources where we need them the most which is not running a packing and shipping operation.”
When you outsource to a third-party BaaS fulfillment provider, you aren’t losing control of your warehouse. The quality of your packaging isn’t going to drop, and you aren’t going to waste money. The opposite is true. By partnering with fulfillment experts, you’ll have the opportunity to improve every facet of your fulfillment management. That means better tracking, greater flexibility, and cheaper and faster deliveries. You’ll even buy time to focus on strategies that grow your brand even more.