Statistics suggest that most small business owners feel more overwhelmed by simply working in their own businesses. Recent surveys estimate that this number is between 70 and 86 percent, which is a lot higher than professionals who feel overwhelmed by their positions.
The biggest challenge is that they have limited funds to hire enough staff, resulting in burnout, fast dwindling of funds, and ultimately collapse of the business. Professionals argue that freeing up resources and outsourcing some elements, such as information technology, accounting (sorting out taxes, handling payroll, and paying bills), and logistics (via fulfillment services) can allow entrepreneurs to focus on the core business, which is growing their sales.
Outsourcing Order Fulfillment
As small businesses begin to outgrow their small operations, especially ecommerce businesses, they require more space to store and process stock keeping units (SKUs). Scaling operations leads to what is arguably the most complex part of order fulfillment, namely storing and shipping orders yourself. If you are unable to handle many orders yourself in a timely manner, your initial profits can quickly turn to losses.
As you plan to move your inventory from your home or office to a warehouse, it is important that you find one that also offers fulfillment services for small businesses. This is the logical solution for a growing business that does not use a drop shipping model or have the necessary resources – a warehouse, good shipping rates, and an experienced logistics team. This allows you to focus the resources you have on growing your business.
Other reasons to consider working with a logistics company to handle warehousing and fulfillment include:
- Access to relevant technology
By working with a logistics company that is established in the space, you can take advantage of their existing infrastructure to ensure smooth order shipments. Logistics companies can invest in tracking infrastructure, software development, staff trainings, and other resource – and time-intensive undertakings that you may not be able to.
- Cost-effective solution
Depending on the nature of the product you are selling, you may not need to rent a warehouse throughout the year. For instance, if you deal with seasonal products, you only pay for what you need when the time comes. This includes storage of inventory, packaging and kitting, and shipping.
If you have a sudden increase in the number of orders and shipments you have to make, it is best to have an experienced professional handle the deliveries. Otherwise you risk overwhelming your simple logistics system, which could lead to inefficient order fulfillment and a loss of business.
Generally, fulfillment services can help a small business scale, but only if it has the funds to outsource the service. Also, it is important to find a logistics company that meets your needs, especially if you are in a specialized business. Although most companies can tailor their services to suit your needs, it may not always be possible to outsource your order fulfillment.
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