Outsourcing your logistics to a fulfilment company?
As a webshop owner, you can outsource your logistics process or part of it to a fulfilment company. The choice between running your own warehouse or using a fulfilment service is very personal. Some webshop owners outsource tasks to fully focus on growth, while others prefer to maintain control over all processes to better ensure quality.
In this blog, we’ll provide some guidance to help you decide whether outsourcing your logistics to a fulfilment company suits you and your webshop.
What does a fulfilment company do?
A fulfilment company takes over the process after an order has been placed in your webshop. This includes picking, packing, and shipping products. They also manage your inventory in their warehouse. Your suppliers can deliver products directly to the fulfilment partner’s warehouse, and their staff ensures everything is stored in your allocated space.
Fulfilment companies now offer a wide range of services, including:
- Full order handling, from picking to shipping
- Inventory management
- Receiving and preparing purchase orders from your supplier
- Handling and processing returns
- Customer service
- Flexible delivery options such as same-day delivery and evening delivery
- Assembly of bundled products
- Product personalization
- Special packaging for orders
Some fulfilment companies even offer marketing and product photography services. Most services are offered in standard packages, but many providers are flexible and can adapt to your specific needs.
When is outsourcing valuable?
Outsourcing can be a smart move if you want minimal involvement in order fulfilment. It also helps if you do not yet have a warehouse, as it allows you to scale without large upfront investments.
Most fulfilment companies charge variable fees based on the number of orders shipped and the cubic meters of space you use in their warehouse. This can be more cost-effective than the fixed costs of running your own warehouse.
If your webshop is growing rapidly, you might find yourself constantly outgrowing your warehouse. Moving and upgrading facilities repeatedly is expensive. With a fulfilment partner, scaling is usually easier because they have the necessary space. You also avoid the burden of hiring and training warehouse staff.
It also allows you to experiment more easily with services such as “order before 11:30 pm, delivered tomorrow.” Fulfilment companies can offer these delivery options at competitive prices because their staff work late hours for multiple webshops.
Pricing can include packaging materials, goods receipt, order processing, inventory management, and more. This provides transparency and helps you determine if outsourcing is financially viable.
Fulfilment companies often have better shipping rates due to their high volumes. If you have international ambitions, some fulfilment companies collaborate with global carriers.
Or would you rather manage your own warehouse?
When you outsource logistics, you also give up some control. Mistakes in order handling can negatively impact customer experience, which is a common reason to keep fulfilment in-house.
Running your own warehouse also gives you more freedom to personalize orders with custom packaging or handwritten notes. Although some fulfilment partners offer this as well, it typically requires special arrangements.
Many webshops have their offices next to the warehouse. This creates a stronger connection with the products and the team. It also allows you to act more quickly if something goes wrong.
Is outsourcing right for me?
Webshop owners have different styles. Do you prefer to outsource and focus on rapid growth? Or do you want to stay in control and invest in your own warehouse? Think carefully about what matters most to you.
The type of products you sell also matters. If you sell large items, you will need to rent more space from a fulfilment provider, which can become costly.
Also consider your current stage. If you already have a warehouse, you’ve made a significant investment, so switching entirely to a fulfilment company may not make sense. However, you could consider outsourcing only your fast-moving products to free up space. In some cases, shipping certain items may even be cheaper through a fulfilment partner.
If you don’t yet have a warehouse, start by estimating the costs of setting one up. Then compare these with the costs of using a fulfilment company. Without an existing investment, starting directly with a fulfilment provider may be the more cost-effective route.
Compare multiple fulfilment providers. Prices and services can vary. Some are geared toward large webshops, while others welcome smaller shops with growth potential. Some focus heavily on automation, while others offer custom solutions like adding a scented spray to each package for a better unboxing experience. Take time to choose the one that fits your needs best.
