As on ecommerce business owner, you might constantly find yourself wondering how to boost your online stores profit margins. If you’re like many of us out there, then shipping is most likely a hefty part of your expenses. Many ecommerce entrepreneurs struggle to create strategic order fulfillment strategies that contribute to their margins in the long run.
One of the best ways to stabilize your margins and increase your profits is to partner with a fulfillment warehouse who can manage the logistics and supply chain end of your business
If you find yourself coming to conclusions like we’re too small to outsource order fulfillment or it’s too expensive, then you really need to think again and see the bigger picture. The advantages of using a reliable ecommerce fulfillment company are endless as they can save you some serious money and eliminate most of your headaches.
How Outsourcing Fulfillment Can Save You $
Heres a few examples of how outsourcing order fulfillment can maximize your bottom line.
Only Pay For What You Use
When handling order fulfillment in-house, you’re going to need to rent warehouse space. If you’re not utilizing every inch of your warehouse space daily, then you’re loosing money when space sits empty which impacts your margins. Using a fulfillment company gives you the flexibility to only pay for the space you use in the given period of time. So if your’e out of inventory and you’re not getting a new batch soon, you won’t be billed for the space until your products arrive. When renting your own warehouse, you’ll be responsible for paying rent and utilities (water, power, internet, shipping software, …) even if your warehouse is empty.
Cut Out Operational Costs
In-house order fulfillment comes with the need for employees, software, property insurance, and more. With an order fulfillment company, you’ll eliminate your need for all of that. No more stress abut payroll and other bills that never stop piling.
The startup costs alone to get your fulfillment warehouse up and running would run into the tens of thousands. Costs include first month rent/last month rent/security deposit to lease your space with a 1 year commitment, property insurance for the lease, computers, barcode scanners, shipping software, supplies, and much more. With an order fulfillment company, your one-time startup costs are usually $0 and the software to track your items is included.
Get Cheaper Shipping
When you partner with a 3pl order fulfillment company, you get the benefit of using their shipping discounts with major shipping carriers. Due to the larger volume of shipments, fulfillment companies have the ability to negotiate better shipping rates for most shipments. This ultimately saves you a lot on shipping and really contributes to your margins.
You’ll never be limited to the volume of inventory you can handle at any given day or time. Third party order fulfillment gives you the ability to scale your business as you need. No need to move to a bigger warehouse and increase your payroll, instead you operational costs ultimately decrease as you grow.
No More Headaches
Without having to manage payroll, multiple employees, and dozens of other bills, wouldn’t your life be easier? Most people would say,”it certainly would!” Many reputable ecommerce fulfillment companies offer software you can use to manage your inventory, orders, and more from anywhere in the world. Outsourcing order fulfillment makes management stress-free and easy.
In conclusion, outsourcing order fulfillment gets a lot off your shoulders, offers you unlimited scalability, and stabilizes your profit margins. Feel like your’e ready to take your business to the next level? Get in touch with a ShipZag expert for a free consultation.