Running a small ecommerce business is no mean feat. It requires a lot of time, effort, and capital to build a strong customer base and grow your ecommerce business.
Shipping and logistics is an integral part of operating your ecommerce business. The success of your online retail business may hinge entirely on the quality of your shipping and delivery services. After all, it doesn’t matter how good your product is if it doesn’t reach your customers on time or in excellent condition.
Taking care of all packing, shipping, and deliveries on your own may work well while you’re still starting out and only serving a few customers. As your ecommerce business grows, though, you need to reconsider your operational model to improve your logistics performance.
What Is Outsourcing?
Outsourcing business operations is an excellent way to streamline your processes, lower operating costs, and improve the quality of your services. Having a third-party service provider handle certain business functions like logistics frees up your time to focus on managing your day-to-day tasks and growing your company.
There is a wide range of tasks that you can outsource, from bookkeeping and payroll administration to marketing and administrative tasks. When it comes to outsourcing, take a look at your company, employees, and overall processes to determine your weak spots or problem areas — outsourcing these tasks may be the solution.
Weighing the Pros and Cons
Choosing between keeping your shipping in-house and outsourcing it to a third-party service provider is a big decision. After all, partnering with an outsider to take care of your shipping or deliveries can be hard, especially if you’re used to managing
all aspects of your business. It’s important to carefully weigh the pros and cons of outsourcing to ensure your choice will improve your customer service.
Pros of Outsourcing Shipping
- Reduce s
- hipping time
- More time to focus on your core business tasks
- Lower costs for both you and your customers
- Improve customer satisfaction with faster order fulfillment
- Lower the likelihood of mistakes thanks to third-party shipping providers’ familiarity with the task
- Improves your business’ scalability
- More space for storing your stock if you work with a full-service logistics provider
Cons of Outsourcing Shipping
- Less personal touches in packaging your products
- Less control over the shipping and delivery process
- Potentially higher expenses due to renting out a large warehouse space if you carry large products
- Less control over the returns process
Signs You Need to Outsource
There are three major signs that your business would benefit significantly from outsourcing tasks. One is that your business is growing too fast for you to keep up. While it may not sound like too much of a problem, you are more likely to make errors and neglect important parts of your processes.
Another sign you need to start outsourcing is if you want to expand your business but don’t want to hire more employees yet. You’ll be able to increase your productivity while maintaining your current overhead costs.
Lastly, outsourcing is a great way to improve customer service, particularly if you’re looking to outsource your shipping and delivery services. An experienced shipping or fulfillment partner can ensure a constant level of service and can streamline the process on your customers’ end. Take note: ensuring customer satisfaction through your shipping and deliveries aids in retaining customers and fostering their loyalty.
Exploring Your Options
It’s important to consider all options available and relevant to the services or products your ecommerce business provides once you’ve decided to outsource your shipping and deliveries. You also need to consider the customers whom you’re serving. Here’s a quick guide what you can expect:
Drop shipping is useful if you’re a reseller. Instead of keeping a large stock of products at home or renting out warehouse space, you simply buy the whichever product wholesale from a drop shipping company, and they take care of the shipping for you.
Hiring a third-party logistics provider may be pricey, but it offers numerous benefits. They provide services, such as receiving inventory, packing products, shipping orders, and even managing returns. If you offer several products through your online retail store, keep a considerable amount on hand, and stock up on raw materials, then outsourcing your fulfillment needs to a third-party logistics company is right for you.
App-based Delivery Platform
App-based deliveries are growing popular, particularly among online and home-based food businesses. You can partner with one of the many app-based delivery services, such as Seamless, GrubHub, or Delivery.com. Choose platforms that allow you to list your products on their website or app. This lets you reach a wider audience as well as makes the ordering and fulfillment process more convenient for customers.
Crowdsourced deliveries or crowdsourced shipping allows you to hire local residents to deliver your products as needed. The service works similarly to popular ridesharing services like Uber and Lyft and is great even for ecommerce businesses that are just starting out. You simply post the delivery job and its details and wait to get matched with a driver. It gives you the opportunity to continue handling the packaging of your products and personalize it and outsource only the delivery.
Outsource your company’s weaknesses to strengthen business operations. Remember that you’re not limited to outsourcing just one task or service, either. Consider outsourcing as many business operations as you can, so you can devote your time and effort to growing your company.