Imagine this scenario: You have a great product and a growing customer base, and the online orders are coming in. But as your ecommerce business continues to grow, the pressure is on to get hundreds of orders fulfilled correctly and on time.
When it comes to warehousing and fulfillment, ecommerce retailers have a choice: do it yourself, or outsource to a network of third-party logistics (3PL) partners.
In this post, we’ll go over five reasons why outsourcing is the best choice for many businesses.
Time and resources
The first reason to outsource your fulfillment is obvious: many business leaders don’t have the time or resources to lease, staff, operate, and manage an entire warehouse.
Securing warehouse space requires a significant outlay of cash, which can mean taking on new business loans. Particularly for ecommerce retailers who are just starting out, redirecting vital funds away from product development, marketing, and customer service to cover warehouse space is too risky.
Hiring the right 3PL partner means that warehousing matters are taken care of, so you can focus more time, energy, and investment in growing your business.
Warehouse worker safety
When you own a warehouse, you’re responsible for the safety of the workers in that warehouse, and strict regulations must be followed to reduce the risk of injury or death.
In the U.S., OSHA oversees workplace safety, and issues fines for violations. Here are just a few of the numerous ways warehouse employees are frequently injured or killed, according to OSHA:
- Hit by forklifts/trapped under overturned forklifts
- Falling or jumping off docks
- Hit/crushed by falling boxes, shelves, or other materials
- Improper lifting of heavy materials
- Chemical spills
- Electrical fires
In 2019, OSHA fines increased to: “$13,260 per violation for serious, other-than-serious and posting requirement violations; $13,260 per day for failure to abate violations; and $132,598 per violation for willful or repeated violations.”
If you don’t have experience running a warehouse, you can easily bankrupt your business and be held responsible for any harm to employees.
When you outsource warehousing, on the other hand, you limit your liability, and trust an experienced partner with worker health and safety — giving you more peace of mind.
Access to technology
On your own, you may not be able to afford cutting-edge warehouse management software.
In order to minimize headaches and maximize ROI on warehousing, you’ll want a warehouse management system (WMS) with best-in-class data analysis, web-based inventory access, EDI communication, and more.
3PL partners typically contract with multiple clients and have extensive experience, giving them the budget and expertise to choose and implement the best warehouse technology. When deciding on a 3PL partner, consider the warehousing technology that will most benefit your business and how it will integrate with your existing tech stack.
If you’re just starting out with a warehouse, chances are it will take some trial and error before you get your operations smoothed out to a point where you can offer reliably fast, accurate fulfillment to your customers.
Unfortunately, in 2020, customers aren’t going to grant you that grace period.
A 2018 Hanover Research survey found that when it comes to online shopping, about a third of consumers rank fast delivery as the most important consideration, and 63% expect delivery within three days.
Similarly, a survey from Convey on consumer expectations for holiday shopping found that 79.3% of consumers feel that free 2-day shipping is important, and 72.7% of consumers say they’re unlikely to purchase from a brand again after experiencing a poor delivery experience.
For a relatively new ecommerce business, meeting these high expectations is particularly vital, and can mean the difference between retaining customers or immediately losing their trust.
A good 3PL partner will be able to provide excellent fulfillment speed right off the bat, enabling you to get shipments out on time and build positive relationships with customers.
Due to high consumer expectations around quick shipping, more and more retailers are moving their warehouses closer to urban centers.
That means demand for warehouse space is high, and so is the rent, so you may not be able to afford warehouse space in the places where the majority of your customers are located. Especially if you’re just starting out, partnering with a 3PL partner that already owns warehouse space is a smarter move.
In addition, operating nationally (or even internationally) will require you to have inventory stored in several warehouses across the country, not just one central hub. Working with 3PL partners that already operate nearby to your biggest customer bases is a key component of a modern fulfillment strategy.
When you leave warehousing to the warehousing pros, you can focus on running — and growing — your business.
Partnering with a 3PL partner like GlobeCon can save you and your business time, money, risk, and hassle, and allow you to meet consumer expectations right out of the gate. That’s why outsourcing warehousing and fulfillment is an excellent option for many ecommerce retailers.
Let GlobeCon handle the warehousing logistics. Contact us.