Three reasons a small business should outsource fulfillment to a 3PL
October 23, 2017
We live in a world where consumer expectations are higher than ever and a business cannot survive on a great product alone. Companies must provide a seamless online purchase process, exceptional customer service, frequent status updates, fast delivery options, and an easy returns process. A business can quickly become consumed by the intricacies of getting products from point A to point B.
If you’re not yet comfortable outsourcing operations to a third-party logistics (3PL) provider currently, consider these three important reasons why it might make sense:
1. You’ll be able to focus on your core business
What’s your why? Why did start your own business or believe in the business you joined? Why are you driven to succeed every day?
“Most entrepreneurs go into business because they’ve found their passion. That passion typically isn’t to pick, pack, and ship. We handle everything after the submit button is pressed so they can focus on their brand and their business.”— Dan Coll, senior manager of e-commerce fulfillment, FedEx Supply Chain
Everyone from the founder of a one-person start-up to the CEO of a Fortune 500 company is passionate about what their product delivers to the end-consumer — whether that’s a new pair of glasses, an outfit for a special day or a life-saving medical device. The complicated process of delivering products to end-consumers, however, is not something many people are passionate about. That’s why 3PLs have developed engineered solutions to ensure the right product gets to the right place at the right time efficiently and without disruptions along the way. Many small businesses consistently struggle with failed customer payments, inventory accuracy, picking, packaging and shipping orders, damages, corrugate design and ordering and approving or managing returns.
By entrusting the fulfillment process to a 3PL, you’ll free yourself up to put as much of your energy as possible into your core business and refocus on your passion.
2. Automate and scale your operations
As you grow your business, maintaining fulfillment operations in-house will potentially require home-grown systems and the acquisition of talent and expertise — both of which mean increased resources. Hiring sales, marketing/brand, product, and administrative staff often falls within the core competencies of small business owners, but hiring operations and fulfillment teams are quite different. Accessing the right talent pool, complying with labor regulations, and managing hourly schedules and seasonal fluctuations is complex. While outsourcing may feel like larger leap than incrementally increasing resources, partnering with a 3PL can actually enable you to grow more quickly.
Working with a 3PL means you can leverage an existing network of facilities, material handling equipment, technology and labor without having to find or build it yourself. Instead of researching options, posting jobs, recruiting, hiring and training an entire workforce, tap into a structure that’s already in place. Fulfillment providers often have relationships with staffing agencies and local organizations to maintain the necessary number of workers — which is especially difficult during peak. In addition, a fulfillment provider should have enough data and experience to understand any specific requirements per market required to recruit talent effectively. For example, a fair hourly rate, competitive benefits package or labor laws for a warehouse worker may vary by state.
Additionally, the culture of an organization influences productivity and talent retention among warehouse teams. High morale — whether through your own efforts or a 3PL — elevates retention rates and becomes a competitive advantage. A 3PL also has the capacity to provide the necessary onboarding and training in order to ramp quickly, ensure safety and hit appropriate productivity. Seek a fulfillment provider with a people-driven culture that focuses on efficient operations and outstanding service.
While some 3PLs require a high minimum volume to get started, FedEx® Fulfillment works with customers from the very early stages of your business and grows with you. This turnkey solution is available to a wide range of company sizes and product types and can be a part of your initial growth strategy rather than a milestone you have to wait to achieve.
3. Ensure your customers always have a positive experience
On time, accurate deliveries are table stakes for doing business in the e-commerce space and a seamless experience can lead to repeat purchases as well as customer referrals. But, avoiding errors while there are so many moving pieces in your business can be extremely difficult if you are fulfilling in-house. Don’t test new processes or systems on critical customers and get caught up managing damage control. A 3PL can handle warehousing, distribution, fulfillment, shipping and returns, so that you can avoid the errors that may result from a self-distributing operation.
When you choose to work with a 3PL, you’re leveraging proven systems, implemented by supply chain experts and dedicated teams that should have nearly error-free shipments. Look for a fulfillment provider with consistently high KPIs in inventory and order accuracy and on-time shipments. Not only will this lower the stress and level of reactivity for you, it will decrease customer service requests and encourage repeat purchases.
Even if you don’t feel ready to outsource your fulfillment operations to a third party, it’s never too early to learn more about the options and prepare for when you are ready. Our FedEx Fulfillment team takes a consultative approach to building solutions with you, so we won’t force you into a solution you don’t need. Contact us and tell us about your company’s unique needs and learn more about our fulfillment solutions.
FedEx Supply Chain is a leader in integrated supply chain solutions. Our expertise in value-added warehousing and transportation services is based on decades of experience. In addition to serving many Fortune 500 companies, FedEx Fulfillment is our all-in-one solution for small businesses. Ask how we can help your business grow while delivering a differentiated customer experience.