Shipfusion Blog

The Importance of Outsourcing Supply Chain Management in eCommerce

Choosing the right partner can make or break your company’s logistics, customer service, and repeat purchases. Using an eCommerce fulfillment center like Shipfusion frees you from navigating the eCommerce fulfillment landscape with zero stress. Below are some insights on how Shipfusion can take your business to the next level.

As an eCommerce store owner, you already have enough on your plate when it comes to running your business. Dealing with costly and untimely supply chain issues is not something you want to add to your list of responsibilities. Having to juggle customer service, inventory shortages, and product returns will eat up your time and ultimately affect your bottom line.

Your supply chain is vital to your company’s success, but without the right technology, staffing, and expertise, the time and money spent on logistics can quickly add up, and there’s no guarantee that doing it yourself will make financial sense.

Instead of spending your resources trying to build and optimize your supply chain, you would be better off outsourcing your supply chain management to an expert.

What is Outsourced Supply Chain Management?

When you outsource your supply chain management, you are letting a third-party logistics (3PL) company handle your warehousing, eCommerce fulfillment, and shipping processes to improve your supply chain. Rather than investing in the infrastructure needed to be competitive, you outsource your company’s logistics to a reputable provider to help maximize profitability while freeing up your time to focus on growing your store.

eCommerce Fulfillment: Benefits of Outsourcing

Outsourcing your supply chain management provides several advantages that can improve your company’s reliability and profitability. The key to getting the most out of a successful partnership is finding the right 3PL partner to address your company’s unique needs.

Reduced Costs

Trying to run the entire supply chain for your company in-house is an expensive operation that requires expertise in logistics to ensure you’re not wasting money. The biggest advantage of outsourcing your supply chain management is reducing the costs associated with warehousing, overhead, eCommerce fulfillment, and shipping.

By hiring a professional 3PL company, you can rely on their expertise to help you optimize your eCommerce fulfillment processes and reduce overall expenses. Having your logistics streamlined will also make you more competitive by giving you the option to offer more affordable shipping for your customers.

Faster Shipping

Outsourcing your fulfillment to a 3PL company with an expansive fulfillment center network will allow you to provide fast and reliable shipping to your customers. Instead of shipping your entire inventory from just one fulfillment center, you can split your inventory between multiple eCommerce fulfillment center locations to cut down on shipping times and costs to your customers—no matter their location.

When working in the hyper-competitive eCommerce landscape, you have to do whatever it takes to gain a competitive advantage. Having an expansive shipping network makes it possible for you to offer special deals to your customers, such as free shipping and express delivery.

Increased Flexibility

Having a 3PL partner outsource your supply chain will make it easy for you to adapt to changes in customer demand. By outsourcing, you can downsize or expand your inventory without having to worry about making changes to your warehousing space or staffing numbers. You also have access to an extensive network of fulfillment centers, so when you’re ready to grow into a new market, your 3PL partner will already have you covered.

More Time to Focus on Growth

By outsourcing your supply chain, not only are you saving money, but you also free up your most valuable resource: your time. Instead of devoting your resources and energy towards warehousing and fulfillment services, you can spend more time focused on changing market conditions and consumer preferences.

As your store grows, your fulfillment partner will grow with you by helping you expand into new locations and increase product inventory. They can also provide insights into how you can expand and optimize your fulfillment strategy to best suit your customers’ needs. When your store does well, your 3PL partner does well, so they have an incentive to help you grow.

Risks of eCommerce Fulfillment Outsourcing

While the benefits of outsourcing your supply chain management are numerous, you need to be aware of some potential risks. Knowing what risks are out there will help you make better decisions about choosing which logistics partner to sign on with.

Partnering with the Wrong 3PL Company

Choosing the wrong 3PL company to work with your business can be disastrous. Whether it’s a reduction in quality standards, missed shipments, or delivery of damaged or incorrect goods, these unfavorable outcomes can do a lot of harm to your business.

But the good news is that these issues can be avoided by doing your research before signing a long-term commitment with a 3PL partner. To reduce your risks, question all potential logistics partners about their knowledge of your products or services and their customer service expectations. They should have extensive knowledge of what you sell and must be able to provide consistent and reliable service across their entire distribution network.

Unexpected Costs

A common reason businesses are hesitant to outsource their supply chain is the assumption that outsourcing logistics and fulfillment will raise their costs. But what they fail to understand is that there are also many costs—both upfront and hidden—to self-fulfillment. To avoid unexpected costs, you want to work with a provider that is transparent about their costs so that you can determine if the partnership makes financial sense.

Do your due diligence to ensure that your potential 3PL partner doesn’t have any hidden costs such as labelling, packing, and shipping. To avoid getting blindsided by hidden fees, make sure to ask your 3PL partner about their pricing structure and if there are any additional charges for particular services.

Long Onboarding Process

Every 3PL company has a different onboarding process. But one similarity they should all have is a quick and easy process to get you started right away. It’s essential to ask questions about what information your partner will need from you. You should ask how they plan to integrate with your store and what it will take for them to set up and configure your account.

If they show signs that it will be a lengthy process to get up and running, you might want to search elsewhere. A partner that is slow to get you integrated into their system is likely to be slow with other processes that are vital to your company’s success. You want to look for a company that has a simple onboarding process that can start fulfilling and shipping your orders as soon as possible.

Outsourcing Your Supply Chain with Shipfusion‘s eCommerce Fulfillment Service

Outsourcing your supply chain management is a big step in your business journey but a vital decision that can lead to rapid growth if paired with the right outsourcing partner.

Shipfusion can improve your supply chain by combining flexible, reliable fulfillment with powerful, real-time technology to give you the best fulfillment solutions for your store. With warehouses located across the US and Canada, we make it easy and cost-effective to reach your customers.

When you choose to outsource with Shipfustion, you have access to a suite of tools and resources to help achieve your goals. Some of the services we offer:

●  Real-time inventory sync and visibility

●  Advanced data analytics of SKU popularity, days left in stock and re-ordering suggestions

●  Notifications of product returns

●  Automatic order processing

Whether you’re a traditional retailer, crowdfunded campaign, or subscription service, we can provide customized eCommerce solutions to best fit your business model.

Frequently Asked Questions

Here‘s a list of answers to the most common questions with regards to outsourcing supply chain management:

What Does It Mean to Outsource Your Supply Chain?

Outsourcing your supply chain refers to hiring a third-party logistics company to handle your warehousing, fulfillment, and shipping processes. Outsourcing your supply chain to a logistics expert can help optimize your eCommerce supply chain while letting you focus on other areas of your business.

What Are the Benefits of Outsourcing?

There are many benefits to outsourcing your logistics to a 3PL provider, given that you’re a good match. The primary benefits include reduced costs, faster shipping times, and freeing up your time and energy to focus on how to grow your business.

What Are the Risks of Outsourcing?

The most significant risk to outsourcing your logistics is picking the wrong 3PL provider. Before selecting a partner, you want to be aware of any hidden costs, how they handle customer support, and if their fulfillment network services the areas where your customers are found. If you can get these three things right, the benefits of outsourcing your supply chain will significantly outweigh any risks.

Shipfusion sets your business on autopilot and combines flexible, reliable fulfillment with powerful, real-time technology. Shipfusion has multiple fulfillment centers across the US and Canada– making it easy to manage your eCommerce business. For more information on how to set your business on autopilot, contact one of our fulfillment specialists today.

“Part of the theme at Shipfusion is that we don't constrain our clients. We work with them as business partners, which allows them great flexibility to work with other 3PL solutions and still take advantage of Shipfusion services.”

Dean Bentley-Falcke
Senior Solutions Architect and eCommerce Specialist
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