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The US remains one of the biggest online marketplaces with its high spending power. This makes it an extremely attractive place for eCommerce businesses looking to expand internationally.
However, the US is also known to be highly competitive towards foreign retailers, and can often have high barriers for entry.
Fulfillment providers help to ease the process of getting a first break in the US markets while eliminating roadblocks and concerns that manufacturers may have.
The reasons for outsourcing fulfillment services when shipping to the US are:
Reasons to outsource fulfillment
Connecting with the best online retailers in the USA
Stringent rules and regulations combined with a lack of local partnership can result in difficulty penetrating the US market. This is where fulfillment companies like MultiB2B help.
Utilizing their extensive connections to connect you with leading online retailers not only aids in establishing a sales network in the US, it also allows you access to big-box retailers like Amazon, Wayfair, eBay, Walmart, and more that would otherwise have high competition and barriers.
Managing seasonal sales cycles
The seasonal sale cycle is when products experience a spike in demand only during a certain period in the year. A good example is Christmas-related products, which also happens to be a big celebration in the US.
Fulfillment providers use advanced integrated warehouse inventory technology to track these products and help forecast high and low seasons, as well as advise promotions that can be run based on peak periods.
This ultimately provides you with multiple ways to maximize your profit.
Reduced shipping costs
Shipping to the US can be expensive and time-consuming. Depending on the order size, order volume, and nature of the product, it can be hard to account for and plan for or convey precise shipping costs to customers.
Choosing a fulfillment provider allows you to take advantage of their tie-ins with reputable shipping carriers and strategic warehouse locations for a small price.
Reduced overhead costs
As businesses grow, it can be hard for a warehouse space to keep up with sales volume. This can either result in lost or unhappy customers. Finding a warehouse space that has a good location, is affordable, and has the right specifications for your business is probably impossible to come by.
Fulfillment providers solve these issues by offering a wide range of warehousing capacities available based on your needs. This can also help free your business of lengthy warehouse leases and ultimately reduce your overhead cost.
Customer service
Improving customer satisfaction is an important part of any eCommerce business today. With the rise of online shopping and retailers, the ability to deal with customer needs in an efficient and timely manner separates your businesses from your competition.
By utilizing a fulfillment provider, you are able to immediately gain access to expertise and knowledge in the field that otherwise would be expensive and time-consuming to manage. This makes outsourcing a cost-effective and logical approach in the long run.
Customized inventory management
Managing inventory can become a headache to eCommerce companies especially when you factor in returns, order variances, and sales volume. The cost of employing the right people and implementing the proper technology to track and collect data can really add up.
Fulfillment providers offer inventory management services that include an automated product and order management system allowing you to properly and accurately survey your inventory at all times.
Access to sales insights and analysis
With a customizable inventory system, you will be able to collect sales insights. This includes highlighting best-selling products and identifying under-performing ones.
By collecting and analyzing data on inventory, eCommerce businesses are able to make sales forecasts, and implement marketing strategies according to product demand.
When is the right time to outsource fulfillment services?
Managing fulfillment can be technical, time-consuming, and expensive. As businesses grow and order volume increases, challenges that arise include warehouse limitations, higher shipping costs, and difficulty in logistical management.
At some point, outsourcing becomes more reliable and cost-effective.
Here are some of the reasons that indicate a good time to switch to outsourced fulfillment:
Fulfillment costs are too high
Reducing costs, and increasing profit margins are essentially the incentive for all types of businesses. Outsourcing fulfillment not only helps save costs in the long run, they also allow professionals to handle logistical tasks which in turn remove management and operational headaches from a business.
Slow delivery times
The rise of big-box e-commerce companies like Amazon has resulted in the shipping industry becoming highly competitive. Shoppers are expecting fast delivery times, and businesses that can’t compete are likely to lose customers.
This can prove especially challenging for industries that deal with oversized and irregular-shaped products like furniture, or products that need medical or judiciary approval like skincare. Fulfillment centers help customers take advantage of their streamlined shipping processes to produce more efficient delivery times.
Looking to expand your business
When order volume grows, it is common for businesses to look at expanding. This includes spending more money to branch into new markets, deal with larger orders, and increase marketing activities.
To keep up with this expansion, businesses will hire expensive logistical and technical shipping employees and acquire bigger warehouses to help sustain order requirements.
However, this can be time-consuming and costly which can financially affect companies expanding too fast in the short run. Outsourcing to a fulfillment provider can help negate these challenges and costs. It also allows business owners to take advantage of logistical experts and strategic warehousing locations for a small price.
Alleviating responsibility
As companies expand, it can become hard to maintain the same amount of responsibilities. The focus needs to be given to other aspects of the business to facilitate healthy growth.
While business owners and smaller teams may cope with operational and fulfillment tasks in early phases, these responsibilities become too big as business increases.
Furthermore, attempting to maintain quality control can become extremely expensive due to situations such as hiring a team with the right skills. Therefore, outsourcing these tasks can make the most financial sense as it not only helps alleviate responsibility but also lowers risk and improves fulfillment efficiency.
Lack of warehouse space
One of the biggest signs you need a fulfillment provider is when you no longer have enough storage for inventory. On top of the time and monetary costs associated, finding the right warehouses and implementing in-house fulfillment processes are complex procedures.
Furthermore, businesses that deal with large objects like those in the furniture industry are especially susceptible to experiencing a lack of warehousing space. This is where fulfillment centers help to solve these problems by offering different types of warehousing capabilities based on your inventory needs.
Wanting to gain a technological advantage
Lastly, many 3PL companies use advanced technology and high-cost systems in their operations. By outsourcing fulfillment, clients are able to gain a technological advantage over their competitors such as inventory management, sales insights and forecasting, and expert customer servicing.
The article is a part of our comprehensive series on “ Order Fulfillment Process in USA: Steps Involved”.
