Fulfillment Center Pros & Cons
FOCUS ON BUSINESS
Utilizing a fulfillment center like Swifthouse, allows you to hand over the fulfillment process to a trusted partner so you can focus on building & marketing your business, increasing your sales, and sourcing products. Many businesses find when they focus on what they are good at, they don’t get caught up in the unnecessary day-to-day operations.
GIVING UP CONTROL
Some business owners like to be in full control of every aspect of their day-to-day operations and this includes order fulfillment. When starting to scale, control has to be yielded in many forms and these types of decisions become inevitable. It can be a hard decision to make but, in the end, if you partner with a top-rated fulfillment center like Swifthouse, it will make for an easy transition.
LOWER PAYROLL & EMPLOYEE BENEFITS COSTS
Even if you have internal staff that handles the fulfillment process, inevitably as you grow, additional manpower will be needed. A larger staff equates to higher payroll dollars and benefits packages that cut into your bottom line in addition to managing the staff. The challenge for many small and medium businesses is being busy at times and slow at other times which causes major inefficiency struggles with having the right sized staff.
CUSTOMIZATION LIMITATIONS
Some merchants like to put their own unique twist on things when it comes to fulfilling orders. Handwritten or personalized notes or even brand unique packing materials are the most common areas of customization. It’s true that when you outsource to a fulfillment center, some of these details may have to be sacrificed but the lower costs which you are able to pass on to your customers, coupled with the extra time you can spend expanding your business, will make up for these little things.
KEEP OVERHEAD COSTS LOW
There are many costs involved with handling your own fulfillment needs. You will have costs related to warehouse rental, additional staff & payroll, equipment, utilities, supplies and warehouse management software. By choosing a fulfillment center to manage these areas, you will be able to better budget and predict profits as you will know the recurring costs associated with the partnership. You can benefit from their scale to drive costs down. Packaging supplies such as boxes are exponentially cheaper when bought in bulk. Many of your current expenses will be cut altogether because your fulfillment center is already paying for them such as rent, software, and equipment to name a few.
THE POTENTIAL FOR HIGHER COSTS
Most customers will lower their overall costs by contracting with a fulfillment center, but once in a while, the choice may actually raise costs even though you are saving on shipping fees. We see this most often with sellers who deal in very small quantities and volume. In the end, these smaller customers may still actually benefit from a partnership with a fulfillment center as it allows them to focus on sales, marketing, and the overall growth of their business. A good fulfillment center will be upfront with the costs and help you make an educated decision.
DISCOUNTED SHIPPING
As an individual business, you are almost certain to pay higher shipping costs than if you contract with a fulfillment center. A fulfillment center is able to negotiate lower shipping rates with the various carriers because of the volume they output. You benefit from their scaled operation.
INVENTORY CONTROL
Taking inventory of your products can be extremely time consuming and costly. Partnering with a fulfillment center like Swifthouse. removes that burden and allows you to focus on growth. We use the most advanced inventory management tools & software available to manage and report inventory. The information is always available to you in real-time, so you know what your inventory stock is and what you need to re-order.
SPEED OF DELIVERY
Because a fulfillment center focuses on just fulfillment, in many cases your customer’s orders are processed and shipped much more quickly than if the steps are handled in-house. The lack of time or staff internally, incorrect inventory counts, and lack of space can slow everything down and delay shipping. This in turn, makes for unhappy customers, which we all know is bad for business. A good fulfillment center will have specialized employees that are experts in their fields. Smaller businesses tend to need ‘jack of all trade’ employees which can lead to mistakes and lack of overall expertise.
GROWING YOUR BUSINESS
While your fulfillment center does the work for you, you have more time to grow your business and expand. As your business grows, you don’t have to worry about moving to a larger warehouse or hiring additional staff. Fulfillment centers are equipped to handle your expanding(or downsizing) business and inventory so you don’t have to worry about finding more room for storage or paying for storage space that you are not utilizing.
DEALING WITH CUSTOMER RETURNS
The task of dealing with customers and processing returns can be extremely tedious, time-consuming, and sometimes even frustrating. When you choose to partner with a fulfillment center like Swifthouse, all aspects of customer support and returns are handled for you, alleviating the headaches associated with this part of the business.
PEACE OF MIND
Fulfillment centers have staff that is trained and knowledgeable in all aspects of order fulfillment. At Swifthouse, we take that to the next level. We are passionate about what we do and dedicated to “The Art of Fulfillment”. You can rest assured that your receiving, inventory, processing, packing, shipping and customer service is being handled by true experts in the field.
VENDORS CAN MAKE MISTAKES
It happens from time to time. Whether your vendor sends too little or too much product, the wrong product, or worst case- damaged goods, it can cause issues that need to be caught right away. When you outsource to a fulfillment center, you may not have immediate knowledge of the issue. In very rare cases, the problem does not even come to light until your customers complain. Working with the professionals at Swifthouse will minimize these issues as we make sure to stay on top of your fulfillment process from beginning to end. We notify you of any discrepancies and work together to resolve them how you want them handled. These types of issues will arise regardless of who is doing the fulfillment. A knowledgeable 3pl will be able to quickly identify it and help you minimize the problem.
MAKING THE DECISION
In the end, the pros greatly outweigh the cons but the ultimate decision on outsourcing to a fulfillment center requires careful calculation and consideration. As a retailer, you have a lot on your plate not only providing customers with the products they want but also marketing them, providing customer service and still performing the rest of your day-to-day operations. Contracting with a fulfillment center can streamline a considerable portion of those daily duties freeing up time and resources. At Swifthouse, we have been perfecting fulfillment since 2012 and have built our reputation on our dependability, innovation, and thinking outside the box. A partnership with us may be just what you need to take your business to the next level. Contact us to see what we can do for you.