When Should You Outsource E-commerce Fulfillment?

The value of e-commerce in the Middle East in 2020 amounted around 17 Bn USD of which 5.5 Bn USD was in the Saudi Arabia, and 4.5 billion USD was in the UAE market; source: Statista. For years now e-commerce industry has been on the forefront of growth – be it apparel, furniture, optics, pharmaceuticals or numerous other products. Covid-19 pandemic encouraged many consumers to switch to online shopping, paving way for SMEs and start-ups to dive into the e-commerce industry. But we all know, it does not come easy! Fulfillment is one of the most critical aspect of e-commerce, and many companies still contemplate whether or not to outsource e-commerce fulfillment to a 3PL.

What Do We Mean By Outsourcing E-commerce Fulfillment?

E-commerce fulfillment process starts right from receiving an order from a customer and goes on till delivering it. It includes receiving stock, storing them in the warehouse, processing incoming orders, picking and packing and shipping them to the customer address.

Enhancing the efficiency of e-commerce fulfillment operations should be the topmost objective of any company. Why you ask? It contributes in in reducing costs, improving customer delight and streamlining other operations. Therefore, many companies do their best to make their fulfillment operations effective, but usually forget the fact that it can be outsourced to an expert, a 3PL company that has the expertise, infrastructure and technology to handle it. Our previous post on Services Offered by 3PL Fulfillment gives an in-depth idea about this.

Outsourcing your e-commerce fulfillment to a 3PL like ProConnect Integrated Logistics, means letting us handle the entire order fulfillment process, while you oversee and monitor the operations from anywhere and anytime – thanks to our integrated system capabilities. Outsourcing to a 3PL is a good move because it not only reduces overheads, but also improves efficiency.

Does the decision of outsourcing e-commerce fulfillment still bother you? We’ve listed a few points below that could help you decide.

So, When Should You Outsource Your Fulfillment Operations?

Here are some of the indications that should help you evaluate the need to outsource your fulfillment to a 3PL like us.

Wide Shipping Zone – Shipping zones are spread across zone 1 to 9. These zones are determined by the area around the warehouse facilities, fulfillment and distribution centers from where the products are shipped to the end customer. The lower the zone number, the closer the area is where the package is shipped from. If your average shipping zone is more than 5, than there is a good chance you will benefit from outsourcing your order fulfillment.

Why? Because major chunk of your cost goes into shipping – inbound and outbound both. Reducing shipping cost and shipping time by storing inventory closer to your demand market can help in saving huge costs. Partnering with a 3PL who can provide warehousing and fulfillment services closer to your customers is good when your shipping zones are wide. Additionally, 3PLs like ProConnect Integrated Logistics can also help with your freight forwarding and sourcing requirements, among other things.

Limited In-house Resources – While you may already have an in-house logistics team, but is it big enough to handle the growing demands across multiple markets? While your in-house team can definitely multi-task and undertake several other functions, wouldn’t they be missing out on the things that they have experience in? Also, setting up the tech infrastructure could prove to be cost intensive and a fixed overhead. Instead of pushing your existing in-house resources, partnering with a 3PL can be useful in many ways, for one – their warehouse and operations staff have the expertise to handle growing customer demands, not to mention their advanced system capabilities. Thus, hiring a 3PL for your e-commerce fulfillment in such a scenario would be a good decision.

Keeping Track of Inventory Gets Difficult – Inventory, or stock, is the most critical part of any e-commerce business. The entire business typically depends on having the right amount of inventory and keeping it in check. Keeping track of the inventory of each of the products you sell can become challenging when your offering goes beyond just a few SKUs. Incorrect inventory report or stock count can lead to an imbalance in the supply and can cost you your customers and even your revenue. Having a robust system in place could bring in efficiency in accuracy in stock keeping. While this is a huge investment in itself, with a 3PL partner – it costs much lesser, plus you get to shift the responsibility of inventory report to the 3PL. A 3PL like ours has a robust Warehouse Management System (WMS) that can integrate your system with ours and provide real time visibility to your inventory.

Operations Across Multiple Channels – If you have your products listed not just on your website but also on other marketplaces, then it is vital for you to manage orders from each of them. Each e-commerce marketplace has it’s own set ways, it’s own integrations and it’s own policies. Managing multiple marketplace can be a headache, appointing a 3PL to manage orders through their advance tech-infrastructure can bail you out of this, reducing costs, streamlining systems and bring in much required efficiency.

These are some of the signs that can help you determine whether or not your require outsourcing your e-commerce fulfillment to a 3PL. We are an experiences 3PL company with 21 warehouses and fulfillment centers across UAE and Saudi Arabia – and would be happy to help you with your fulfillment queries. Contact us today.

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