{"id":11638,"date":"2022-09-23T13:16:13","date_gmt":"2022-09-23T13:16:13","guid":{"rendered":"https:\/\/appscenic.com\/?p=11638"},"modified":"2022-11-07T10:50:57","modified_gmt":"2022-11-07T10:50:57","slug":"4-challenges-of-outsourcing-your-ecommerce-fulfillment","status":"publish","type":"post","link":"https:\/\/appscenic.com\/blog\/4-challenges-of-outsourcing-your-ecommerce-fulfillment\/","title":{"rendered":"4 Challenges of Outsourcing Your Ecommerce Fulfillment"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Did you know that for online retailers, the average cost to fulfill an order is <\/span><a href=\"https:\/\/www.conveyco.com\/ecommerce-order-fulfillment-statistics\/\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">70% of the average order value<\/span><\/a><span style=\"font-weight: 400;\">?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Order fulfillment involves complexities and intricate planning. It is also something that largely impacts your end customer experience.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Be it timely delivery, international shipping, or inventory management, online retailers will need to figure out what role order fulfillment will play if they want to remain relevant.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As a result of this, online retailers are extensively choosing to outsource or at least plan to adopt a hybrid approach to order fulfillment.\u00a0<\/span><\/p>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone size-full wp-image-11639\" src=\"https:\/\/appscenic.com\/wp-content\/uploads\/2022\/09\/How-order-fulfillment-works.png\" alt=\"How order fulfillment works\" width=\"1196\" height=\"416\" srcset=\"https:\/\/appscenic.com\/blog\/wp-content\/uploads\/2022\/09\/How-order-fulfillment-works.png 1196w, https:\/\/appscenic.com\/blog\/wp-content\/uploads\/2022\/09\/How-order-fulfillment-works-300x104.png 300w, https:\/\/appscenic.com\/blog\/wp-content\/uploads\/2022\/09\/How-order-fulfillment-works-1024x356.png 1024w, https:\/\/appscenic.com\/blog\/wp-content\/uploads\/2022\/09\/How-order-fulfillment-works-768x267.png 768w\" sizes=\"(max-width: 1196px) 100vw, 1196px\" \/><\/p>\n<p style=\"text-align: center;\"><a href=\"https:\/\/www.dhl.com\/content\/dam\/dhl\/global\/dhl-supply-chain\/documents\/pdf\/dhl-glo_e-commerce-growing-pains_research-report_en.pdf\" target=\"_blank\" rel=\"nofollow noopener\"><i><span style=\"font-weight: 400;\">Source: DHL<\/span><\/i><\/a><\/p>\n<p><span style=\"font-weight: 400;\">If it is the logistical complications that are forcing you to opt for outsourcing, you can consider <a href=\"https:\/\/appscenic.com\/\" target=\"_blank\" rel=\"noopener\">dropshipping<\/a>. Dropshipping allows you to manage the front-end operations of an online store, without having to deal with order fulfillment. Your <a href=\"https:\/\/appscenic.com\/dropshipping-suppliers\/\" target=\"_blank\" rel=\"noopener\">suppliers<\/a> will send out the order directly to your customers. You can concentrate on marketing and generating sales for your dropshipping store, while your suppliers take care of the rest.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But, if you are still leaning towards the outsourcing model, you need to understand the challenges that come with it and determine if it\u2019s the right time for you to outsource.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Let\u2019s take a look at some of these challenges.\u00a0<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_76 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d8a20339fac\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d8a20339fac\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/appscenic.com\/blog\/4-challenges-of-outsourcing-your-ecommerce-fulfillment\/#1_Loss_of_Control\" >#1 Loss of Control<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/appscenic.com\/blog\/4-challenges-of-outsourcing-your-ecommerce-fulfillment\/#2_Cost_of_3PL_services\" >#2 Cost of 3PL services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/appscenic.com\/blog\/4-challenges-of-outsourcing-your-ecommerce-fulfillment\/#3_Lack_of_customization_options\" >#3 Lack of customization options<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/appscenic.com\/blog\/4-challenges-of-outsourcing-your-ecommerce-fulfillment\/#4_Integrating_with_another_system\" >#4 Integrating with another system<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/appscenic.com\/blog\/4-challenges-of-outsourcing-your-ecommerce-fulfillment\/#Finishing_thoughts\" >Finishing thoughts<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"1_Loss_of_Control\"><\/span><strong>#1 Loss of Control<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">When you outsource your order fulfillment to a third party, you also hand over the entire responsibility of your customers\u2019 delivery experience to them. There are chances your customer may end up getting a damaged product or a late delivery, all because of your delivery partner.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Also, you don\u2019t have any control over how the product is packed, how and when it is shipped, and how it is stored.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To overcome this fear of loss of control, choose a reliable and reputable <\/span><a href=\"https:\/\/www.packsend.com.au\/couriers-freight\/courier-services\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">delivery service<\/span><\/a><span style=\"font-weight: 400;\"> that aligns with your customer experience goal. Instead of taking complete responsibilities, having a strong logistics partner will help you focus on other core tasks of online retail.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"2_Cost_of_3PL_services\"><\/span><strong>#2 Cost of 3PL services<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">For many small online retailers, it\u2019s heavy on the pocket to outsource their order fulfillment. Hiring Third-party Logistics (3PL) services don\u2019t come cheap. You need to have higher liquidity to ensure their payments are met.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">At this stage, it makes sense to keep the fulfillment in-house, especially when you don\u2019t have a large number of orders.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is something that you can overcome as you scale. As your business grows, you can find a partner that is best for businesses your size and capacity. You can also calculate the costs of in-house fulfillment and outsourcing to understand which is cheaper.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"3_Lack_of_customization_options\"><\/span><strong>#3 Lack of customization options<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Most delivery service providers are set up to deliver large volumes of goods. So naturally, it\u2019s challenging if you have a niche product line that requires special storage and or even want to personalize your packaging or offer gift wrapping.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To counter this challenge, you need to prioritize between value offering and scaling. Determine if your value-added efforts pay off in terms of costs and profit.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While looking for a 3PL partner, also look if they provide delivery services for packed and fragile goods, oversized, or highly valuable items and reach an agreement.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"4_Integrating_with_another_system\"><\/span><strong>#4 Integrating with another system<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Logistics service providers use a Warehouse Management System (WMS) which has to seamlessly integrate with your shopping carts, communication, and billing software.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, the infrastructure requires a substantial overhead investment, and expansion into these new channels can be particularly challenging.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In this case, you need to ensure you bring robust and flexible systems onboard for effective fulfillment. Some 3PL providers also offer pre-integrated shopping cart solutions to minimize programming.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Finishing_thoughts\"><\/span><strong>Finishing thoughts<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">You will reach a point where there\u2019s no option but to scale. And unless you have enough capital to continue your delivery efforts in-house, outsourcing is an inevitable action you\u2019ll have to take. And while we discussed that outsourcing is not going to be easy, it is certainly a sign of growth and something you\u2019ll be able to address after the initial hurdles.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><em><strong>Article by Oliver Thyra<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Did you know that for online retailers, the average cost to fulfill an order is 70% of the average order value?\u00a0 Order fulfillment involves complexities and intricate planning. It is also something that largely impacts your end customer experience.\u00a0 Be it timely delivery, international shipping, or inventory management, online retailers will need to figure out [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":11640,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,52],"tags":[28,66],"class_list":["post-11638","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-dropshipping","category-ecommerce","tag-dropshipping","tag-ecommerce"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/posts\/11638","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/comments?post=11638"}],"version-history":[{"count":0,"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/posts\/11638\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/media\/11640"}],"wp:attachment":[{"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/media?parent=11638"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/categories?post=11638"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/tags?post=11638"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}