If you’re running an e-commerce business, there are three options available to you: having your items shipped directly from the seller, warehousing them yourself, or using a fulfilment service. It might be difficult for some business owners to understand why people use a fulfilment service, but there are many benefits to having a professional team handle shipping and inventory. Let’s take a look at some of the benefits and drawbacks of using a fulfilment service.
Pro – Professional Inventory Management
If you decide to run your own warehouse, you’ll soon find out how complex inventory management is. It’s easy to get things wrong here and one small error could have serious consequences. On the other hand, you could use a service like Zendbox that will allow you to manage your inventory in real-time using their state-of-the-art proprietary tools. They’ll allow you to manage shipments and returns more easily and work them into your inventory. They use advanced tracking technology to know how many units you have at any given time and will even alert you if you’re running low on certain items as well.
Con – Less Control
Some people will not like giving a third-party control over their inventory, however. Some may have products they feel are too delicate, specialised, or precious to be handled by a fulfilment centre. However, you can always check the reputation of a service before you hire them and see how financially stable they are. Visiting their operation will allow you to see how much care they handle their clients’ inventory with.
Pro – Lower Overheads
Managing a warehouse costs a lot of money. You will have to cover for things like rent, equipment, and hiring employees. The last one is one of the biggest issues for many starting companies.
It’s very difficult to retain warehouse workers nowadays with all the competition. If you’re operating on tight margins, you might not be able to offer the salaries or benefits other bigger and more established companies can. Having to spend on an HR department and constantly hiring and training employees can put a serious strain on your bottom line. Fulfilment centres, on the other hand, have all of this down already. They can afford to offer advantageous packages to employees. They have more resources and experience and will give you roughly the same results as running your warehouse at a much lower cost.
Con – Less Customisation
Know, however, that you won’t be able to have as much control over the shipping process. If you want to use special materials, branding, shipping boxes, or even personalised letters, for instance, you might have to give some of them up. This could end up affecting your branding and sales depending on the nature of the product, so be prepared for that.
As you can see, fulfilment centres have tons of things going for them, but they’re not perfect. You should do your research on them and see if they might allow you to run a more sound operation.