Is the fulfillment service expensive or cost-effective?
Why and how you save on business costs by using the services of a company to fulfill orders.
Startups and small business owners usually want to know if it's still possible to save money if they don't have thousands of orders each month. The answer is yes!
Usually small or start-up owners want to be directly involved in the execution of orders , but once they realize how useful and cost-effective it can be to outsource logistics, they change their minds.
Internal Fulfillment or Outsourcing Fulfillment?
When you rely on dealing with the execution of orders yourself, there are several costs that you need to keep in mind. To get an overview of how much the company's internal fulfillment will cost, check out the list we have prepared for you:
- Warehouse for rent
- Warehouse equipment
- Inventory management software
Warehouse for rent
A fixed price for renting space large enough to meet the needs of the business can limit cash flow. The amount spent on rent could be used to acquire new customers or to cover other important costs. In addition, if you run your business from home or office, you will need to travel to the warehouse regularly to make sure everything is working smoothly. You may even need to hire a warehouse manager to oversee the order execution process.
Warehouse equipment is often neglected. Shelves, label printers, packing tables, racks, pallets, etc. - everything must be available so that the collection, packaging and dispatch processes take place quickly and efficiently.
Hiring a fulfillment service provider will eliminate the need for personal order fulfillment. In addition, you will not have to interview, hire, train employees and try to keep them throughout the year. It is even more challenging in cases where your business is seasonal and you have to change the number of staff periodically.
Remember to consider utilities. The costs of water, sewerage, electricity, etc., associated with the management of the warehouse are inevitable. Even if your rental agreement is flexible and lower in certain months, you will still pay for utilities.
Just like utilities, the moment you rent storage space, you will have to take out insurance to pay for every month or every year. Examples of highly recommended insurances are insurance against theft, fire, flood, roof collapse, damage during operation, insufficient maintenance of the facility, etc.
Your business must go through the stage of preparation and packaging of products, which includes providing resources for this. Keep in mind that you will need boxes, packaging, labels and a few additional materials to make sure that the orders reach your customers in the same condition in which they left the warehouse.
Inventory management software
Over time, you receive more and more orders, which is great, but how will you control your inventory?
When you are just starting your business, you may initially be able to manually handle the execution of orders that are generated through your website. However, as orders increase, you will need to invest in product management software that integrates directly into the online store. Most reputable companies offering fulfillment services use software to ensure the accuracy of orders. In addition, you also have access to their system so that you can review analyzes, forecast inventory, and build a workable revenue growth strategy.
When it comes to shipping costs, this is one of the items you can save the most on. The company that provides fulfillment services will not only guide you in the best practices for reducing delivery costs, but you will get access to extremely low delivery prices due to their total volume of deliveries per day.
In addition, professional filling suppliers deal with all customs forms, bills of lading, supply contracts and other restrictions. This reduces the number of risks to which your business is exposed.
Hiring a company to entrust the execution of orders will not only save you money, but also valuable time. While an outside company takes care of process management, you can safely dedicate yourself to building a strategy for your business development and thinking about ways to sell more.
After all the above, you can hardly doubt how profitable an investment in a film center is . We are convinced that Bigarena Fulfillment is the right solution for you if you are looking for quality order fulfillment, fast and professional customer service and a way to save on costs. Contact us now to get more details and an individual offer.