Five Benefits of Outsourcing Fulfillment

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Five Benefits of Outsourcing Fulfillment

by ICC on January 15, 2020
January 15, 2020 / by / in

Order fulfillment is a crucial part of the business model of many companies today. Getting the job done right at this stage goes a long way in assuring satisfied customers and subsequent repeat and expanded business. As a result of its importance, many companies go on to make the decision to outsource the fulfillment stage of the sales process. What are some of the benefits that drive this rapidly growing pattern? Here are five of the primary benefits to choosing this particular fulfillment avenue today.

Reduced Shipping Costs

As noted recently by Forbes, shipping costs are on the rise, and this is causing companies to seek new ways to bridge that additional cost gap and get closer to the customer in the end. By utilizing outsourced fulfillment systems, companies can then take advantage of a pool of fulfillment locations across massive areas, getting more customers closer to their product. Closer product means reduced shipping costs.

Reduced Operating Costs

Operating costs are a huge part of every business that every management team yearns to cut down on without adverse effect. On the fulfillment side of things specifically, the most recent IBISWorld’s Public Storage & Warehousing Market Research Report highlighted one, lingering cause for such continual expenses in many companies today as warehousing and storage costs, estimated to feed a $22B industry in the bigger picture. By utilizing outsourced fulfillment methods, the selling company ultimately only pays for the space they used, product for product, instead of taking on the costs of entire warehouses. Companies like Red Stag Fulfillment have thus sprung up in many places and taken on the job of handling those fulfillment logistics to save the seller big and keep storage costs at a minimum.

Improved Customer Service

It comes as a surprise to some, but outsourcing fulfillment, in many cases, actually tends to drive improved customer service experiences. Because of the streamlined, 24/7 service many fulfillment providers offer, many customers end up encountering a more convenient and direct service experience than perhaps what the original seller could have handled. This then leads to extra freedoms for that seller such as are covered by the next point on this list.

Increased Freedom to Focus on Sales

Increased freedom to devote to other interests is a dream of just about every manager out there. When fulfillment has entirely been assigned to an outside entity, the seller can then focus on other things. A renewed focus on sales or even marketing strategy, for example, can then result, driving even more success at the end of the day.

Increased Market Accessibility

Finally, expanded markets are yet another very noteworthy benefit to outsourced fulfillment operations. Outsourcing spreads product accessibility to areas never exposed to it before. The result of this then is a business experiencing a much larger customer pool and potential profits than ever before.

Outsourcing truly does have great benefits when applied to certain business functions. The fulfillment function of businesses today, as one example, can see incredible improvement when the choice is made to outsource. These five, above-mentioned benefits are just some of those that come with this great, strategic move today.