Small Business, Should You Outsource E-Fulfillment?
While many professionals complain of overwhelm, it seems entrepreneurs and small business owners have it worse than anyone else.
Surveys conducted among small business owners found between 70% and 86% of small business owners feel ‘swamped’ simply running their companies.
Over half of those surveyed reported spending more time working in the business than on the business.
Attempting to maintain this exhausting pace leads to either staff burnout, the business stretching itself so thin that it collapses, or both.
This trait is common among small business owners and entrepreneurs who attempt to run every aspect of the business themselves. While this can work in the infancy of the business, they’ll have to outsource tasks to make significant growth.
Freeing up resources allows you to focus on the core business, which is increasing the sales of their products.
Not sure what to outsource? For a minimal fee, many professionals can handle your:
Information Technology – A survey by Deloitte found that over 5o% of companies outsource a portion of their IT and another 25% plan to do so. They also found that companies that did so recorded a cost savings of up to 40%.
Accounting – Handling payroll, sorting out taxes and paying bills are tasks that small business owners dread. Allowing an expert to administer your payroll will decrease cost and increase tax compliance, but 60% of small businesses still try to handle it in-house. According to the IRS, this leads to late, and often, incorrect payments, which costs 40% of small businesses up to $845 in penalties.
Logistics – As the business out-grows its ‘small’ beginnings, a larger space is required to store and process SKUs. With more moving parts than one person (or a small team) can efficiently handle, outsourcing your logistics becomes a smart option.
This is especially true for eCommerce businesses where initial profits can turn to losses if the business becomes overwhelmed with orders.
With that said, should you still outsource fulfillment?
Look at it this way, an order fulfillment company is an expert with resources that your small business doesn’t have, such as a warehouse, favorable shipping rates and an experienced team. Seems like a no-brainer.
Not convinced, here are a few more reasons to consider outsourcing your order fulfillment:
Cost Effective – If you sell a seasonal product, you don’t need to rent a warehouse all year round. By using an order fulfillment company, you only pay for what you use, saving you money on unused warehouse space. These companies handle all the ‘heavy lifting’ involved such as inventory storage, repackaging & kitting, transport and delivery of goods. As a small business, it’s not possible to consistently get favorable prices and TOS for all sections of the fulfillment process.
Leverage Technology – Outsourcing allows you to take advantage of an existing infrastructure for smooth delivery of your products. These companies have invested heavily in software development, tracking infrastructure, staff training etc. Attempting to create something similar is a time- and resource-intensive undertaking. By paying to use their software, you can focus on your business and be sure that all orders are being shipped and delivered.
Scalability – Rapid business success can cause the collapse of an ill-prepared small business. If an eCommerce business receives an order that is 10 times the volume it can handle, it can overwhelm the existing system. This can lead to inefficient fulfillment, which leads to poor reviews and a tarnished reputation. Using an order fulfillment company allows the business scale up or down without any loss in service quality to the customer.
Core Business Focus – By now, you can tell that order fulfillment is a complex process with sections that must be gotten just right. Any business that tries to focus on the fulfillment part of their business will lose sight of the core business. Only by concentrating on increasing sales and innovation (not fulfillment), can a small business grow.
By doing all the heavy lifting, an order fulfillment company helps you levels your businesses retail and eCommerce playing field.
Outsourcing order fulfillment allows smaller businesses compete with the ‘big boys’ in the industry.
- Are you ready to step your game up and play in the big leagues with the ‘big boys’?
- Are you ready to stop losing money because you juggle too many roles?
- Are you ready to sit back and actually enjoy growing your business?
Let us help you avoid burnout and build the business you love, Contact Floship today to take advantage of our global e-fulfillment solutions.