Third-party fulfillment is hailed as a godsend to many entrepreneurs. It saves you time, work, money…and did I say time? (Time is perhaps the biggest commodity to a busy entrepreneur.) So, if you are not using third-party fulfillment provider, your job will be substantially more difficult than it is for those who do use it. Now might be the perfect time to switch over to third-party fulfillment so that you can avoid the following pitfalls.

Time Suck

How much time do you invest in warehousing for your e-commerce business? Between operations and management, which are not critical elements of growing an e-commerce company, how much time that can be actively used for better purposes is wasted? These processes eat up so much of your day, and it can be challenging to stay on track when things become stressful in these situations.

With third-party fulfillment, you can spend more time on the things that actually matter most to your company, like marketing and customer acquisition, web development, procurement, and demand planning. All this is simply because of all the time you save by using third-party fulfillment. This will have substantial impact on your business and its growth in the long run. You will see your business expand more rapidly than ever with your efforts redesignated.

Staff Underutilization

This is similar to the first point. I am not saying that staffing people is bad, but there are inherent issues that come along with a larger workforce that would retract from an e-commerce business’s critical elements. Employees can be expensive. If you spend all your money on employing people in warehousing, you lose out on people who can take your company to the next level.

With third-party fulfillment, you do not have to worry about employing a staff to work in your warehouse and the many liabilities that go along with it. The fulfillment center does that for you. Instead, you can hire people to expand your company. You will be able to push the employees you do have to new heights, and you can be sure that they will take your company to the next level in the process.

Inefficient Processes

In addition to staff, warehousing, picking, and packing processes are not what online retailers specialize in, so they are most likely going to perform these processes less efficiently than a focused fulfillment provider would.

These processes may also hold the company back from offering more advanced features, such as live inventory counts on a website (i.e: “Only 4 products remaining!”), which often boost sales.

The process becomes more streamlined with fulfillment services. When organization is better, the process is easier on you and the consumer. When it is easy on you, you can focus on improving the company and of course on making the job easier on the consumer, which will keep them coming back.

Higher Shipping Rates

We talk with companies all the time who are located in LA who import their products to the port of LA from China. Therefore, they want a fulfillment center in LA. This is a terrible decision. Not only is LA some of the most expensive real estate in the country, but the majority of the population is on the East Coast.

The cost to ship a few thousand orders from an LA-based fulfillment center is going to exceed the one-time cost to freight ship the inventory to a centralized fulfillment center. That is why a fulfillment center that can stock items in various locations is a more viable option for many.

Slowed Service

Third-party fulfillment also tends to be quicker. Because everything is streamlined, products can be packed and shipped more quickly. This is especially true when there are fulfillment centers closer to the consumer. When the consumer orders a product and it shows up at their door quickly, they will be more likely to continue shopping with you. This process makes it a smoother transaction for all involved parties.