If you operate a growing ecommerce store that sells physical items, than you most likely have considered hiring a third party fulfillment center.  Sometimes referred to as 3rd Party Logistics Providers (3PL), the core services offered by these types of companies are inventory management and pick-pack-ship services.  But in many cases 3PLs also provide additional services like shopping cart integration, outsourced customer service, returns management and EDI services.

For ecommerce startups, the decision to manage shipping internally initially can be a smart one.  Many 3PLs charge high base fees or minimums which cannot be justified when order volumes are low.  But once your business begins to find traction in the market and orders begin to stack up, shipping can become a complete time hog.   The threshold for when the right time is to outsource shipping varies from merchant to merchant.  It can be much more complicated for companies with a lot of unique items such as apparel while single product e-commerce merchants can manage things more easily.   Here are five reasons to consider migrating your shipping operation over to a 3PL:

1.        Free up your time to concentrate on what is important

You didn’t start an e-commerce store so that you can fill orders all day long.  Utilizing a 3PL will free your time to do what is most important: market your website and sell more products.  Marketing your product is infinitely more fun and will ultimately dictate how successful your website is.  Let the companies with that specific core competancy and strong order management systems

2.        Gain access to discounted shipping rates

As you may know, shipping companies like FedEx and UPS have published rates and discounted rates.  Anyone shipping with any kind of regularity can easily negotiate rates that are much lower than the published rates.  But fulfillment centers have the buying power of all of their combines shipments when they go to the negotiating table.  So if you can find a 3PL willing to share their discount with you then you can save bundles on shipping expenses.   You can decide for yourself to either pass on these discounted rates to your customers or use it as an additional revenue stream.

3.        Take advantage of shipping from ideal physical location

Many large 3PLs are based in the middle of the country.  Since shipping carriers base shipment times on regions, this can allow for quicker delivery to all parts of the country covering fewer regions.  For merchants that are constantly receiving deliveries of new merchandise from abroad, a fulfillment house close to a shipping harbor can reduce ground freight expenses.  Delegating shipping allows you to dictate where, when and how your products are shipped.

4.       Eliminate some of the demands of maintaining a shipping room workforce

If your shipping operation has already grown past the “garage” operation and you actually maintain some warehouse space and labor, then you understand the difficulties involved with fulfillment labor.  Outsourcing fulfillment allows you to eliminate the sky high workers compensation expenses involved with an injury susceptible operation.  Also, if you offer a seasonal product then using a 3PL passes the responsibility of managing a temporary workforce to accommodate your spikes.

5.        Labor intensive minutia can be left to the experts

Since fulfillment companies ship orders as a core service, they have perfected the process of handling complicated shipping operations.  There are a number of aspects of fulfillment that can get out of hand very quickly if the correct systems are not in place.  Back order management, returns handling, receiving, price shopping and in house customer service are all parts of your shipping operation that take time and resources to create procedures for and implement.  Tapping into the expertise of an established 3PL can be one way to save a huge headache.