12 Clear Signs It’s Time to Outsource Your eCommerce Fulfillment

Introduction

As an eCommerce business owner, you’ve likely started with managing your own fulfillment in-house. This approach works well when you’re just getting started, allowing you to maintain control and keep costs low. However, as your business grows, there comes a point when outsourcing fulfillment to a third-party logistics (3PL) provider becomes not just beneficial, but necessary for continued success and scalability.

But how do you know when it’s the right time to make this transition? In this comprehensive guide, we’ll explore 12 clear signs that indicate it’s time to consider outsourcing your eCommerce fulfillment. We’ll also discuss how FreightAmigo’s Digital Logistics Platform can support you through this transition and help optimize your supply chain operations.

1. Your Delivery Standards Are Slipping

One of the most obvious signs that it’s time to outsource fulfillment is when your delivery standards start to slip. In today’s fast-paced eCommerce landscape, customers have high expectations for quick and accurate deliveries. In fact, 39% of customers won’t return to a store following a poor delivery experience.

If you’re noticing an increase in late shipments, incorrect orders, or customer complaints about delivery, it’s a clear indicator that your in-house fulfillment process is struggling to keep up with demand. This is where outsourcing to a professional 3PL can make a significant difference.

Third-party fulfillment providers have the expertise, infrastructure, and staff to handle increased order volumes efficiently. Whether you’re experiencing gradual growth or seasonal spikes, a reputable 3PL can ensure consistent, on-time deliveries, helping you maintain customer satisfaction and loyalty.

2. Your Cart Abandonment Rates Are High

High cart abandonment rates can be a major hurdle for eCommerce businesses, and logistics often plays a significant role in this issue. If you’re noticing that many potential customers are leaving items in their cart without completing the purchase, it might be due to unsatisfactory shipping options.

Outsourcing your fulfillment can help address this problem in several ways:

• Offering a variety of delivery speed and cost combinations to cater to different customer preferences
• Qualifying for fast shipping programs like Amazon Prime or Walmart Free 2-Day Shipping, which can attract customers who value quick delivery
• Generating shipping cost savings that can be used to offset the costs of free shipping, making your offers more attractive to price-sensitive customers

By partnering with a 3PL, you can leverage their expertise and resources to provide more competitive shipping options, potentially reducing your cart abandonment rates and boosting sales.

3. Your Merchant Ratings Are Low

In the world of eCommerce, feedback ratings are crucial for success. They play a significant role in converting customers, improving organic search result placement, and determining eligibility for marketplace advertisements. If your inability to meet shipping deadlines and standards is negatively affecting your ratings, it’s time to consider outsourcing your fulfillment.

A reputable 3PL partner can help you maintain high shipping standards consistently, which can lead to improved merchant ratings. This, in turn, can enhance your visibility on eCommerce platforms, attract more customers, and ultimately drive more sales.

4. Your Conversion Rate Is Low

While the average cart abandonment rate hovers around 70%, there are several strategies you can employ to improve your conversion rates. You’ve likely already tried tactics like lowering prices, offering free delivery options, and sending cart abandonment emails. However, have you considered the impact of logistics on your conversion rates?

Outsourcing your fulfillment can enable you to guarantee fast shipping times, which often qualifies you for fast shipping programs like Walmart Free 2-Day Shipping. These programs can significantly increase conversion rates by offering customers guaranteed fast shipping from a trusted brand.

Moreover, with a reliable 3PL partner, you can ensure that your delivery performance is consistently good enough to not only get on these programs but also stay on them, providing long-term benefits for your business.

5. Your Listings Aren’t Visible

In the competitive world of eCommerce, visibility is key. If your product listings are buried on the second page of search results, you’re likely missing out on a significant amount of potential sales. While optimizing your listings for improved search ranking is crucial, supplementing this with free and fast shipping badges can give you an extra edge.

By outsourcing your fulfillment to a capable 3PL partner, you can qualify for these badges, which can help your products stand out in search results. Eligible customers will automatically see estimated delivery dates (e.g., “Free next day delivery”) on social sales channels, at no extra cost to your business. This increased visibility can lead to more clicks, more sales, and ultimately, more revenue for your business.

6. Your Costs Are Too High

As an eCommerce business owner, profitability is always a top priority. As your business grows, so do your operational costs – from marketplace fees and marketing expenses to warehousing, staffing, shipping, and packaging costs. If you find that these rising costs are eating into your profits, it might be time to consider outsourcing your fulfillment.

Contrary to what you might expect, outsourcing fulfillment can actually help reduce your overall costs. Here’s how:

• Shipping Cost Reduction: 3PLs have the expertise and geographical locations to optimize delivery routes, often resulting in lower shipping costs.
• Warehousing Savings: You can save on the costs of maintaining your own warehouse space.
• Staff Efficiency: Reduce the need for in-house fulfillment staff, allowing you to allocate human resources more efficiently.
• Bulk Purchasing Power: 3PLs often get discounts on packaging materials due to their high volume purchases, which can be passed on to you.

These cost savings can be reinvested into other areas of your business, such as marketing, product development, or even offering free shipping to your customers.

7. You Want To Expand

If you’re ready to take your eCommerce business to the next level, outsourcing fulfillment can be a key enabler of growth. Managing multiple sales channels, increased order numbers, and more complex marketing activities can quickly become overwhelming when you’re also handling fulfillment in-house.

By partnering with a 3PL, you can offload the time-consuming tasks of order processing, picking, packing, and shipping. This frees up your time and mental energy to focus on strategic activities that drive business growth, such as:

• Expanding into new markets or sales channels
• Developing new products
• Enhancing your marketing efforts
• Improving customer service

Moreover, a good 3PL partner will have the scalable infrastructure and technology to support your growth, eliminating concerns about whether your fulfillment capabilities can keep pace with your expansion plans.

8. You’re Already Expanding

If your business is already in a growth phase, you might be feeling the strain on your in-house fulfillment operations. Growth brings several challenges that outsourced fulfillment can help address:

• Time Management: As orders increase, you may find yourself spending more time on fulfillment and less on strategic business activities. A 3PL can take over fulfillment, allowing you to refocus on growth initiatives.
• Capacity: In-house fulfillment operations often struggle to handle sudden increases in order volume, leading to missed deadlines and quality issues. A 3PL can easily scale to meet demand fluctuations.
• Warehouse Space: More orders mean more inventory, which requires more storage space. Instead of investing in larger warehouse facilities, you can leverage your 3PL’s existing infrastructure.
• Staffing: Growth often necessitates hiring additional staff. By outsourcing fulfillment, you can access the resources you need without the complexities of managing a larger workforce.

By addressing these challenges, outsourced fulfillment can help ensure that your growth is sustainable and doesn’t come at the expense of customer satisfaction or operational efficiency.

9. Your Expertise Is Lacking

You started your eCommerce business because you saw a market opportunity and had a great product to offer – not because you’re an expert in logistics and fulfillment. As your business grows, the complexities of efficient warehousing, inventory management, and shipping can become overwhelming.

This is where the expertise of a 3PL becomes invaluable. Professional fulfillment providers specialize in:

• Optimizing warehouse layouts for efficient picking and packing
• Implementing advanced inventory management systems
• Negotiating favorable rates with shipping carriers
• Staying up-to-date with the latest fulfillment technologies and best practices

By leveraging this expertise, you can ensure that your fulfillment operations are as efficient and cost-effective as possible, without having to become a logistics expert yourself.

10. You’re Struggling To Offer Fast and Free Shipping

In today’s eCommerce landscape, fast and free shipping has become an expectation rather than a perk. In fact, over 60% of shoppers expect their online orders to ship for free and arrive within three business days. If you’re finding it challenging to meet these expectations, outsourcing your fulfillment could be the solution.

A capable 3PL can help you offer competitive shipping options by:

• Leveraging their network of strategically located warehouses to reduce shipping distances and times
• Utilizing efficient picking and packing processes to speed up order processing
• Negotiating better rates with carriers due to their high shipping volumes
• Offering options for order consolidation and optimized routing to reduce costs

These efficiencies can help you offer faster shipping times and potentially absorb the cost of free shipping, making your offerings more attractive to customers.

11. You Want Your Fulfillment All in One Place

As your eCommerce business grows, you might find yourself using a mix of fulfillment methods – some in-house, some through Amazon FBA, and perhaps some through other 3PLs. While this approach can work, it often leads to inefficiencies and inconsistencies in your fulfillment process.

Centralizing your fulfillment with a single, capable 3PL provider can offer several benefits:

• Simplified inventory management across all sales channels
• Consistent packaging and branding for all orders
• Unified reporting and analytics for better decision-making
• Streamlined customer service, with a single point of contact for all fulfillment inquiries
• Potential for volume-based discounts on shipping and storage

By consolidating your fulfillment operations, you can achieve greater efficiency, consistency, and cost-effectiveness across all your sales channels.

12. It’s Taking Up Too Much of Your Day

Perhaps the most telling sign that it’s time to outsource fulfillment is when you find yourself spending more time packing boxes and printing shipping labels than working on growing your business. As an entrepreneur, your time is your most valuable asset, and it should be invested in activities that drive your business forward.

If fulfillment tasks are consuming a significant portion of your day, consider the opportunity cost. By outsourcing these tasks to a 3PL, you can free up time to focus on:

• Product development and sourcing
• Marketing and customer acquisition
• Strategic planning and business development
• Improving customer service and building brand loyalty

Remember, the goal of starting your own business wasn’t to become a full-time warehouse manager. Outsourcing fulfillment can help you reclaim your time and refocus on the aspects of your business that truly need your expertise and attention.

Conclusion: Making the Move to Outsourced Fulfillment

Transitioning from in-house to outsourced fulfillment is a significant step for any eCommerce business. It requires careful consideration and planning, but for many growing businesses, it’s a necessary evolution that can lead to improved efficiency, reduced costs, and enhanced customer satisfaction.

If you’ve recognized several of these signs in your own business, it might be time to explore your options for outsourced fulfillment. Remember, the goal is to find a 3PL partner that not only can handle your current needs but can also scale with you as your business continues to grow.

At FreightAmigo, we understand the complexities of eCommerce fulfillment and the challenges that come with scaling a business. Our Digital Logistics Platform is designed to support businesses at every stage of their growth journey, offering flexible solutions that can be tailored to your specific needs. From our advanced tracking capabilities to our network of trusted logistics providers, we’re here to help you streamline your fulfillment process and focus on what you do best – growing your business.

As you consider your options for outsourced fulfillment, we invite you to explore how FreightAmigo can support your transition and help optimize your supply chain operations. With our expertise and Digital Logistics Solution, we can help you navigate the complexities of fulfillment and logistics, ensuring that your business is well-positioned for sustainable growth in the competitive world of eCommerce.