Starting up an eCommerce business can have a low barrier to entry with plenty of opportunities to scale. However, as soon as your eCommerce startup begins flourishing, it can become challenging to keep up, especially when fulfilling orders in-house.
In this guide, we’re helping eCommerce startups by looking at when you should consider outsourcing fulfillment and how to go about finding the best fulfillment company for your startup.
The benefits of outsourced fulfillment for eCommerce startups
Many eCommerce startups adopt a “do-it-yourself” strategy at the beginning of their journey. Often, business owners end up sourcing, marketing, fulfilling, accounting, and handling customer queries all by themselves.
This is a great way to start an eCommerce business, allowing you to grow with little capital and giving you first-hand insight into every aspect of your online store.
However, some business activities are ripe for outsourcing at the beginning of your eCommerce journey. Fulfillment is one of these critical business operations that we recommend outsourcing to get reliable, fast delivery for your customers.
Not only will you delight your buyers with a sophisticated fulfillment machine, with tried-and-tested processes, but you’ll also benefit from their resources, competitive pricing, scalability, and more.
Knowing how to ship orders quickly and cost-effectively requires specific expertise, which the best fulfillment companies have in abundance.
Outsourced fulfillment companies have the resources to store stock safely and ship orders quickly, even during peak retail periods, when you might struggle in-house.
Fulfillment providers adapt to your needs as you grow or dial back. This allows you to quickly scale your online store without worrying about how to handle increased order volumes.
Outsourcing the time-intensive task of fulfilling orders gives you more time to concentrate on other growth areas of your business, such as marketing.
The best outsourced fulfillment companies help increase sales by meeting fast shipping program requirements and giving you access to fast shipping tags across your social media and Google Shopping ads.
How to test outsourced fulfillment in your eCommerce startup
The best way to determine your eCommerce business’ readiness to switch from in-house to outsourced fulfillment is by testing the waters with an outsourced fulfillment company.
For example, you can use a third-party fulfillment service for:
- A sales channel you want to expand to (ex. Shopify)
- A selection of products that are in high demand
- Certain geographical areas
- 2-day and next-day orders
Once you’ve determined the success of outsourced fulfillment, you can begin outsourcing fulfillment for other products, sales channels, or locations.
What eCommerce startups should look for in a fulfillment company
Fulfillment is the lifeblood of your eCommerce business. Without it, your customers don’t receive their orders and you’ll bleed revenue and get poor reviews. So, it’s crucial to research the best fulfillment company for your business and choose a provider that best meets your needs.
The top things to look for in a fulfillment company are:
The best fulfillment company is one that suits your business ethos and future goals. For example, do they have the resources to scale your fulfillment service alongside your forecast growth? Do they integrate with your current and future sales channels? Do they offer the shipping speeds you want to provide customers?
2. Fast shipping speeds
Speaking of shipping speeds, consumer expectations are forever increasing. To become a competitive startup and attract consumer attention, you must offer 2-day shipping across the US, and next-day shipping available where possible.
3. Warehouse locations
The more warehouse locations a fulfillment company has, the quicker and cheaper they can ship products. Look for a dispersed warehouse network, with options to provide nearby customers next-day delivery services.
4. Fulfillment technology
eCommerce is a tech-led industry, so your fulfillment service must be tech-led too. The key technologies to look out for include:
- Strategic distribution: distributing your inventory according to historical and projected demand.
- Real-time shipping estimates: providing customers with real-time delivery speed options based on their location and the location of your inventory.
- Sales channel integrations: integration with your eCommerce platform and online marketplaces to immediately download orders and sync stock levels.
- Inventory management: real-time inventory management software that provides you with an accurate picture of stock levels and locations.
5. All-inclusive pricing
The best fulfillment company for your business should save you money in the long-term. However, many eCommerce startups suffer from outdated 3PL models and hidden fees. Look for a fulfillment provider with an open and transparent pricing model that is competitive, all-inclusive, and reflective of your actual usage rather than your potential usage.
Further reading: Understanding your fulfillment costs for FBA, a 3PL, and Deliverr
6. Marketing tools
Fast delivery speeds of 2-day and next-day are a huge selling point and integral to marketing your eCommerce store and products. Find a fulfillment service that comes with marketing tools, such as:
- Eligibility for fast shipping programs, including Shopify 2-day, Wish 2-day, Walmart 2-day, eBay Fast ‘N Free, and more.
- Fast shipping tags for your eCommerce store and Google Shopping ads.
- Countdown timers showing customers how long they have left to receive their product by a certain date.
3 Fulfillment options that give startups a leg up
Three fulfillment options that are particularly well suited to giving your eCommerce startup a leg up include Amazon’s internal fulfillment for Amazon orders, Deliverr for multi-channel sellers, and USPS for a more hands-on approach.
Amazon FBA provides outsourced fulfillment services to Amazon sellers. You deliver stock to a network of FBA fulfillment centers, and FBA handles storage, picking, packing, shipping, and returns for you.
The benefits of using Amazon FBA as a startup are low-cost pricing for fast-moving stock, fast shipping speeds, and automatic Prime qualification. The considerations are high-cost multi-channel and slow-moving stock fees, Amazon-branded packaging, and questionable resilience (FBA halted many deliveries during the pandemic).
Deliverr is an outsourced fulfillment company providing fulfillment to multi-channel sellers. You deliver inventory according to its intelligent inventory distribution technology, and Deliverr handles storage, picking, packing, and shipping for you.
The benefits of using Deliverr as a startup are fast shipping speeds across your sales channels, intelligent next-day deliveries based on inventory location, all-inclusive pricing, and the ability to start small. However, note that you can’t use branded packaging with Deliverr, as this impedes delivery speeds.
If you’re not yet ready to outsource your fulfillment entirely, USPS offers small businesses access to discounted shipping rates through volume discounts and economy postage options.
The benefits of using USPS as a startup are flexible shipping options, online postage, and free pick-up. The consideration of using USPS is that you manage the fulfillment process up to shipment, which can be time-consuming and challenging if you have an early USPS pick-up time.
Read more: How to calculate your shipping costs
Building an eCommerce startup is an exciting journey, and you can enhance that journey by knowing the best time and companies to which you should outsource parts of your business.
Outsourcing your eCommerce fulfillment might feel like a big step, but when you know how to find the best fulfillment company for your eCommerce startup, the step is easier than you think and can substantially accelerate business growth.