It’s easy to get swept up in the sales side of e-commerce. After all, few experiences are more gratifying than seeing that conversion rate climb.
But it’s what happens next after the sale that really matters to the customer. According to Medium’soverview of various consumer studies, e-commerce customers primarily care about two things: speed and sustainability. Your logistics and fulfillment choices are therefore crucial. It determines how quickly the customer receives their order and how sustainably the package reaches their doorsteps.
Moreover, the logistics fulfillment method you choose can determine how much of your energy you spend on your core business – and how much you spend on pushing orders out the door.
You have two main choices: in-house fulfillment and outsourced fulfillment. (Although, within the latter category, choices abound). Below, let’s take stock of your two options.
First, let’s discuss in-house fulfillment, a popular choice among e-commerce merchants just starting out on their entrepreneurial journey.
What Is It?
As the term suggests, in-house fulfillment is when an e-commerce business manages the order fulfillment process itself. The merchant takes care of everything, from pick-and-pack and inventory management to shipping the orders.
Pros and Cons
In-house fulfillment is popular among new or small-scale operations because it’s a relatively less expensive way to deal with low order volumes.
However, in-house fulfillment can be limiting, inconsistent, time-consuming and – worst – inconvenient for customers. It’s tricky to scale your business when you fulfill every order, and packages often arrive to customers on an unpredictable schedule, which isn’t great when you’re trying to build a brand. Additionally, self-fulfillment often wrongfully presumes that your greatest resource as a merchant is time: that you can save a few dollars by investing hours of your time. However, your time is often better spent focusing on your core business.
Now, let’s discuss outsourced fulfillment. Unlike in-house fulfillment, this isn’t a homogenous category; there are several third-party logistics (3PL) partners to choose from. In this section, let’s discuss what outsourced fulfillment entails and how to choose the right logistics partner.
What Is It?
When you outsource to a logistics partner, they can handle every aspect of the fulfillment: inventory management, picking the inventory, packing it for shipment, and the shipment itself, including last-mile delivery.
Pros and Cons
The advantages of quality outsourced fulfillment are numerous. A good fulfillment and logistics partner allows you to enter new markets with ease, deliver your products to customers in a shorter timeframe (sometimes much shorter), promote sustainable practices, and free up time to focus on your primary business operations.
Note that it says a “quality” fulfillment partner. The potential con of outsourcing is that you can partner with a company that is inconsistent, limited in scope, and unsustainable.
Choosing the right Logistics Company
Not all logistics companies are created equally. Find a logistics company that offers the full package (pick-and-pack, inventory management, last-mile delivery, etc.). Better still, look for a company with a vast decentralized network of micro-warehouses, that way, “last-mile” looks more like “last-block.” This way, you can ensure speedy delivery of your products using sustainable zero-emissions vehicles instead of high-emission freight trucks.
To recap, while in-house fulfillment may work for fledgling e-commerce stores, eventually, you should consider switching to outsourcing to scale your business. As you do, be sure to choose a partner with a wide network that can deliver your products quickly and efficiently.