Pros & Cons of Outsourcing Logistics for E-commerce Stores
Outsourcing refers to distributing specific tasks to 3rd parties, that have specialized skilled force or abilities to perform that task efficiently & smoothly. In the modern world of economics, outsourcing is considered a substantial part of each successful business, from multinational companies to small start-ups.
E-commerce is the fastest-growing business of the last decade. Fast & reliable logistics management for order fulfillment is essential for each e-com business. Is outsourcing logistics for efficient & reliable order fulfillments a best practice? We will try to answer all such questions in this article by focusing on the pros & cons of outsourcing logistics for e-commerce stores.
Logistics management means keeping the flow & storage of inventory smooth & speedy by implementing a well-documented plan. When an eCommerce store goes for logistics outsourcing, it usually accepts the following services from a logistics management company.
- Receive stock on your company's behalf by following the standardized quality checks.
- Warehouse management from inventory storage to product pick, pack, and ship for quick & reliable order fulfillments.
- 3PL allows you to have a complete overview of your inventory management and order management.
- 3rd party provider will ensure to set precise order tracking & fulfillment system.
- Let you perform inventory management with your company WMS.
The Key Benefits of outsourcing logistics for eCommerce stores
Embed experts into your team
Your existing team may be good at handling few specific tasks of e-com business, but being an expert or all-rounder or two different things. 3PL companies are experts & specialized in stock storage, quality checks, and order fulfilments. 3PL companies optimize eCommerce fulfillment processes to make them smooth and 100% perfect.
Get time to improve
Outsourcing gets time for you to focus on the core components of your business. Instead of performing routine logistics management tasks or order fulfillments, you can work on new ideas to improve & grow your business potential.
Minimize business cost
Outsourcing logistics lets you cut your business expenses to grow your profit margin. You neither need to hire multiple logistics experts nor do you have to invest time & money in searching for a warehouse place, warehouse equipment, and software. Besides that, 3Pl companies have minimal shipping charges as these companies have much better contracts with carriers as they ship a large volume of orders. You can use these resources to scale up your business/e-store.
Provides quality customer experience
Any e-commerce company needs enormous resources, time, and expertise to develop an efficient logistics management system for a distinct area. Meanwhile, a well-established logistics provider lets you access its up-to-time logistic management system with a highly skilled workforce at a minimal cost to ensure quick & reliable order fulfillments. It ultimately earns positive customer reviews for your e-business.
Start an eCommerce store in no time.
It lets you start your e-business in no time as you don't need to spend a lot of time & money in developing a reliable logistic management system. You can outsource logistics to a reputable logistics provider to start your business immediately.
Globalize your business
An e-commerce store lets you reach a global audience, and outsourcing logistics enables you to deliver products globally with utmost ease. No needs to set up a logistics structure globally for your e-business for speedy & reliable order fulfillment. Before finalizing a 3PL make sure that it delivers in your targeted market, as some fulfillment centers deliver globally, while others deliver to specific countries.
Disadvantages of logistics outsourcing
Of course, outsourcing logistics get peace of mind by easing your logistics management & order fulfillment system. But nothing is perfect. There may be a cost your business has to bear for easing order fulfillments. We have enlisted some notable disadvantages of outsourcing logistics below,
Extreme hidden charges
Third-party logistics provider hidden charges can be an unbearable burden, especially for small or new e-shops. E-shops choose 3rd party logistics providers with the main goal of minimizing business expenses to increase profit margin. But logistics provider high hidden chargers ultimately lead your business to failure by diminishing the profit ratio.
Lost control of business steering
Outsourcing logistics is like handing over your business control to 3rd party logistics provider hands. You will not be able anymore to control the quality of customer service and order fulfillment time.
Privacy at risk
While outsourcing logistics, you have to share your customer's information vital for order fulfillments. At the moment, you shared your customer's data. Their privacy is at risk, as you can't monitor or control the way third-party logistics providers use that data.
Flexibility is considered the core gradient of any successful business recipe. Make sure your chosen 3PL is flexible in the services you need. All the 3PL companies do not provide services like barcode relabeling, varying languages support, product assembly, quality check, product repacking. And these are the essential services to scale up an eCommerce business.
Outsourcing logistics is equally beneficial for each e-store, from a small drop shipper to a wholesaler. All the above-listed cons of outsourcing logistics can be avoided, by choosing a well-reputed logistics provider. Spend max time to find the most reliable logistic provider to boost the potential of your e-business.