Why Outsource?

One of the biggest challenges an internet retailer faces is understanding their own costs when managing order fulfillment in-house. Those costs go far beyond labor expenses and facility leasing or purchase, and involve such major elements as insurance, order management and warehouse management technology, equipment, training, government regulations and compliance, data security, and business expertise. Consider these points for cost analysis:

•  The e-commerce environment is competitive and fast changing, and acquiring the best technology will cost hundreds of thousands of dollars and could be near a million dollars depending on the company’s needs. Order management and warehouse management systems can be proprietary or purchased from a qualified vendor, but either way they represent a massive investment that could be passed on to a fulfillment partner who has already established modern systems.
•  Human resources are not simply the wages of the employees, but involve other costs such as benefits, which many companies fail to consider. The cost of hiring a staff of administrators, production operators and warehouse labor is measured in both time and dollars, and is ongoing. The daily management of human resources for training, scheduling, disciplining, and eventually replacing is costly.
•  The facility itself presents its own costs once acquired. Equipment such as forklifts, racking, and conveyer systems are tremendous costs that your fulfillment partner can absorb into their established operations and save their clients money when outsourcing. The insurance alone on maintaining a proper facility is a cost that is underestimated, not to mention the security system that the facility will require.
•  In this age of cyber theft and the need for strong security, your outsourced fulfillment partner can offer the expertise and daily safeguard its clients need. The cost for remaining compliant with modern data security standards is significant and the IT staffing, training, and daily compliance for remaining secure can be managed more efficiently with a fulfillment company with multiple clients.
•  In addition, the expertise of a fulfillment partner can benefit their clients by taking the collective experience and applying it to all their clients. At the right moment these experiences can save time and money for an internet retailer and provide a bigger background for finding efficiencies and cost savings. By plugging in your business with an experienced fulfillment provider the necessary costs can be managed on their end, allowing you to see the savings.