Getting an eCommerce business up and started is hard. Most entrepreneurs assume that once they’ve developed a solid customer base and started generating revenues, it should be smooth sailing from there. Unfortunately, that’s not usually the case.
Most eCommerce businesses start out small. It’s not uncommon for business owners to work alone or with just one family member as an employee, and to do all that work from home. Once the brand starts gaining in popularity, storing inventory in the garage and heading to the post office to mail packages by hand is no longer an option. Read on to find out how working with a third-party logistics (3PL) company makes it easier to grow an eCommerce startup into a full-scale business venture.
Accommodate Unexpected Growth
In an ideal world, every eCommerce Business startup would have a plan in place to accommodate growth. In the real world, many business owners find themselves caught off-guard by unexpected growth. Working with a 3PL company like Your Logistics eliminates the possibility that changing customer demands will lead to inventory shortages and harm the new online store’s reputation.
Business owners can start off small and pay for only what they need but scale up easily from there should the opportunity arise. A good 3PL provider will offer a wide range of services, from direct fulfillment to warehousing, and help with inventory management.
Still keeping inventory in the garage? That’s not a sustainable solution. Unfortunately, renting warehouse space in a conventional storage facility isn’t a cost-effective option for most eCommerce startups. Furthermore, renting warehouse space close-to-home creates a new set of challenges when it comes to ensuring the timely delivery of products. Working with a 3PL company with dedicated warehousing and distribution channels lets business owners cut back on costs while simultaneously reducing shipping times.
Most competitive 3PL providers do more than just offer clients space in their warehouses and help with delivering packages. The use of advanced inventory management software also helps business owners avoid additional costs associated with excess inventory or sudden, often seasonal, increases in demand.
Today’s shoppers expect on-time, affordable delivery. To accommodate that expectation, business owners must minimize transportation costs and store inventory where it’s needed most. Since 3PL providers have multiple storage facilities and established shipping networks, business owners will find that it’s much easier and more cost-effective to trust these experts to ensure on-time delivery than it is to ship from a central location or build their own networks from scratch. Plus, efficient order picking can reduce order filling times.
Help with Product Kitting
Product kitting involves bundling multiple individual items to create a “kit” then assigning it a different SKU. Kitting allows business owners to ship more products using fewer packages, keeping shipping costs down. With proper marketing and promotions, it can also increase the average order value (AOV) for online orders and allow business owners to create different bundles for each season, event, or even customer group. Kitting, and especially subscription kits, can also increase customer retention rates.
The only real downside of product kitting is that it takes extra work to bundle products and create new SKUs and shipping labels. Working with a 3PL company that provides this service helps to keep costs low and eliminates the risk of error that occurs when already busy business owners try to take on this additional task themselves.
As small eCommerce businesses scale up, keeping track of orders can become a challenge. Most business owners don’t have it in their budgets to implement fulfillment automation services on their own, but 3PL providers already have systems in place for ensuring order accuracy. Working with an established logistics company lets small business owners leverage the power of automation without the kind of upfront investment required to implement it on a personal scale.
Improved Customer Service
If there’s one thing that brick-and-mortar and eCommerce stores have in common, it’s that both business models rely on generating positive consumer engagement and customer retention rates. Attracting new customers and keeping the store’s existing base of brand loyalists happy requires a focus on customer service.
While 3PL providers don’t handle customer service, they do free up time for business owners and employees. Business owners who trust 3PL partners with fulfillment and delivery can focus on interacting with customers and ensuring that they have uniformly positive online shopping experiences.
Tracking and Reporting
Online customers expect to get their products delivered on time and in pristine condition. Business owners who entrust order fulfillment to 3PL companies will get real-time information about shipment status, which they can use to keep customers informed. If there are unforeseen delays, the business owner will know about them immediately. That said, problems with fulfillment and delivery are rare when business owners work with established industry leaders.
Advanced Inventory Management
Business owners who work with 3PL providers can stay informed about inventory levels and receive automatic notifications when they get low, eliminating potential unpleasant surprises. Most providers use software that integrates well with major eCommerce portals and platforms, including Amazon, eBay, and other partners, so there’s no need to worry about purchasing or downloading additional software to receive updates or ensure compatibility.
Expand the Market
For eCommerce startups, the ability to manage order fulfillment and delivery efficiently is the key to expanding to wider markets. Working with a 3PL provider frees up time to focus on market research and advertising and ensures that newly converted customers will receive a high level of service that keeps them coming back. It can make the difference between continuing to scrape by in a niche market and expanding to provide goods to an unlimited number of new customers.
It’s Never Too Early to Make the Switch
Just getting an online store off the ground and not sure if it’s worth investing in establishing a partnership with a 3PL company? It’s never too early to make the switch. Establishing a working relationship with a reputable service provider while the company is still getting off the ground ensures scalability and eliminates a ton of headaches later down the line, so get in touch with an expert as soon as possible.