by Bogdan Stancu
Logistics Sales Engineer
Initially, the decision to outsource e-fulfilment services may be met with a polite “no, thank you.” But how about a little imaginative play?
Suppose you’ve decided to investigate the possibility of outsourcing your e-fulfilment services, so conduct some research, identify market players, and contact them. Of course, the first step is to send some information to the potential supplier in order to receive the most relevant offer possible. And, because you want to know how such a service would work and what the costs would be during peak periods with the highest order volumes, you want to send the provider the corresponding data for your best months.
Then, a professional 3PL * presents you with a budgeting scheme based on the information you provided and tells you how much you will pay per month to use his services. And your polite refusal will almost certainly follow after this scene.
However, if you can overcome your initial impulse to reject the provider’s offer and conduct a thorough analysis, you may come to some conclusions that will change your mind about outsourcing e-fulfilment services.
The first conclusion is that you will have a lot more free time at the end of the month. You will benefit from this advantage as a result of the concluded partnership, i.e. the signed contract, which also includes performance indicators in order preparation, data that the service provider will assume from the formulation of the offer. And, if you have more time, you will automatically earn more money because you will work less for the same profit.
So it is up to you how you spend your remaining time, whether it is on vacation with family and friends or, why not, looking for ways to scale your business.
Another significant advantage that you will appreciate is that you will shift your company’s expenses from a fixed area to a variable area, which means that you will only pay for what you use. Furthermore, if you add a marketing campaign to this mix, you will be able to increase your sales by 20-50% and, because your business is outsourced, you will not have to worry about employees, training, or order delivery.
The same is true if you have decided to expand your product portfolio, sales channels, or simply because your business has grown and you require more storage and preparation space.
In these cases, we refer back to the performance indicators specified in the contract with your e-fulfilment service provider. As long as your service provider keeps your business up to date and all orders are prepared correctly and on time, you will be able to track the evolution of the numbers from wherever you are, while also implementing the strategy and expanding your business.
If we are talking about development and scale, the third conclusion is that your company’s cash flow will improve. Why?
- You pay a variable rate based on how much you consume;
- Your service provider has given you a payment period that you can extend if necessary;
- You are not constrained by the need to pay rent, utilities, or employees.
Now that we’ve reached the end, we’ll leave it up to you to make the decision, and we’ll ask you again why you want to externalize.
*3PL – Represents a company that offers logistics services to other businesses that require them (third parties). Transport, handling, and storage of shipments, warehouse management and distribution, as well as a variety of other services related to transport monitoring, warehouse management, customer transactions, and so on.