Outsourcing fulfillment services: Guide

Managing fulfillment in-house is a common approach for many companies. However, there comes a point when outsourcing fulfillment to a 3PL provider is a wise business decision. In fact, outsourcing can help many businesses scale efficiently, control costs and provide a better customer experience.

This guide delineates the whys, whens and hows of outsourcing fulfillment services, providing helpful information to make informed decisions about their logistics strategy. Whether you're considering outsourcing for the first time or switching providers, the information presented here will encourage clarity and help you make decisions more confidently.

The high cost of in-house fulfillment

Many businesses start with in-house fulfillment, assuming it's the most cost-effective option. However, as order volume grows, the hidden costs, inefficiencies and time demands start to add up. Outsourcing can become an increasingly attractive alternative as your internal fulfillment processes become more complex and costly over time.

Myth vs. reality: Understanding fulfillment outsourcing

There are legitimate concerns about fulfillment outsourcing, many of which center on hidden costs, contract obligations, losing control over the fulfillment process and unexpected disruptions that lead to a loss of customer trust. However, if they occur, many of these challenges can be linked directly to working with the wrong 3PL provider.

Common misconceptions about outsourcing can also dissuade businesses from considering the many benefits outsourced fulfillment can provide. Let’s separate myth from reality to provide a clearer picture.

When should a business consider outsourcing fulfillment?

Generally, outsourcing fulfillment makes sense when a business can no longer properly handle its order volume. Businesses that experience fast growth will need access to additional resources, such as manpower, infrastructure and technology, to stay cost-effective and efficient. Without access to these resources, in addition to the time required to manage and oversee multiple fulfillment processes, transitioning to a 3PL provider can be the right choice.

However, deciding requires carefully evaluating costs, resources and potential drivers. Questions that can help you decide whether or not it's time to outsource fulfillment include:

• Are your fulfillment costs rising and cutting into your profit margins?
• Are you providing competitive fulfillment services? Or are shipping speeds inconsistent, leading to customer complaints?
• Can your business keep up with increased order volume and demand?
• Is scaling into new sales channels (D2C, B2B, multiple marketplaces) challenging?
• Are your fulfillment processes slowing down business growth rather than enabling it?

When should a company change 3PL providers?

If your business is already outsourcing fulfillment services, you may need to change if your current provider falls short of expectations. Many businesses find themselves in this situation for several reasons. For example, your 3PL may be unable to scale along with increasing demand. Further, they might not meet delivery demands on time and at competitive pricing. In worst cases, you might be experiencing issues involving mismanagement of inventory, lack of visibility or even costly and unexpected fees.

If these scenarios apply to you, it's important to take the time to consider other available options and look for a 3PL company that can become a trusted and strategic business partner rather than just a service provider. Further, you'll want to transition professionally to ensure you have the support you need as you move forward to better options.

How to find the right 3PL provider

Choosing the right 3PL provider will require an effective strategy and careful consideration of your prospective 3PL service offerings and the potential benefits they can provide. Further, choosing a fulfillment partner that can align well with your business needs is important.

Consider if your 3PL can provide the following support and services:

Make the transition

If you've concluded that outsourcing fulfillment services or switching providers is the right choice for your business, a fast and streamlined onboarding experience will be essential, especially during peak seasons. Once you understand your current fulfillment goals, you must work closely with your new 3PL to ensure a smooth transition and minimize disruptions.

For example, Cart.com has a proven track record of fast and successful onboarding experiences. We work closely with clients to set onboarding goals, milestones and metrics to track progress. Our dedicated onboarding team will ensure your current tech stack is fully integrated with our proprietary ConstellationⓇ OMS and WMS systems. We aim to ensure inventory accuracy, visibility, control and swift inventory setup.

Partner with Cart.com

Outsourcing fulfillment services can transform business operations, enabling brands to scale faster without disruptions, cut costs and improve efficiency. By dispelling some common myths, taking a closer look at the indicators that suggest it’s time to partner with a 3PL and knowing what to look for in the industry, a business can be confident that its long-term fulfillment strategy will be successful and support growth.

Want to know more about outsourcing fulfillment services with Cart.com? Contact us today to learn how we can help your business scale with a fully streamlined onboarding experience and tech-driven logistics solutions.