In an era dominated by e-commerce, fulfillment centers serve a vital role in the distribution chain by helping businesses streamline operations and achieve growth. Fulfillment centers, also called third-party logistics companies or warehouses, serve as centralized locations that coordinate all shipping, distribution, and storage activities. These fulfillment centers can be a vital asset for companies of all sizes, but they are especially important for companies that want to – or are – experiencing high growth.
Fulfillment centers can make running an e-tail shop much easier. These companies can handle all of the order processing, including receiving the order, preparing it for shipping, and getting it delivered to the final customer. This process includes picking and packing, inventory management, processing returns, and dealing with lost or damaged merchandise.
While these functions are crucial to keeping your business operational, there are several ways in which fulfillment centers can help your business grow, such as:
- Cost efficiencies: The cost of using a fulfillment center can be intimidating initially. After all, many small companies find they need one at a point when working capital is short in supply. However, these centers reduce the need for your business to make large investments in building or purchasing a warehouse, hiring additional personnel, and building infrastructure. Additionally, most fulfillment centers can enter into flexible agreements where you only pay for the space and services you need. When you need more, you can expand, and when you need less, you can reduce what you are using. This pricing arrangement ensures that you pay for what you need and no more. In the long run, it’s much more cost-efficient and effective than alternatives. And when your business is growing, you need space. Working with a fulfillment center is a much better solution that requires far less capital. These cost savings can be reallocated to other business needs that support ongoing growth and expansion.
- Faster and more accurate fulfillment: Fulfilling customer orders is a much more complex process than it may initially seem, particularly if you have an extensive product line. It’s easy to make mistakes or fall behind. However, modern consumers have a very low tolerance for delays or mistakes. These minor errors or shipping lags can greatly impact your ability to grow. If you aren’t meeting customer expectations, they won’t become repeat customers and definitely won’t provide glowing recommendations or reviews. Therefore, your ability to grow will be impaired by lost future customers as well as incurring additional expenses to fix mistakes and try to get the right products to the right customer. Both of these effects will eat away at your bottom line and negatively impact your brand. When you work with a fulfillment center, you can expect professional order handling that is accurate and efficient. These professionals can reduce the number of order mistakes and speed up the fulfillment process, leading to more satisfied customers who can give recommendations that will support business growth and expansion.
- Larger geographic territory: From a historical perspective, geographic growth was often only achieved when a company opened a new branch or physical location. But modern e-tail shops can reach national – and even international – markets when they partner with fulfillment centers. This benefit is the key to providing unparalleled customer service. As your business grows and you have inventory in more fulfillment centers around the world, your products will be closer to the customers, which means you can get them delivered quicker. This ability to unlock global markets is one of the best ways to support ongoing and long-term business growth. Most small businesses would be confined to serving a relatively small customer area without warehousing services. But, partnering with fulfillment centers often allows you to expand into any markets you want to target.
While these benefits are a tremendous asset that can help your business expand more aggressively and quickly than you had imagined, perhaps the biggest advantage is that outsourcing these functions frees up your time. With extra time at your disposal, you can turn your attention to core competencies and growth strategies, such as product development, market research, and customer service.
Having the ability to focus on your long-term business strategy is a great way to ensure that your company continues to grow and thrive in an ever-changing market. To learn more about the benefits of warehousing or working with fulfillment centers, contact Dawson Logistics today!