While the thought of outsourced fulfillment can make a retailer nervous, in-house operations can bring a whole new level of frustration that you may not think is possible. Here, we examine the top 8 biggest “ARRRRGH” moments that direct-to-consumer retailers feel when they’re trying to manage everything themselves. If you’re feeling any of these, it may be time to consider a conversation with us – because nobody wants to live their lives frustrated, right?
1. Where did all the time go?
One of the biggest pains with in-house order fulfillment is the amount of time you will spend to make it run smoothly: continuously staffing your warehouse, processing returns, managing inventory and warehouse footprint, negotiating with vendors, ordering packaging supplies.. even listing it out takes a while! When you think of all that attention that you and your team could have put into growing your business, developing new products, or focusing on employee development, it’s more than frustrating.
2: Where do I keep all this stuff?
Granted, the sweet returns of a sales boom may soften the inconvenience of tiptoeing around all that merchandise, but with in-house operations comes the need to receive and store your entire inventory yourself. If you are bursting at the seams and struggling to make room, nobody wins. Remember: cramped spaces means smashed boxes, wear and tear on packaging, damaged goods, returned products, and disgruntled customers.
3. Isn’t all of this work supposed to save me money?
Many retailers don’t want to outsource their fulfillment operations because they feel it ‘saves them money’ to keep it in-house. In some cases, they may be right, but more often it’s simply that they don’t see the big picture and understand how much it’s costing them to do it themselves. Building rent and maintenance, employee wages, software licensing fees, machinery costs and maintenance, and even utilities are just some of the costs to consider when comparing your costs versus that of an outsourced provider. When it’s apples to apples, many retailers find that they’re paying more to go it alone!
4: But I want a shipping discount, too!
It’s no secret that outsourced fulfillment providers get better freight rates than most small to mid-size online retailers: they ship a much larger volume of packages; therefore, they qualify for volume discounts and incentivized pricing not readily available to other shippers. If you’re a small fish in a big parcel-shipping pond, arguing and demanding low freight rates will not get you very far with carrier negotiations.
5: But I thought someone else ordered that inventory?
Inventory management is crucial in ecommerce. When the customer clicks ‘Buy now’, the last thing they want is an error message that their item is out of stock or a follow-up email that it’s on back order. When you’re in-house, the vendor relationships and purchase order management fall on you. With many outsourced providers, inventory management can be automated so that this doesn’t happen – and you don’t have to worry about stock running out, ever.
6: Staffing a warehouse sucks!
If you’re running a warehouse, you’ll need a variety of staff to make it work: pickers and packers, receiving staff, personalization staff (if you offer it), replenishment employees, and managerial positions to oversee it all. You’ll need to dedicate time and resources to constant hiring and training, since attrition rates in this industry are pretty high. And those peak times? Yeah, you’ll need about double the staff you normally use, and you’ll have to get rid of them once the season is over. If that doesn’t sound like something your team wants to do, no worries – outsourced fulfillment providers take care of all of that for you!
7: Uhhh, about your order..
If you’re managing your operations in-house, chances are you’re also handling your customer care, too. While having your contact center located in the same place as your inventory is convenient (heck, it’s one of the reasons why we offer it to our clients!), things can get frustrating fast for your customer service department if your operations team doesn’t have a handle on the process. An overwhelmed warehouse leads to incorrect orders, delayed shipments, and an uptick in product returns – all of which lead to more activity for your contact center agents to address. And when they get frustrated with frequent problems caused by operational inefficiencies, it’s not good news for anyone.
8: Why do I keep getting bad reviews?
When a customer posts a poor review to RipOffReport, Consumer Affairs, or on your site, often times it has nothing to do with the products you sell. Longer-than-promised delivery, damaged packaging, or poor order condition are some of the most complained-about topics in ecommerce customer reviews – all of which tie back to the fulfillment process. If you’re consistently seeing bad reviews that relate more to your back-end operations than your products’ performance, it may be time to seek some help.