When you first begin your business every new achievement feels momentous. Every milestone is also a bona fide sign that you’ve made the right decision in pursuing your entrepreneurial dream. As your business grows the decisions that you need to make gradually grow more complex. The stakes rise higher and higher as your business becomes more successful. You’ll be dealing with larger amounts of money and also will need to consider your existing infrastructure and the needs of your staff members when you’re making decisions.
As your business grows you will need reliable, efficient order fulfillment in every step of the ordering process in order to give your business a leg up on the competition. As a business grows the fulfillment process becomes an even more important part of the daily operations of the business because meeting customer expectations is crucial to ensuring growth. Businesses may not be able to afford to build their own infrastructure capable of handling an increased amount of orders, but fulfillment centers can pick up the slack.
Third Party Fulfillment Houses
By outsourcing to a third party logistics provider a small business owner achieves the incredible two-for-one trick of minimizing operating costs while greatly advancing the level of their order fulfillment capability. Because service provider companies specialize in the logistics management of all the “back end” operations of gift fulfillment, they’re able to extend their client businesses a level of efficiency and expertise that the client itself likely couldn’t mange on their own.
This back end can include warehousing, order processing, order shipment preparation, and possibly include some after-the-sale services such as direct mail marketing management and customer service staffing. These last two help the client business build its customer base, allowing them the freedom to aggressively pursue more customers and also to resolve customer issues and questions that may arise after the order fulfillment is completed.
The Outsourcing Partnership
Small business contract their logistics management needs to a third party service provider, usually in exchange for a fixed percentage of the profits derived from every product sold. In return, the client small business virtually dispenses with its own back end order fulfillment resources and becomes free to channel the saved revenue towards front end business development.
Outsourcing typically takes place when a small business finds its fulfillment abilities outpaced by its product demand. But such problems are solved permanently by employing a fulfillment service company, who will recruit new staff and warehouse space as necessary to complete their outsourcing agreement.