Shipping logistics may not be rocket science, but it requires much hard work and understanding. In fact, shipping logistics is the most critical area for a business that depends on inventory, and business owner wants to maintain inventory records accurately.
Besides inventory management, cutting transport costs, retaining qualified labor, supply chain visibility, etc., are the top challenges faced in the shipping landscape. While these challenges alone are enough, there are several other reasons to outsource shipping and logistics fulfillment to professionals.
Reduces Shipping Costs
Shipping costs can be a huge expense for businesses. Whether you’re a small business that needs to ship out one product or a large company with hundreds of products, shipping costs can eat into your bottom line.
So how do you reduce shipping costs? Outsourcing your fulfillment to 3-party logistics fulfillment providers.
When you outsource your fulfillment, you get the benefits of having someone else process your orders and manage inventory while saving money on shipping costs. It eliminates the need for your warehouses, equipment, and staff. This means you’ll be able to rely on one company’s expertise to handle all your operations.
Besides warehouse management and labor, you also save on fuel costs. The thing is that most 3PL fulfillment service providers have multiple warehouses and fulfillment centers located across a country and even worldwide (if they are multinational). This means that the products can be stored near potential buyers. Thus, whenever someone orders the product, the 3PL service provider can simply ask the nearest warehouse manager to send the delivery. Distributing products this way can help save up to 25% of costs, according to a Nosto study.
Ensures Timely Delivery
Timely delivery is one of the most crucial factors influencing the customer experience. Most customers want their ordered products delivered within a day or two. According to a PWC survey, 42% of respondents cite that one of the biggest challenges they face while shopping online is that they get deliveries later than the time they were told during the purchase. This can lead to significant inconvenience.
The importance of timely delivery is such that over 40% of consumers are willing to pay a small price for same-day delivery. Moreover, 24% of consumers are ready to pay extra for parcels within one or two hours of their preferred time. When you outsource shipping to professionals, they can take care of all this so that you don’t have to worry about late deliveries.
With a 3PL provider, you’ll also have access to more resources than you would if you were handling the shipping yourself. The 3PL has its own equipment and employees that they can put into action at any time—and they don’t care whether or not it’s your job or theirs!
Allows You to Focus on Strategic Tasks
Starting and managing in-house shipping requires you to consider various things, such as:
- Customer service management
- Inventory management
- Product fulfillment
- Third-party logistics
- Pick and pack services
- Materials handling and storage
- Warehousing and distribution services
- Freight forwarding services, etc.
Your company has limited resources, and you need every one of them focused on the things that will make you successful. In such a case, you don’t want to use those resources on something like delivering the product to the customers and handling their complaints if the delivery gets late.
By outsourcing your fulfillment needs to a partner who specializes in this type of work, you’ll be able to focus more on growing your business instead of worrying about the logistics behind shipping! Your company does not have to worry about purchasing or maintaining expensive delivery vehicles and equipment. You also don’t have to deal with the hassle and expense of hiring qualified drivers or keeping up with driver training.
Enhances Customer Experience
The customer experience is an essential part of any business and a huge factor in determining whether or not a customer becomes a repeat buyer. Data shows over 80% of customers will switch companies after a poor experience. On the other hand, consumers are also willing to pay more if they receive a good experience.
Hence, you must ensure the best customer experience to get an edge in a competitive market. That’s where 3-party logistics fulfillment comes in. Outsourcing shipping to 3-party logistics fulfillment can enhance the customer experience in several ways.
- First, it allows you to focus on the core of your business—your products, service offerings, and brand—and outsource the logistics work to experts.
- Second, it allows you to expand your reach and distribution channels without investing in infrastructure or new employees.
- Third, it allows you to speed up the distribution and delivery process so your customers can get the products quickly.
- Fourth, it allows you to save costs that you can spend on improving customer experience by investing the saved money in technologies and services like chatbots, personalization, quick turnaround, predictive analytics, etc.
Gives Access to Latest Technologies and Data
Outsourcing shipping and fulfillment to a 3-party logistics provider gives you access to the latest technologies and valuable data.
Third party logistics providers can use their advanced software to get your shipments where they need to go, with all the information you could want about how that shipment is going. They can tell you how many shipments are coming in, where they’re going, how long they’re taking, and even what weather conditions may affect them.
This kind of data can help you make smart decisions about which routes to take when shipping your product. You’ll know what weather conditions are likely on any given day (or month), so if your product needs extra protection from heat or cold, you’ll know what days are better than others for shipping. You’ll also see whether there’s an increase in shipping volume over certain times of year—which might mean a surge in demand for your product!
Not only you, but they can also give this data to the customers. Thus, the consumers waiting for their delivery will know exactly where their delivery has reached and when they will get it. And this is crucial data for your clients. According to a report from Project 44, over 60% of customers are more likely to buy from a site that shows them delivery times, whereas 47% of buyers will likely restrain reordering due to a lack of delivery transparency.
Handling shipping in-house is doable, and if you have the time and resources, you can provide the same level of service through your business. However, it’s worth knowing that many fulfillment companies offer order handling and delivery services with ample benefits to businesses.