Earthblog

by Angela Cavallari Walker

Today's small business owners are turning to fulfillment outsourcing as a way to reduce their shipping costs, manage and control their inventory and streamline their processes. According to Brian Schoenbaechler, President of SBC Fulfillment, this not only gives merchants more control of shipping and packaging costs but allows owners to focus on increasing their bottom line. “Business owners want to spend more time on what they do best, which is running their business,” says Schoenbaechler.  Here are a few questions and answers to help navigate the best time and solution when seeking a fulfillment partner.

What is fulfillment outsourcing?
Simply stated, fulfillment outsourcing is the practice of using an outside vendor to store inventory and ship product to customers as orders are received. Other terms related to outsourcing fulfillment include: 3PL (third Party Logistics), outsourced warehousing and distribution centers. Over the years, fulfillment outsourcing has become a preferred method of managing back-office operations. Companies such as, SBC Fulfillment focus on handling this arduous task which can be costly and time-consuming.

Why not rent or build your own warehouse space?
According to Schoenbaechler, the estimated cost of renting and maintaining just 20,000 square feet of warehouse space can run as high as 100,000 annually. “This doesn't include other variables such as the liability of hiring employees to manage this space,” says Schoenbaechler.  Fulfillment companies are able to charge merchants a fixed cost for only the space that they use to store their inventory. Additionally, fulfillment companies typically offer larger warehouse space enabling merchants to expand and grow their business.

What role can a fulfillment network play in the world of Ecommerce?
Whether you are using USPS, FedEx, or UPS to deliver your goods your shipping was already being outsourced. Today, fulfillment companies are turning to technology to ease outsourcing for Ecommerce and traditional merchants. This “glass warehouse” concept gives businesses the ability to view their inventory, track and ship their orders all online from anywhere.  SBC has taken this technology a step further by offering a product called, Magento Connect - an application that allows current or new Magento customers to plug into SBC's warehouse management system.

When should a business consider outsourcing fulfillment?
Every business is different but all share the common goal of increasing productivity and profit. Here are some points to ponder when thinking of a good time to outsource.

Growth periods- As business sales increase so do does the need to be prepared to handle the volume without any hiccups.

Reducing costs- Outsourcing is a good way to view your current expenditures and cut your current costs.

Global growth- International growth can be risky. By outsourcing you assume less of that risk and are able to test the market without investing additional time and cost.

What should businesses look for when seeking a fulfillment company?
A good place to start would be through a referral. This could be a fellow business owner that you trust or through the Better Business Bureau .  Either way, you want to find a fulfillment partner that you can trust.  Here are a few other questions you should ask before making a decision.

Do you offer a trial period?  Before handing over your entire inventory see if the fulfillment company can provide a trial period for a smaller amount of inventory.

What software platform do they offer?  You will want to make sure that you are able to plug into their warehouse management system without the cost of purchasing software.

What is the location of their warehouse? Is the warehouse location/locations centrally located to where you will be shipping?

What are the terms and pricing of their contracts? Be sure to look for hidden costs and long-term contracts.

To learn more about fulfillment outsourcing or to obtain a quote click here

Tags: outsourcing | fulfillment | warehousing | ecommerce | georgia | magento