5 Ways An Effective Fulfillment Provider Will Save You Money
In a month which sees us focusing on driving efficiency, reducing waste, and cutting out unnecessary costs, let us not forget the humble fulfillment provider.
As they're hard at work behind the scenes, getting products into the eagerly awaiting hands of customers, it's easy to forget that you should also expect your service provider to be a source of ideas that could save you time and money.
Today, we'll look at some of the ways in which an effective provider will help you achieve greater efficiency and lower your costs.
5 Ways an Effective Fulfillment Provider Will Save You Money
Most owners and managers have some idea where they want to start streamlining when they hand over fulfillment to a third party. However, not everyone understands the breadth of experience that the right provider brings to the table.
With that in mind, it's worth considering the following five areas where an effective fulfillment partner can help save you money:
- Increased operational efficiency
- Rate negotiations and consolidated volume
- Established relationships in the industry
- Experience of what has worked before
- Expert insight into supply chain challenges and opportunities
This article will take a closer look at each of these qualities and how they can save you time and money on your order fulfillment.
Efficient Fulfillment: Time is Money
When you outsource your order fulfillment, you expect to see products stored, picked, packed, and shipped in a seamless process. You're hiring an expert, and expertise should equal efficiency. In turn, efficiency saves you time and money.
The importance of this relatively simple concept should not be overlooked. As the foundation of your daily operations, it sets the stage for every other potential cost saving.
It's reasonable to expect that an established supplier, 100% focused on the task of delivering your products to customers on time and in excellent condition, will strive to improve your performance levels and continue to get better.
This isn't always the case, but you should expect an effective fulfillment provider to deliver. As we covered earlier this month, major retailers are at the forefront of the current efficiency drive to squeeze better performance from suppliers.
If your current fulfillment provider isn't delivering the goods, it's worth taking a page out of the big brand playbook. Sit down with your suppliers, have an open discussion about your expectations, and if they still can't deliver, it's time to find a provider who can.
Consolidated volume
When you want to secure better shipping rates, it helps to have a seat at the negotiating table. Taken alone, the volumes of most individual businesses don't warrant that position. Bundle that business together with the cargo of multiple shippers and carriers can't deal you in quickly enough. This is where a third party provider comes in.
By contracting out, you gain access to cargo consolidation and the preferential rates that often come with it. That increased volume also offers more leverage on service issues, such as securing priority shipment status and limit the delays caused by rolled containers.
This increased assurance that products will ship as scheduled and arrive on-time provides a reliable foundation, on which the rest of the fulfillment process will operate more efficiently.
Industry Relationships
"It's not what you know, it's who you know."
(At least that's what's important according to fathers throughout the ages!)
While we'd qualify that somewhat - you need to know a heck of a lot to operate successfully in our business, after all - there's no doubt that having the right relationships matters.
You can read all you want about supply chain management, but if you can't call the person who can make it happen, things take a lot longer to get done. The time you lose trying to find that key contact is valuable enough in itself. When it delays a delivery or results in extra storage charges because you couldn't get your cargo off the quay, it's even harder to justify. These are the kinds of charges and wasted time that can be avoided by simply buying into the right relationships.
Find a provider who has spent decades moving goods nationally and internationally. You'll be amazed by how many doors it opens (and how much money you save as a result).
Enough Experience To Know What Works
How many fulfillment experiments can you afford to run before customers start complaining and your business suffers? There's no doubt that it takes time to find the right fulfillment solution, but too many mistakes along the way can be fatal. This is especially true of any growing business that trades on its service levels and ability to keep customers happy.
There's no doubt that it takes time to find the right fulfillment solution, but too many mistakes along the way can be fatal. This is especially true of any growing business that trades on its service levels and ability to keep customers happy.
An effective fulfillment provider will be the veteran industry voice, providing the pros and cons of any given supply chain element and suggesting new solutions when you need inspiration. For the same reason that you hire experienced individuals to head up key departments, it's important to find suppliers who have been around the industry. They should know what works, what doesn't, and be able to explain the challenges you will face if you choose to make certain fulfillment decisions.
Insight into Challenges and Opportunities
As a natural follow-on from the previous item, that same experience means that a good fulfillment provider will be able to suggest solutions you would never have thought of.
Even when a business isn't currently in a place to leverage the benefits they describe, a third-party provider can explain how far down the road these opportunities lie. This can be invaluable in terms of forecasting and goal setting. When you know where you need to be to achieve certain savings, it informs everything from cost modeling and procurement decisions to growth planning and overall business strategy.
That doesn't mean that you should always take their advice, but hearing what they have to say helps your business make informed operational decisions and keep costs down by anticipating the challenges ahead.
The idea that underlies all of this is to make sure that your fulfillment provider checks all of these boxes as you plan to expand.
At any level, whether it's contracting out your fulfillment for the first time or working with an existing supplier to cut costs and increase efficiency, you need to know that you have an experienced, engaged resource in your corner. The time savings alone make it worth the effort to seek out the right service provider, while the long-term value and efficiency they can add to your organization provide the extra incentive.
The bottom line?
View your fulfillment company and key suppliers as strategic partners, rather than mere service providers. An effective fulfillment provider moves beyond service, to become an extension of your brand. Seek out someone you feel good about working with, who understands your industry, and who has the experience and established relationships to get things done when you can't.