Ian
It is generally a smart move to outsource order fulfilment when you become a mid-level volume shipper.
But before moving in with the deal, it is a good idea to take some precautions to make sure that the partnership goes on smoothly while your business derives maximum benefits. So, what are the pointers you need to keep in mind before deciding on a partner?
Say no to Long-Term Contracts
Don’t seal a deal for the next ten years binding to this single contract. Things change, businesses evolve and there is a whole lot of competition out there. If you should go for a long-term plan, though, Flexi pricing can be a good idea. That’s the deal with long term contracts. So, when you have a lull period, the logistics partner should be able to adapt to your needs and adjust cost accordingly. A warehouse lease can be taxing if it’s a fixed sum every month, irrespective of seasonal surges and troughs.
Staff requirements
Order fulfilment requires a good understanding between staff at each end. Or, you can ask the partner if they can handle all staff requirements. That’s letting rid of one major hassle. It works out to be cheaper too. Typically, warehouses are elsewhere. Managing a separate crew out of vicinity might become an issue. So, it’s a good practice to let the partner manage labor for receiving, inventory management, and order processing and shipping.
State the specifics
Yes, the partner knows logistics and shipping better than you do. That’s why you have chosen him. BUT, that does not mean you should not have a say in certain things. Make it very clear that they follow the same policies that you want them to, when it comes to handling your goods. Let’s say you deal with luxury bags. It doesn’t bode well when your bag is sent to customers in trashy packaging. And it is very important that they stick to delivery deadlines.
How much do you save by outsourcing?
Ask yourself this question before you sign up for a partnership. You might have limited storage if not a warehouse. You might have the personnel to pack, ship and take calls on shipping relate queries. But what is the sum that you spend for this? And when you answer this question, you also need to understand that you are freeing yourself of mundane tasks which leaves you with time to focus on what matters most.
