For many online retailers the decision to outsource the order fulfillment function to a supply chain professional is often delayed because of the company owner’s entirely understandable reluctance to ‘let go of their baby,’ says William Walker, sales director of online fulfillment specialist, Walker Logistics.
For any online entrepreneur the ability to spot that the time is right to hand responsibility for his or her company’s order fulfillment processes to a third party is essential.
But, often, a desire to ‘micro manage’ every aspect of the business means that the decision to outsource to a supply chain professional is delayed and the company loses momentum at a critical moment in its development.
“Many internet trading companies have been started by people who feel an entirely understandable reluctance to ‘let go of their baby’,” says William Walker.
“It’s easy to see why, if you’ve spent a number of years building up a business, the idea of handing over all of your stock to another company can take some getting used to!” he adds.
“But,” he continues, “business owners who cannot overcome this emotional need to control all aspects of their operation risk stifling its growth.”
The competitive and economic benefits of outsourcing order fulfillment to a logistics specialist are well documented and, in most ‘reasons to outsource’ lists, cost reduction and the chance to free the client company’s senior management’s time to focus on growing the business are usually near the top.
“The fact is that outsourcing to a logistics company does allow you to focus on your core business and usually does present an opportunity to reduce cost,” says Walker.
“There are many more good reasons to use a logistics company but these two alone should be enough to sway most online SME companies,” he adds.
So how does an online company know when it is approaching the moment in its development to seek fulfillment support?
“There are a number of common change catalysts,” says Walker.
He continues: “One of the most frequent drivers is a business’s success. If you are a fast-growing company that has to increase its stock holding and the amount of space needed to store that stock, you will obviously require bigger premises. But deciding exactly how much bigger can be difficult to gauge. If you are growing by a large percentage each year it might mean moving several times and this would obviously be costly, time consuming and inefficient.
“One of the benefits of a 3PL is that it can grow and expand with you. So if you’ve found your growing capacity is causing you problems it’s time to get professional outsourced support.”
As a company’s client base grows, lack of space isn’t the only problem: internet traders frequently find themselves running out of time to pick, pack and dispatch orders.
“Often, picking and packing duties will be handled by the company owners plus a few other staff members whose job isn’t really picking and packing,” explains Walker.
“When order volume simply becomes unmanageable for the size of your team and their time, delays and errors creep in which lead to unhappy customers and more time spent dealing with customer service issues. It can get out of control and become a vicious circle quite quickly.”
Walker continues: “Of course, most business owners want to concentrate on growth and becoming more profitable, so when you find you are having to focus more and ore time on logistics or supply chain issues, it means you are neglecting other aspects of your business. As a result opportunities can be lost and important strategic decisions delayed to the detriment of the business.
“A 3PL partner takes those time headaches away and leaves you to focus on what matters most.”
Outsourcing: Case Study
One company that has recently taken the plunge and moved from managing its own supply chain to outsourcing is Pampelone..
Founded some two years ago by former fashion publicist, Holly Anna Scarsella, Pampelone had handled its logistics function in-house but, with sales - particularly online orders via the company’s website – growing significantly, this had become unsustainable.
Walker Logistics now has responsibility for managing the company’s B2B and B2C supply chains.
Walker receives in-bound stock from India – where the Pampelone range is made – and stores lines at its multi-user facility close to Reading. From here orders are picked, packed and dispatched to Pampelone’s stockists as well as individuals who buy online.
Consumer-bound items are gift-wrapped and dispatched along with a personalised delivery note and, in some cases, a complimentary gift, in specially designed packaging that reflects the Pampelone brand’s quality.
Because of the nature of the clothing produced and sold by Pampelone, orders from UK retail stockists tend to spike in the run-up to the holiday season, but online sales remain at a consistently high level throughout the year.
"The ability to cope with volume peeks and uneven demand is an often overlooked benefit of outsourcing, but it is something that will help Pampelone enormously,” says William Walker.
“Pampelone is just one example of a company that is enjoying the benefits of outsourced logistics because its owner overcame the natural and perfectly normal fear of ‘letting go’. There are many more. But, equally there are others who are failing to realise their true professional in part because their owners or senior managers simply can’t release them,” concludes Walker.