As online shopping becomes increasingly popular, companies are more in need than ever of efficient, reliable fulfillment. The U.S. Census Bureau reports that eCommerce sales are consistently rising, as is the rate of online sales. With this growth only projected to continue, online retailers must consider how to remain competitive in an increasingly fast-paced market.
While some businesses benefit from using in-house fulfillment and logistics management to meet customer orders, internal operations have limitations. Businesses that plan to scale operations or increase their inventory can benefit from outsourcing to a fulfillment company. In this detailed comparison, explore the benefits and limitations of eCommerce fulfillment vs. in-house fulfillment so you can decide which is best for your operation.
What Is In-House Fulfillment?
In-house fulfillment involves storing, placing, and shipping orders directly from the company, using their own resources, staffing, and facilities. A company that uses in-house fulfillment stores, orders, and manages its own inventory.
Company staff handle orders in-house, including receiving orders, processing payments, packaging items, and shipping them to the customer. The business also manages any returns, refunds, and other services, as needed.
Advantages of In-House Fulfillment
If you opt for in-house fulfillment, you benefit from direct control over inventory and fulfillment, as well as close quality assurance oversight. This method may work for very small businesses or those with limited inventory. If your company requires close control of branding and packaging, in-house fulfillment could be more cost-effective than outsourcing.
In-House Fulfillment Challenges
In-house logistics and fulfillment require significant resources, including time, staffing, and storage space that may be out of reach for many online retailers. Additionally, limited resources for fulfillment in-house can hamper your brand’s ability to scale operations to meet growing demand or expand your product offerings.
What Is eCommerce Fulfillment Outsourcing?
Third-party logistics (3PL) and eCommerce fulfillment services facilitate order fulfillment on behalf of partner businesses. If your business plans to grow or scale up on a national or international level, you could benefit from outsourcing logistics and eCommerce fulfillment to a dedicated company.
Benefits of Outsourcing eCommerce Fulfillment
A 3PL and eCommerce fulfillment provider stores inventory in a dedicated fulfillment center. They can handle the full order lifecycle, including packing, shipping, and return management, so your company does not have to allocate time, labor, and resources to logistics and fulfillment activities.
Generally speaking, outsourced fulfillment is ideal for companies that want faster shipping, lower shipping rates, and access to automation beyond their budget.
Considerations When Partnering With a 3PL Provider
When outsourcing fulfillment, consider the 3PL provider’s monthly fees to ensure they meet your budget. In addition, make sure the 3PL provider you choose offers the reliability and oversight capabilities you need for your products.
Relentless Fulfillment is a full-service 3PL committed to providing customized fulfillment solutions for businesses worldwide. We focus on facilitating scalable growth through smart systems and targeted execution.
Using the latest technology, we monitor inventory in real time and automatically sync orders to ensure accurate and efficient order fulfillment. You can trust us to handle everything from custom packaging and branding to subscription boxes, kitting, bundling, shipping, and returns.
Comparing eCommerce Fulfillment vs. In-House Fulfillment
Quality order fulfillment is a crucial aspect of your business strategy. To help you decide on the best option for your business, we’ve summarized the primary considerations for both eCommerce and in-house fulfillment.
Cost Comparison
At first glance, the monthly cost of eCommerce fulfillment may seem higher. However, in-house fulfillment has numerous hidden expenses that could cost you more in the long run. Labor alone is a significant expense when you consider the staffing you need for order processing, packing, shipping, and returns.
Add to that the cost of inventory, storage space, shipping supplies, and logistics software, and you may find that the cost of doing your own fulfillment is greater than the monthly fees you pay for outsourcing to a 3PL company.
Relentless Fulfillment offers custom quotes tailored to your business needs and budget. We can help you determine an approach that balances cost-effectiveness with your company’s order fulfillment needs.
Control and Flexibility
With in-house fulfillment, you have complete responsibility for the control and oversight of the fulfillment process. With a 3PL partner, you rely on those fulfillment services to manage logistics and fulfillment.
3PL providers like Relentless Fulfillment specialize in inventory management and eCommerce fulfillment. We have the tools and technology to reliably manage and adapt to changing fulfillment needs as your operation grows.
Scalability
As your business grows, in-house logistics and fulfillment often struggle to keep up. If you find yourself paying more than you’re earning to scale or modify your fulfillment operations, it may be time to switch to a 3PL provider.
Because their business is focused on fulfillment, 3PL providers have the resources and equipment to scale and adapt to changing business needs. Your business can save money and meet customer expectations by outsourcing fulfillment to an agile partner.
Customer Experience
When you handle your own fulfillment operations, it takes an entire team to receive orders, package them, and ship them to the customer. Even with a dedicated team, you may find it difficult to keep up with shifting demand, new inventory, and market shifts. Scaling logistics and shipping operations can become increasingly difficult or even impossible with a small in-house team and limited resources.
If you have trouble meeting your customers’ expectations for shipping speed, accuracy, and returns, it could harm your business and reduce your profits. At Relentless Fulfillment, we understand the importance of unique branding and ensuring customer satisfaction. We offer customizable logistics services, inventory management, and order fulfillment tailored to enhance your customers’ experience.
Risk & Reliability
With in-house fulfillment, you know your employees understand your products and share your business goals. However, they may not have the know-how to reliably ship orders at the scale you need. Efficient fulfillment services require logistics knowledge and resources. Without such experience, trying to keep your order fulfillment in the company could actually harm your business.
Outsourcing your shipping to a 3PL partner can significantly reduce the risk of human error. eCommerce fulfillment companies like Relentless Fulfillment are logistics-focused organizations with experience managing products for a wide range of businesses.
We know what to expect from shipping companies, and we have systems in place to process, package, ship, and track orders quickly and accurately. We allocate our resources to fulfillment technology, equipment, and inventory management space, while you can use your own resources to grow your business.
How To Choose the Right Fulfillment Strategy for Your Business
Establishing the right fulfillment strategy for your business depends on numerous conditions. Consider the following factors when choosing between eCommerce fulfillment vs. in-house fulfillment:
- Order volume: Do you have the time and staff to manage fulfillment consistently?
- Growth projections: If your business grows, will you be able to allocate more resources to meet your fulfillment needs?
- Budget: Can you afford the cost of labor, equipment, supplies, and shipping for your fulfillment needs?
- Brand experience: Do you trust your internal team or 3PL partner to provide the brand experience you want for your customers? Are shipping errors causing you to lose customers?
- Competitiveness: Are you keeping up with the competition when it comes to shipping speed and customer experience?
Adjusting Your Fulfillment Strategy To Meet Shifting Business Needs
Fulfillment operations are not one-size-fits-all. It’s normal for your order fulfillment requirements to change as your business grows, scales operations, and modifies product offerings. Meeting these needs sometimes requires a hybrid or transitional approach, with some aspects handled in-house and others outsourced.
For example, you may opt to handle order processing in-house and outsource packaging and shipping to your 3PL logistics partner. As your inventory changes or customer demands increase, you can work with your 3PL provider to adjust fulfillment services.
Signs It’s Time To Outsource Your Fulfillment
When is the right moment to change your fulfillment strategy? Consider outsourcing to a 3PL provider if you’re experiencing:
- Order fulfillment delays: If your orders are taking too long to fulfill, you risk losing customers and harming your brand. Consider outsourcing to a 3PL if your fulfillment times are getting too long.
- More mistakes and complaints: More order fulfillment errors or an increase in customer complaints may be signs that your orders have exceeded your fulfillment capacity. Assess the services of a 3PL provider to streamline your order fulfillment process and reduce the potential for errors.
- Expending too much time and resources: If your fulfillment operations are affecting your company’s ability to focus on growth and marketing, it could be time to partner with a 3PL provider.
- Insufficient storage space: Consider outsourcing to a 3PL company that offers inventory management if you need more space for inventory. A fulfillment company has warehouses to hold inventory so you don’t have to spend sales growth income on storage space.
- Inadequate technology: When you need more complex order and fulfillment management software, you may benefit from hiring a company to handle fulfillment on your behalf. Keep in mind that a new software system requires upfront costs for installation, integration, and training, as well as ongoing maintenance and upgrades.
Ask Our Trusted Logistics Experts About eCommerce Fulfillment vs. In-House Fulfillment
If you are ready to streamline your fulfillment operations, partner with Relentless Fulfillment to scale efficiently and enhance customer satisfaction. Our clients trust us to handle every aspect of 3PL fulfillment, including pick & pack fulfillment, inventory management, and return processing.
From our state-of-the-art distribution center in Reno, NV, we are uniquely placed to provide quick, efficient delivery services to clients up and down the West Coast. Our experts are available to discuss customized fulfillment options tailored to your needs. Contact us today to discuss how our 3PL services can enhance your eCommerce business growth.
