Is Fulfillment Right for a Start Up Business?

by Will Schneider

Each month, quite a few start up businesses visit our site looking to find information on whether or not it makes sense for them to use outsourced warehousing and fulfillment services. Usually, they’re looking for the costs of fulfillment services to see if they can afford to use them. In our opinion, there’s really two good reasons to do the warehousing and fulfillment internally to start. And we believe there’s one good reason to outsource from the very beginning. Let’s explore the options…

There’s really two good reasons to not use outsourced warehousing and fulfillment services as a start up. First and foremost, if you’re core business involves distribution or if you believe that the logistics are so important and critical that you cannot outsource, then by all means keep it in house. However, most companies don’t fall into this bracket. Secondly, we totally understand that your start up may be constrained by capital, and therefore you may not have the funding to be able to use a fulfillment service. In this case, the only option is to use your own labor – which, by the way, isn’t FREE!

Which brings us to our last point – why we believe that many small businesses would be best suited by outsourcing fulfillment. If fulfillment and warehousing aren’t your core business and if you at least have enough money that outsourcing is an option, we believe that it can be the best option for you. Why? Because of that beautiful thing called “opportunity cost.” A lot of small business owners like to have control over all aspects of their business. But by keeping control of the fulfillment and therefore processing orders yourself, you lose valuable time that could be spent elsewhere – like in sales and marketing.

It is absolutely true that the biggest problem that most companies will face is a “sales problem.” And by sales problem, we mean not enough sales! Think of it, what inhibits you most in your business? Not having enough funding (or sales) to expand and do what you need to do to run the business the best way possible. By getting the warehousing and fulfillment of of your shoulders, you’re much better suited to spend time where it needs to be spend – in growing the business. And if you’re not growing as a business, you’re shrinking.

This entry was posted on Monday, February 13th, 2012 at 11:06 am and is filed under Small Business Resources.