Watching your business grow can be a rewarding and exciting experience. However, business growth comes with several challenges. For many companies, one of these challenges revolves around fulfillment options.
The following information discusses the seven key signs that you’re about to outgrow your current fulfillment provider. If your company fits one or more of these scenarios, then you should begin planning ahead to secure more sustainable fulfillment solutions.
- You Need Additional Fulfillment Locations
As your customer base grows, your need for additional fulfillment centers will likely grow along with it. Warehouses that are not strategically located may cost you dearly in transportation costs, customer satisfaction, and sales. In some cases, shifting to a different location to better serve a higher concentration of customers can improve efficiencies. For other companies, adding multiple warehouse locations to decrease time of delivery and cost of delivery is a critical success factor. For example, ShipMonk’s eight U.S. locations can save clients an average of 49% on UPS/FedEx 2-day shipping and 5% on USPS Priority shipping. If your business operates out of only a single warehouse location, lack of additional warehouses may require you to look at new fulfillment solutions.
- You Need Additional Sales Channels
There are several reasons why your company may want to expand by adding one or more sales channels. For example, if you own a growing ecommerce DTC/B2C business, you may begin to penetrate the B2B market and suddenly require EDI capabilities. Perhaps your customer demands have started to shift over the last several months, and they expect orders to arrive through different means, such as a social media platform.
Whatever the case may be, quick adaptation to new sales channels is a common occurrence for owners of growing businesses. If your current fulfillment provider cannot integrate orders from multiple sales channels, it may be time to find a new provider.
- Your Current Fulfillment Partner Can’t Scale to Your Needs
A growing business is a wonderful thing, but you and your fulfillment partner must stand ready to keep up with increasing demands. If your fulfillment partner does not have the capabilities to scale to your anticipated needs, then it may be time to begin searching for other options. For instance, if your current fulfillment partner is a smaller, single-location, regional provider that you partnered with when your business was just starting out, then it’s likely that they may not be able to quickly scale up to future increases. If your current fulfillment provider is struggling to keep up with your growing demand, you will likely begin to feel the pain of increased delays in receiving inventory and getting orders fulfilled.
- You Require Additional Technology to Keep Up
Your growing business may require a more streamlined inventory or order management system (IMS/OMS) to keep track of both incoming and outgoing quantities. Perhaps more advanced labeling or tracking technology is called for. In some cases, integration with additional sales channels or other systems used by your company is required and can’t be fulfilled within your current operation. Whatever the case may be, it is important to determine the technological capabilities of your current fulfillment provider, and see how closely they align with your projected needs.
- KPIs Are Not Being Met
If your fulfillment partner has demonstrated a pattern of committing costly receiving, inventory, order picking, or shipping errors, then this may be a red flag that it’s time to look elsewhere. For example, if inadequate inspection procedures are resulting in the shipment of damaged/defective products, an increase in the number of returns, and even lost sales, then something needs to change. Top 3PL fulfillment providers like ShipMonk ship with order accuracy rates of 99.9%. How does your 3PL compare?
- New Products Require New Capabilities
If you add new products to your catalog that require special storage conditions (such as a climate-controlled environment or cold storage), then you need to investigate whether your current fulfillment provider can meet such specific needs. Even a simple shift in product offering can cause a fulfillment company to operate outside of their comfort zone and necessitate a move to a new company.
- Additional Services are Required
As your business grows, you may need to invest in additional services, such as custom packaging, Amazon FBA preparation services. returns handling, or post-purchase protection capabilities. If your current fulfillment partner does not have the infrastructure to support such add-on solutions, then you may need to look into companies that can serve as a “one-stop-shop” for all of your fulfillment needs.
It’s important to keep an eye on these seven signs that your company will soon outgrow your current fulfillment options. If you do so, you’ll be able to stay ahead of the curve, and smoothly transition to enhanced solutions and/or new partnerships as needed.
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