How to Choose the Best Ecommerce Fulfillment Option For Your Brand
Fulfillment is one of those things that most ecommerce companies set up once and then typically never think about again until there’s a reason to. The thing about it is fulfillment needs will change based on the stage of business you’re in. When you’re in the early survival stage, your needs are much different than when you’re in a health or influence stage. In this article we’re going to dig into the different options you have in fulfillment and more importantly what the important areas to consider are based on your stage of business so you can maximize this area.
Deciding Whether to Insource or Outsource Ecommerce Fulfillment
When it comes to fulfillment, you have 2 basic choices: insource or outsource. What you do depends on the stage of your business and your customer unboxing experience philosophy.
1. Consider Your Growth Stage
We talk about the different ecommerce business stages more here. Most ecommerce businesses in their infancy or early stages start with a simple outsourced solution. This is the obvious choice. Not only does it take a huge load off of your business, but it’s typically the cheaper option for a low volume operation.
But, once your business has grown a bit and you are starting to get traction with your brand, it is time to reconsider. Outsourcing may still be the best option for you. However, it is often no longer the cheaper option and there are some serious upsides to insourcing, like being able to tailor the customer unboxing experience. So make sure to consider the insourcing/outsourcing decision for fulfillment at each stage of growth.
2. Consider Your Customer Experience
If you insource, you have the opportunity to create a unique customer experience that builds your brand through each touchpoint from initial contact through unboxing and beyond. This is not easy to do, but a key part to growing customers into raving fans. You have to be committed to this vision and willing to invest time, resources, and money in making your unboxing experience one that your customers cannot forget. However, this is one of the best ways to ensure that your customers become fans, purchasing from you again and again and becoming advocates, spreading the word to their friends.
That being said, insourcing is not for every brand. If you do not have the resources to invest in insourcing, stick with outsourcing. This is the most hands-off approach and typically more cost-effective at lower volumes.
The exception to this rule is for wholesale businesses. This is a whole different animal. If your business is a wholesale business, it’s better to work with an experienced partner for fulfillment (in other words, outsource). There are very strict rules for wholesale shipments based on each recipient and there is no customer experience component so outsourcing is your best option.
Once you’ve made your decision between insourcing and outsourcing based on the stage of your business and your philosophy, here are the steps you should follow to put your fulfillment process into place.
How to Outsource Your Fulfillment
Step 1: Search for a partner
There are often pick and pack warehouses locally in your area, so try googling “outsourced fulfillment”, “pick and pack fulfillment warehouse”, or “ecommerce fulfillment” with your city to find a partner near you. Or, if you have access to other ecommerce brands, ask them for recommendations. Alternatively, we can make recommendations.
Step 2: Confirm partners integrate with your ecommerce platform
This is the most important part of picking a partner. If a fulfillment partner is not integrated with your ecommerce platform, just walk away. It’s absolutely vital that your orders stay in sync with the fulfillment process and that shipping information is getting passed back to your ecommerce platform. You also need to ensure inventory data stays in sync and customers are getting their items on time. Issues here that affect your customers can really hurt your brand.
Step 3: Understand how pricing works
The final step of vetting fulfillment partners is understanding their pricing. Dig into how each potential partners’ pricing works. Usually there is a flat fee for pick and pack per product (or per item that gets packed into a package, which could include other marketing materials or extras). On top of that, there is the cost of shipping. Most warehouses have bulk rates with carriers so they actually pay less for shipping than standard rates.
Also, consider the price that you charge to customers for shipping. In ecommerce we typically recommend standard flat rates over live rates for customers checking out. This is a better experience for your customers, and it also keeps the accounting simpler on your side with your fulfillment partner.
How to Insource Your Fulfillment
Step 1: Choose a shipping software platform
We typically recommend Shipstation. It is the top platform when it comes to managing your fulfillment process and is very easy to manage and track all of your shipments. It even offers a branded tracking and returns portal for your customers!
Again, when it comes to pricing your shipping for your customers, go with a flat rate. It makes your life so much easier.
Step 2: Integrate with your customer service platform
Fulfillment and customer service need to work hand in hand, especially when it comes to returns. It may come as a surprise, but easy and hassle-free returns are key to building fans. Make this experience seamless for your customers. Consider integrating Zendesk (or another customer service platform) as well as Klaviyo to send out automated email series to your customers based on the progress of their order.
Step 3: Automate the return process
As we mention above, easy returns are key for successful ecommerce businesses. You may get this capability directly through your shipping software. If not, try out the app Returnly if you’re on Shopify.
Step 4: Integrate your order management system
If you use an order management system, like Stitch Labs or Oscar, integrate this platform as well! This brings everything into a unified dashboard for easy viewing and management.
Step 5: Define your customer experience
This is where the fun part begins. You insourced for a reason, and that is to create a truly unique and exceptional unboxing experience for your customers.
First, purchase branded packaging with a custom design that reflects your brand. We don’t mean slapping your logo on a standard box. Be unique and use your imagination to design packaging that fits your brand. Don’t forget to include information on how to use your product. You can even consider surprising your customers with something free in the package beyond their purchase! When you insource, the opportunities are endless.
Step 6: Help your customers share
It’s also important to give your customers a way to share your brand with their friends. Include coupon cards that customers want to share to spread the word about your products. This is an incredibly low cost marketing tactic that will get the word out about your brand.
Whether you insource or outsource, this is an important part of the fulfillment process.
How do you choose whether to insource or outsource?
At the beginning, you must weigh cost versus customer experience. If your brand is competing on price, then the cost is going to be the primary driver in your decision. However, if you are trying to build a long-term brand, then focusing on experience and sacrificing margins in the near-term might be the right decision for you.
Once your brand is established and you’re seeing higher order volume, you must weigh cost versus infrastructure instead. For a larger brand, insourcing is often the cheaper option (and has the added benefit of a better customer experience), but there is a high level of infrastructure required. Insourcing demands a lot of people resources as well as time and energy.
The important thing to remember is that shipping is not the end of the journey. It’s just the beginning. You don’t want one-time customers. You want fans.
Pro Tip: Incentivize your customers to record and review their unboxing experience through a video. These reviews are incredibly impactful and provide your team with media to use in advertising.