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Tom Ashley, Client Services and IT Director.
Continuing our series in which ILG Strategic Development Manager Lee Simmons and I endeavour to answer all the key questions about outsourcing your fulfilment operations, this time I’m going to outline the advantages of outsourcing to a specialist firm like ILG.
Based on feedback from our customers, the chief reasons for choosing to outsource fulfilment are a desire to grow their businesses and to get away from managing warehouses! This list of further reasons will help you decide whether outsourcing is the right decision for you.
We run an activity based cost model, which means that customers are charged only when they’re items are touched, eg booking in, quality checking or dispatching. This means a big reduction in fixed costs compared to running your own fulfilment operation, where you will have to pay for your own warehouse and office space whether you’re processing 100 orders a day or just one. The only fixed costs you should see from us are storage and management fees.
Running a warehouse comes with risks, particularly where heavy machinery is involved. Outsourcing places the responsibility for Health & Safety solely on your provider, who should already be fully set up to comply with the regulations and provide the correct equipment, training and procedures to keep staff safe.
Members of staff calling in sick can really hurt, especially if you have a small fulfilment team. The advantage of outsourcing is that you have access to a larger pool of labour, which can absorb staff absences and enable your provider to plan for holiday and sickness, so you have the peace of mind of knowing that your fulfilment operation is always fully manned.
This for me is the most compelling reason for outsourcing. I’ve yet to meet a client who got into fashion with the hope of running a warehouse. Outsourcing to a trusted logistics partner removes the stresses and strains of managing day-to-day operational pressures, allowing you to focus on the bit you love and get creative.
As well as giving you more time to develop your products and designs, outsourcing your fulfilment will also free up time for you to study your competitors and customer insights, so you can plan your sales and marketing for even better results.
Because we are managing logistics for numerous customers, shipping thousands of items each week, we have considerable purchasing power, which enables us to secure much better rates from a range of carriers than you could as a single, lower-volume customer. We often find that our consolidated purchasing power offsets the additional cost of warehousing for our clients.
Most fulfilment houses will run on a start early/finish late timetable to maximise the working day. One of the big advantages to customers is that this allows a bigger window for same day dispatch and next day delivery, so be sure to check cut-off times as this can give you a real USP for your sales.
While there are lots of other things to consider before opening up your product to a worldwide audience, when you come to start shipping your products overseas, it helps to partner with a fulfilment specialist who has knowledge and experience of international logistics. This will help to ensure that your deliveries are not held up by customs regulations, for example.
If you have plans to grow, you will need to scale your fulfilment too. You could buy a new warehouse, or outsource to a fulfilment partner who can grow with you. At ILG we look after customers who do a handful of orders per day right up to thousands per day and we have helped customers like Charlotte Tilbury in the beauty sector grow from the point of inception to processing almost 30,000 orders last December.
When you outsource to a fulfilment specialist like ILG, you tap into a huge team with a wealth of knowledge. Your partner can draw on their experience of shipping designations, packaging, returns procedures etc to make sure your fulfilment is management for maximum efficiency from the start. When it comes to outsourcing, everybody involved has a vested interest in your business doing well, so you can always be sure that everyone is pulling in the same direction.
Read the previous blog: When to outsource your fulfilment
Next: Key considerations when importing stock