By: Aaron Rubin, Founder & CEO at ShipHero
Getting eCommerce products from the warehouse to the customer has become more difficult than ever. With supply chain disruptions and a sudden rise in online orders, eCommerce entrepreneurs are seeking ways to optimize their delivery processes that allow for heightened visibility and better standards of control over their inventory.
To achieve this streamlined version of shipping, some brands have brought their fulfillment operations in-house. While this can grant you more control over your products and how they’re shipped, it does come with its own costs and some degree of risk. Let’s take a look at what in-house fulfillment entails and how to know your brand is ready to meet the challenge.
What does in-house fulfillment mean?
In-house fulfillment means all facets of the eCommerce shipping process are handled internally, without the help of a third party. By switching your brand to an in-house fulfillment approach, you’ll be responsible for packaging, labeling and mailing products, as well as tracking the order and keeping your customers updated on its progress.
When should you consider in-house fulfillment?
When you’re still trying to get your business off the ground, paying a 3PL to handle your shipping can ease the financial burden associated with fulfillment, but after a while, you might see more value in having control over the process.
Before you decide to take this step, let’s look at a few considerations you should make to guarantee in-house fulfillment success.
Complex Products or Packaging
Most 3PLs and full service fulfillment providers have a standardized process for packaging and shipping their products. If your brand comes with complex packaging requirements, or if your products are especially fragile, managing fulfillment yourself might be a good idea.
This way, you can rest assured that customers receive their orders intact, with the appropriate packaging that provides the intended brand experience.
A relatively low order volume makes it much easier to handle some aspects of fulfillment, like inventory management, on your own. Depending on the size of your warehouse and the available bandwidth of your staff, it might not be worth paying a 3PL to take control of your shipping.
However, if you’re looking to expand your product line or customer base, in-house fulfillment might not be sustainable. As your sales numbers increase, so will the amount of space, inventory and labor required to make a shipment. If you’re anticipating growth, paying for a full service fulfillment provider might be the best way to help your eCommerce brand scale.
With major retailers like Amazon setting the standard for eCommerce delivery, you’ll want to make sure your fulfillment operations can keep up with customer expectations. These days, buyers expect their package to arrive within a week or less. If you can’t fulfill these orders within that time frame, it might be time to start looking for a reliable 3PL.
However, if your warehouse is located in an urban area, close to where your customers live, quick delivery becomes much more feasible. Additionally, close proximity to your customers means you can offer other fulfillment options, like in-store or curbside pickup.
How to manage in-house fulfillment
Before you move fulfillment in-house, it’s important to ensure that your brand is ready to take on the challenge. Even if the process seems optimal at the initial stages, changes in sales, technology and the supply chain can expose new issues that have the potential to impact your bottom line.
3PLs and larger fulfillment service providers are able to navigate these changes by employing a well-trained staff and utilizing scalable warehouse management software. Putting together the right team and resource pool can make the process much easier.
In-house fulfillment might seem like the best way forward, but it’s important to consider a variety of risk factors before diving in. Sure, cutting out a 3PL and handling fulfillment yourself can give you more control over the process, but doing that work yourself comes with additional costs that you’ll need to be sure you can afford.
Depending on the size of your eCommerce brand, you might need to rent additional space to store your products. Not only can renting a warehouse be expensive, but you’ll run the risk of locking yourself into a lease that could hinder your brand’s growth.
For example, if sales continue to do well, you may eventually need even more space than your rented warehouse can accommodate. Without extra room to grow, providing consistent and reliable delivery to an expanding range of customers will be a challenge.
Another major expense for in-house fulfillment is the cost of additional labor. If your eCommerce brand is doing well, your existing workforce might not have the bandwidth to move high-volume shipments day after day. Committing to in-house fulfillment also means you and your employees would have less time to manage other essential aspects of an eCommerce brand, such as marketing and sales.
With a 3PL, on the other hand, additional resources can be committed to your shipments as the business begins to grow, without piling on to your team’s existing workload.
An efficient in-house fulfillment process requires high-quality warehouse management software. In today’s eCommerce environment, simple spreadsheets and paper-based procedures just don’t cut it.
Customers expect detailed delivery updates, which requires thorough inventory management, pricing information and an efficient warehouse. All these features of fulfillment can be handled and enhanced with the right software.
While in-house fulfillment might seem like a great option right now, it’s important to remember how quickly that can change. Even positive changes like a sudden increase in sales can cause trouble for eCommerce brands that use in-house fulfillment with a finite amount of storage space and labor.
To get the most out of your in-house fulfillment process, it’s essential to find resources that are ready to scale along with your brand. ShipHero’s warehouse management software could provide the flexible and customizable solution you need.
If you’re looking for a partner to help your eCommerce scale to new heights, contact the Software Experts at ShipHero today.
Click HERE to Schedule a Meeting Today
Aaron Rubin, Founder & CEO
About the author: Aaron Rubin is the Founder & CEO of ShipHero. He is responsible for planning and executing the overall vision and strategy of the organization. Rubin’s greatest strengths are leadership, change management, strategic planning and a passion for progression. He is known for having his finger on the pulse of ShipHero’s major initiatives, his entrepreneurial spirit, and keen business acumen. His leadership of ShipHero is grounded in providing excellent customer service that drives improved business operations. His passion for ShipHero comes from the culture and his ability to have an impact on the lives of employees, customers, partners, and investors.