Often the initial question for businesses considering outsourcing their fulfilment operations, the belief is that costs can be reduced if all business activities are kept in-house rather than outsourced to a 3rd party subcontractor…however this is not always the case.
From a control perspective it may be ideal to carry out all of your business activities in-house but in reality the expertise that a specialist fulfilment house can offer, along with the economies of scale achieved through a “multi-client” warehouse and buying power with couriers and packaging means that outsourcing can be an extremely cost-efficient way to manage your product storage and order fulfilment.
Perhaps the more appropriate question a business should ask is…are we an online retailer or a warehousing and logistics specialist?
Benefits of outsourcing fulfilment
Frees up management time:
By leaving the back-office functions to the fulfilment experts, your business can be free to concentrate on your core strengths of marketing and selling your products.
Reduced fixed costs:
‘In-house’ usually means paying fixed wages and rent regardless of how quiet or busy you are, whereas outsourcing is mainly based on Pick & Pack and Delivery and so if no order to ship then no fee to pay.
Makes shipping outside UK easier:
Would you like to expand into Europe but have no experiences or volumes to negotiate good delivery rates? Sykes ships to over 150 countries and can take care of all related customs clearance.
Allows instant scalability:
Having to compromise stock levels & lines because of limited space? The worry of how to store stock is removed by outsourcing to a large fulfilment warehouse with Sykes also removing another associated cost as all stock is insured whilst on our premises.
Cheaper delivery costs:
Sykes Post & Freight contracts are based on the spend across ALL of our clients meaning our delivery costs are cheaper than our clients can obtain themselves, plus these savings in delivery tend to cover costs for outsourcing the fulfilment operation.
Improved customer experience:
Do you recruit temp staff to help with periodic surges in demand? Have you experienced this causing quality issues or even stock shrinkage due to petty theft or pick errors? Sykes do not employ temps and so by outsourcing you will benefit from a well trained and loyal workforce.