{"id":13607,"date":"2022-08-10T19:55:42","date_gmt":"2022-08-10T19:55:42","guid":{"rendered":"https:\/\/www.whichwarehouse.com\/blog\/?p=13607"},"modified":"2022-08-10T20:04:01","modified_gmt":"2022-08-10T20:04:01","slug":"post-pandemic-ecommerce-fulfilment-route-maximise-profits","status":"publish","type":"post","link":"https:\/\/www.whichwarehouse.com\/blog\/news\/post-pandemic-ecommerce-fulfilment-route-maximise-profits\/","title":{"rendered":"Post Pandemic ecommerce fulfilment – which route will maximise your profits?"},"content":{"rendered":"

\u201cWe are all ecommerce businesses now.\u201d Well, maybe not all of us, but most businesses are now – to some extent – learning how to accommodate the demands of e-commerce: eBay and Amazon might have led the way but the pandemic drove every possible business in the direction of ecommerce and many are finding that they can\u2019t, or don\u2019t want to, reverse the process.<\/p>\n

 <\/p>\n

Ecommerce fulfilment defined<\/strong><\/h2>\n

 <\/p>\n

In a nutshell, e-commerce fulfilment is the process of receiving an order over the internet and delivering it to your customer efficiently. The various stages of this process all up to fulfilment services, and they are always seen as being attached to the vendor, regardless of whether or not the vendor actually undertakes the fulfilment themselves or outsources it. For some organisations this is the \u201cShopify\u201d process, and certainly it\u2019s true that Shopify has an inbuilt fulfilment centre network, although it\u2019s also important to know that if you\u2019re using Shopify you can also opt out of that process and use Shopify as your front end whilst choosing another option for your back office e-commerce fulfilment. But which of the three available options is most likely to maximise profits for your business?<\/p>\n

 <\/p>\n

Self-Fulfilment (in-house fulfilment\/direct fulfilment)<\/strong><\/h3>\n

 <\/p>\n

\"fulfilment<\/a><\/p>\n

It has many names, but it\u2019s the simplest process for many of us to understand, because it\u2019s what we\u2019ve always known. Self-fulfilment is where you don\u2019t just have direct control over what\u2019s in your shopfront, but the whole process from order receipt, pick and pack, and logistics.<\/p>\n

 <\/p>\n

Pros of self-fulfilment<\/em><\/p>\n

 <\/p>\n

    \n
  1. Complete control – having oversight of the complete process means that you get to find tune your delivery processes as your business evolves.<\/li>\n
  2. Customisation – not only can you ensure your branding is consistent across everything you send out, but you can customise the process – so for example, you can reward repeat orders with a little gift or extra item, or tailor your packaging to reflect your specific business – there are organisations that use different packaging to celebrate cultural events or even personalised stickers to show who packaged each order.<\/li>\n
  3. Cost-saving – for companies that will always remain small or those that are very new eCommerce organisations, not having to pay for third party pick and pack can be a useful way of managing cashflow.<\/li>\n<\/ol>\n

     <\/p>\n

    Cons of self-fulfilment<\/em><\/p>\n

     <\/p>\n

      \n
    1. High original outlay – renting warehouse space and covering the overheads of extra staff to manage self-fulfilment, especially if you\u2019re seasonal, can be a huge demand.<\/li>\n
    2. Time drain – managing self-fulfilment is often tedious; not only does it take time to organise a good fulfilment service, but when something goes wrong, it can take a lot of time to straighten out the issue<\/li>\n
    3. Labour intensive – linked to the previous point, the requirement to cover the demands of e-commerce fulfilment can be labour intensive – and that can both increase your staff levels and restrict your organisation\u2019s ability to grow<\/li>\n
    4. Knowledge shortfalls – we might all be ecommerce organisations now, but being an international fulfilment provider can be extra-demanding; because the expertise required to import and export and to manage last mile logistics worldwide is a high cost in terms of expenditure and the time required to master a learning curve.<\/li>\n
    5. Product limitations – for a mid-sized organisation, being limited to selling only what they can purchase and warehouse in their own facilities can be a brake on growth.<\/li>\n<\/ol>\n

      <\/h3>\n

      Dropshipping<\/strong><\/h3>\n

       <\/p>\n

      At the opposite end of the scale to self-fulfilment is drop-shipping. It\u2019s often defined as a hands-off strategy, and it requires minimal facilities. Essentially this process is one where the vendor holds no stock, it just accepts orders, buys them from a third party (who may be a manufacturer or wholesaler) and then uses that partner to fulfil the order.<\/p>\n

       <\/p>\n

      Pros of drop-shipping<\/em><\/p>\n

       <\/p>\n

        \n
      1. Minimal capital outlay – no need to invest in a stockpile of inventory nor to pay overhead to warehouse stock.<\/li>\n
      2. Low inventory cost – there\u2019s no incurring obsolete inventory and no paying for members of staff to stand around while you wait for orders to come in, so they can pick and pack.<\/li>\n
      3. Simple start-up – creating an e-commerce shopfront and taking orders can be done in a day<\/li>\n
      4. Flexibility – highly appealing to the individual entrepreneur, this process can be fitted into your free hours, and managed from anywhere in the world.<\/li>\n
      5. Growth potential – an entrepreneur can test and retain or drop products without risk, because there\u2019s no back inventory to dispose of if something doesn\u2019t sell well.<\/li>\n<\/ol>\n

         <\/p>\n

        Cons of dropshipping<\/em><\/p>\n

         <\/p>\n

          \n
        1. Lack of control – from the moment the order is place, you\u2019re putting the product, and your reputation, in the hands of the partner who is handling fulfilment – if something is out of stock, damaged, or arrives late, it\u2019s your neck on the line, not theirs<\/li>\n
        2. Complex costing structure – most e-commerce organisations using the drop ship method soon find they are working with multiple partners; this means that there are varying costs, a range of time-frames and different communication processes for each partner. That can get time-consuming.<\/li>\n
        3. Limited branding, no personal touches – most dropship suppliers don\u2019t add personalised processes such as branding, incentive vouchers or other brand specific details to their offer.<\/li>\n
        4. Less profitability – the \u2018hidden\u2019 cost of drop-shipping is that you don\u2019t get bulk or wholesale pricing deals, so you pay one off prices for each order, as a result there\u2019s less profit than if the company owned its own product lines.<\/li>\n
        5. Inability to solve problems – without control of any part of the process except the shopfront, an organisation can only report problems with ecommerce fulfilment, not resolve them.<\/li>\n<\/ol>\n

          <\/h3>\n

          Outsourced Third-Party Fulfilment (3PL\/TPL)<\/strong><\/h3>\n

           <\/p>\n

          A hybrid of the two previous processes: self-fulfilment and dropshipping, this may offer the best route for a range of organisations but is especially useful for mid-sized companies looking to grow and expand.<\/p>\n


          \nPros of outsourced third party fulfilment<\/em><\/p>\n

           <\/p>\n

            \n
          1. Lower costs – there\u2019s no need for warehousing, or personal to pick and pack because orders are outsourced.<\/li>\n
          2. Discounts – where organisations have a high number of deliveries, or regional or local customer bases, they are able to negotiate discounts with their 3PL in a way that isn\u2019t possible when drop-shipping.<\/li>\n
          3. Ease of fulfilment – there\u2019s much more scope to assess the performance of an outsourced third party through reviews and other clients, so this makes it easier to find and work with professionals<\/li>\n
          4. Specialisation – choosing the right 3PL<\/a> means that you have seasoned professionals in charge of complex processes such as international shipping, customs etc.<\/li>\n<\/ol>\n


            \nCons of 3PL<\/em><\/p>\n

             <\/p>\n

              \n
            1. Branding – while there\u2019s much more scope for branding with a 3PL, it will cost more and can\u2019t be as personalised as in-house fulfilment<\/li>\n
            2. Lack of data – one of the benefits of in-house fulfilment is getting information that gives you control over your purchasing. TPL gives you more information than drop-shipping but it also requires more information than that process. Working with a partner who offers good data on<\/li>\n
            3. deliveries, inventory levels, incoming goods and logistics can help.<\/li>\n
            4. Upfront research time – finding the right third-party fulfilment partner can be time-intensive<\/li>\n<\/ol>\n

               <\/p>\n

               <\/p>\n","protected":false},"excerpt":{"rendered":"

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