Outsourcing vs. Insourcing Fulfilment – The Key Benefits for your Business

Choosing your order fulfilment options can be one of the most important decisions you make as a business owner. 

Typically business owners will fulfil their own orders until such a time as the business has grown exponentially and they feel it is of adequate size to outsource that process. However, nowadays there are so many fulfilment options available that it is possible to justify outsourcing early on. 

E-commerce is growing year on year, even a worldwide pandemic couldn’t slow it down, so there are more opportunities to grow a business online than ever before. So with that in mind it is important to consider whether insourcing or outsourcing is right for you and the growth of your company.

Common Misconceptions on Outsourcing 

There are so many small businesses out there today, the internet has offered the opportunity to so many to create a business from a craft, a service, or buying and selling online. Many of these small businesses are still under the assumption that fulfilment services are not made for them, unless their business grows at a rate of knots. 

It is true that many fulfilment providers will insist upon large volumes of orders and other particulars in order to offer their services, however there are now new providers who are willing to help businesses operating on a smaller scale.

It is worth researching fulfilment providers to see which will suit your business. It really is a chicken or egg situation as although you may feel too small to justify the outsourcing, the outsourcing may just be the key to growing your business.

Common Misconceptions on Insourcing

As a business owner, there is no doubt that you may feel as though no-one can do better than you and to outsource would not be adding any value to your hard earned business. However, for many sellers, insourcing isn’t the best option financially as there often isn’t enough leeway to achieve the same margins as an outsourced arrangement. 

Insourcing also takes up a large amount of time, so is carrying out the process in house really worth all the time and effort which ultimately amounts to a cost as well? It is certainly a question of weighing up the pros and cons of cost and opportunity for growth. 

There are many things you may be missing if you choose to insource, are there markets you aren’t reaching? Are there products you cannot source? Are there missed opportunities and new channels you could be selling through? Insourcing may free up some cost or offer slightly larger margins, however the opportunity that outsourcing could provide is invaluable.

Reasons to Outsource

Managing order fulfilment is an operation in itself, it is time consuming and really could do with a certain level of expertise in order to carry it out efficiently. 

When you start to see considerable growth for your business, the process of order fulfillment will only become more and more complex. There will undoubtedly be limits to the amount of orders you can fulfil due to staff, physical space for orders out and storage for holding stock. Therefore you will soon find yourself increasing your team and your storage space, at a cost. 

If you are shipping internationally then you will need to adjust your strategies to cater to multiple different service options and research couriers in each country you ship to. Fulfilment is also now a seven days a week job, so in order to keep weekends free it may be helpful to hand over the process to the experts. 

Reasons to Insource

It may feel easier in the beginning to manage every aspect of your business yourself, however there are also many things to consider within this. As third party couriers become more accessible and increasingly cheaper, the service provided may become a little more unreliable. 

There is of course some things that outsourcing cannot provide and one of those things is customised packaging and personalisation. For example with the rise of Etsy and Handmade stores, many business owners are keen to include hand written notes and a certain personal touch which obviously cannot be achieved through an outsourced provider.

So if customisation and that personal touch are integral to your business then perhaps insourcing would be a better option for you. However it is worth considering if there are elements you can outsource, for example if you run a recurring subscription service then presumably you don’t personalise that service, in which case you could outsource that process and potentially grow it even further.

Before choosing between outsourcing and insourcing, you have to consider the facts specific to your business and services on offer to you,  in order to understand the full options available. Outsourcing can certainly be a really effective way to grow your business further than you could manage in house. That said, it won’t always suit all retailers, especially if you are a new business specifically offering bespoke services.

Outsourcing does offer the freedom to run your business from anywhere in the world, something which is a hot topic currently due to the ongoing Coronavirus pandemic. It may give you the freedom to grow your business without the restriction of location.

If your would like to enquire about our fulfilment services, please email us.

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