Ecommerce - Transitioning to a Distribution Company
As an e-commerce business, determining the right time to transition to using a distribution company is crucial for sustainable growth.
Here are some key indicators suggesting it's time to outsource fulfillment:
You consistently receive a high volume of orders, making it challenging to keep up with packing and shipping efficiently.
Your delivery standards are declining, leading to late or inaccurate shipments and customer complaints. Approximately 17% of customers may not return to a store after a bad delivery experience.
You consistently struggle to meet customer expectations for fast shipping (e.g., 2-3 day delivery windows).
Your order volume is reaching a point where manual processes become unsustainable (e.g., 50-100 orders per day or 3000+ orders per month).
Costs:
Shipping costs are escalating, eroding your profit margins, and you're unable to access the bulk shipping discounts offered to larger logistics providers.
Rising fulfillment costs are disproportionately affecting your revenue.
You find yourself spending excessive time and resources on managing logistics, distracting from core business functions like marketing, product development, or customer engagement.
Scalability and Infrastructure:
You're running out of storage space in your home or current facility to accommodate growing inventory.
You lack the necessary infrastructure, technology, or expertise to manage warehousing, inventory, and fulfillment operations efficiently.
You're looking to expand into new markets or handle peak season demand but lack the resources and capacity to do so without outsourcing.
Focus and Expertise:
Logistics tasks are consuming too much of your time and effort, diverting attention from strategic growth initiatives.
You lack specialized expertise in areas like optimizing shipping routes, managing customs regulations for international expansion, or implementing advanced inventory management systems.
Benefits of partnering with a distribution company
Cost Savings: Lower shipping rates, reduced warehousing and labor costs, and access to economies of scale.
Improved Efficiency: Streamlined order processing, automated inventory management, and faster order fulfillment.
Scalability: The ability to easily adapt to changes in order volume, market demands, and business growth.
Faster Shipping & Fulfillment: Optimized shipping routes and fulfillment centers for quicker deliveries.
Access to Technology & Expertise: Benefit from advanced technologies and specialized knowledge in logistics and supply chain management.
Geographic Expansion: Reach new markets and customers more efficiently with a distributed network of warehouses.
Reduced Risk: Mitigate risks associated with market entry, product damage during transit, and overstocking.
In essence, expanding to a distribution company becomes essential when the challenges of in-house fulfillment start hindering your growth, profitability, and ability to meet customer expectations. By outsourcing, you can leverage the expertise and resources of a specialized partner to streamline operations, reduce costs, and focus on the core competencies that drive your business forward
We can store, distribute, ship, and handle the logistics completely, from start to finish. For more information about AW2’s Commercial Warehouse and Storage Service please contact Nicole Dean, General Manager, at 702.331.8201 or email nicole.dean@aceworldwide.com
Photo: Freepik