You’ve learned from experience as a growing business that initial logistics woes are manageable at the beginning. As your brand grows and sales increase, you may find yourself scaling your business to meet global demands.
Using outsourcing shipping tactics from Fortune 500 companies is beneficial so you can spend more time channeling your efforts to your strengths: sales.
Let’s explore three ways your business can benefit globally from outsourcing your warehousing and shipping.
1. Reach farflung markets and customers
It used to be only the big brands had the world-class logistics management needed to enter international markets. No more. Today, ecommerce companies of all sizes benefit from the convenience of intelligent online logistics and fulfillment services. Easy access to such fulfillment services has leveled the playing field for businesses, just as shopping cart software did for ecommerce and the Internet for global accessibility.
A company whose products are manufactured and shipped out of North America might consider the Asian market beyond reach. However, using a logistics provider with a warehouse at a shipping hub in Asia makes infiltrating the market far less risky. That opens up the potential of tapping into an additional customer base in a nearby country, such as Australia.
English-speaking consumers live all over the world, with native-English speakers in strong economies like Australia where the ecommerce market exceeds $12 billion and is underserved. In cases where internationalizing your product line (translating packaging, etc.) is a challenge, working with a fulfillment partner allows market testing without making huge investments.
2. Reduce customs hassles for international shipments
Sending packages to international customers is tedious, at best. Often, it's a logistical nightmare. Lost shipments, lack of tracking ability, brokerage fees and the unpredictability of delivery times make shipping to customers in other countries a difficult task.
As with most business processes, doing things in bulk is more beneficial than not. Sending a large shipment of products through the border once, and dealing with customs and duties without bothering customers about it, is infinitely beneficial.
Enter outsourced fulfillment. Outsourcing your shipping and fulfillment, especially with a cloud-based service, means that you send the shipment, and pay the brokerage fees, only once. Typically, the first shipment of goods is sent to the warehouse of a fulfillment company. With customs forms filled out properly, the process is handled faster and there are fewer risks of delay. Once the product arrives in the warehouse, it is inventoried and ready to be sent to customers. Then, when a sale comes in from a customer in that country, the product can be sent directly from that warehouse.
The benefits are significant. The unpredictability of customs delays is eliminated, which lowers return rates and increases your margins. Furthermore, shipping costs are lower, allowing a merchant to compete in the country of choice where they otherwise could not.
3. Cut costs by storing inventory around the world
Expanding a warehouse or distribution network is necessary as a company grows but, even for a company with several warehouses, adding more incurs high costs for purchasing, refitting and staffing. There are options that lower the costs while garnering all the benefits.
A fulfillment house increases your coverage, both domestic and international, thereby lowering shipping costs to customers and increasing the viability of a product in any given market. The available storage for inventory is increased, which especially helps with high-growth enterprises and during high-volume sales periods like holidays. These increases happen inevitably, every year. The trick to cutting shipping costs is storing inventory closer to your buyers and using the couriers’ last-mile services less often.
A new addition to the distribution network can be done in increasingly high-risk markets because the costs associated with entering said markets is so much lower. This makes a firm more versatile and agile, capable of expanding rapidly to test new markets but retaining the ability to withdraw just as readily. The biggest advantage, however, is that the aforementioned benefits are gained at a much lower investment cost than opening up a new warehouse by oneself.
Outsourcing fulfillment keeps shipping local even when your business goes global. In this economy, it’s important to handle fluctuating sales volume without skipping a beat. Knowing the right balance of what to focus on and what to outsource defines a successful and efficient operation.