How many roles are too many for the average startup founder? If you ask these leaders, they’ll typically tell you they crossed that threshold about a dozen responsibilities ago. Why then, are they so often resistant to easing their burden by outsourcing aspects of their business?
If you’re a startup owner yourself, does the prospect of outsourcing send a chill down your spine too?
The good news is that you don’t have to be afraid because outsourcing has the potential to provide a significant benefit to your business. You can save money and make customers happier if you find the right partner.
So, let’s look at where you can benefit and get a head start on your outsourcing efforts and vendor shortlists.
Does Your Stuff Fit?
Warehouses have a large set of fixed costs for rent, but also varying costs around labor, equipment, and utilities. If you plan on expanding — a good sign for your sales — these expenses can rise significantly.
For startups that are experiencing high sales or those with wide variations based on season or weather, outsourcing fulfillment and warehousing can be an effective way to control costs.
When you own or rent a warehouse, you pay a standard price. It’s the same when sales are down, and you don’t want to carry a lot of inventory, or when you grow big enough that things don’t fit on your shelves. Outsourcing allows you to rent shelf space that can grow or shrink as you need it — with costs growing and shrinking too.
What many startups don’t think about is the equipment and team you need to pick, pack, fill, and ship orders adjust with order demand too. To prevent hiring too many people or running out of equipment and packing materials, you can outsource and simply pay for what you need at any given moment, all without having to worry about managing the day-to-day.
Can You Meet Customer Demands?
Satisfied customers are a must for a startup to survive. One of the best times for you to consider outsourcing is when fulfillment gets in the way of satisfying your base.
If you’re struggling with incorrect orders or late shipments, you might be experiencing warehouse issues related to staff, space, or inventory. It’s hard to control these when you’re also focused on running a business.
An outsourcing partner can help solve your issues and even guarantee some changes. Most will make promises around order accuracy and speed, plus they can integrate with your order software to minimize mistakes. The ecommerce boom has created many new fulfillment businesses and supply chain partners, meaning it is now easy to find fulfillment companies who will pay you if there’s an error with an order.
Are Costs Scaling Uncontrollably?
Startups face many cost barriers to business growth and longevity. You may need to adjust a manufacturing process or partner, meet changes to regulations in your region, or experience new demands from additional suppliers or sales channels. Every step has a potential cost.
At the same time, growing your business comes with increases in labor for every touchpoint. The warehouse needs more staff to unpack inventory when it arrives, store it on shelves, pick and pack orders, and get things out the door. Plus, you’ll have more maintenance needs, cleaning tasks, and HR requirements as teams grow.
All of these scale your costs as each new team member comes with a set of infrastructure, business process, and physical space requirements. Outsourcing fulfillment allows you to avoid this increase, at least in the warehouse.
Many find it more affordable to hire a partner and outsource your fulfillment than it is to increase staff as well as retain the additional leaders needed to manage a growing warehouse.
Do You Have the Staff and Software Knowledge?
Does your business have what it needs right now to get orders out on-time and accurate? If not, do you know what’s the best solution, such as staff or software, to implement to set things right?
Fulfillment and supply chain issues are a tough part of any sales business. You’ve got to manage vendors, check goods as it arrives, pack and verify orders, and work with carriers to get products to customers at the right speed and a cost you can afford. There are many moving parts and requirements at each step.
Fulfillment outsourcing companies take this load off of you. They’re also experts in knowing the best way to solve your current fulfillment challenges. So, they have the right technology, teams, and processes to keep your business running smoothly.
You’ll also get some insights into your own operations that might help. This might include learning the right inventory levels and minimums, so you’re only restocking to meet expected orders, not ordering too much that you need to pay to store or waiting too long and losing sales due to stockouts.
Treat fulfillment as a part of your business that can be optimized. If you have the expertise or the time to do it yourself, then operations will thrive under your leadership. If you need help, getting it can remove barriers to customer satisfaction while enabling you to focus on sales and grow your business for the long-term.