The Pros and Cons of Using a Third-Party Order Fulfillment Firm

Using a third-party order fulfillment team or organization has become increasingly popular as e-commerce expands and the world of retail changes.

16:09 25 July 2022

Using a third-party order fulfillment team or organization has become increasingly popular as e-commerce expands and the world of retail changes. Now everyone who has a product or service can sell it online. It has been advocated as a solution and answer to speedy logistics required by online shoppers and customers. They buy online and want the order with them as soon as possible, regardless of where it's coming from. So, using a professional would seem to tick all the boxes and solve this issue. This article will look at the pros and cons of third-party order fulfillment.

 

Pros

Faster:- Having a third-party product fulfillment company to handle your retail deliveries and warehousing is expected to speed up the delivery phase after an order has been made. It has to be faster simply because it is a process that the logistics company is proficient at.

 

A professional takes care of the tedious tasks:- The specific fulfillment company you choose is able to deal with the tedious administration and logistics issues that you necessarily don't want to or can’t hire additional staff to do. They are professionals in this aspect of the business and, as such, should do much better than your retail business will do at the logistics. It’s important to recognize and appreciate this before you start trying to do your own deliveries.

 

Increased flexibility:- Because they are doing deliveries as their core function, the fulfillment firm will be able to be much more flexible in terms of delivery times, dates and options for the customer to choose from. 

 

Cons

May not present well as the face of your business:- They are a third party, and as long as they deliver your goods, they will feel that they have done the job. However, delivery is much more than this; it is about customer interaction and ensuring that the product paid for is delivered as best as possible. The delivery firm is thus an extension of your brand, and yet they may not do the brand justice or even understand the brand at that. This can lead to you losing customers due to poor service.

 

Loss of control of inventory:- If the third-party distributor and logistics expert is also your warehouse solution, then you need to have state-of-the-art systems to record and monitor the inventory that they have. If not, as many retailers have seen, there is a big chance that you will lose control of your inventory.

 

Retail has changed forever based on the advances brought to the fore by e-commerce and internet shopping on social media, gaming platforms and much more. Having a third-party distribution service has been part of this process, and as increased retailers rush to get online, it is clear that the only way e-commerce will continue to grow and improve will be for online businesses to find the best ways to get their products to their customers as fast and efficiently as possible and at the lowest cost.