The ecommerce revolution has certainly made it easier to start a company but finding success in the endeavor is quite a different matter. Make no mistake, business is still business and to succeed much of the usual business advice still applies.
One item of advice is that a company needs to constantly move forward, or it is ultimately doomed. Stagnation truly is the kiss of death for a company of any kind.
You might think that your small company can simply truck along at the current level of supply and demand, with cash flow healthy and with a pool of customers that regularly buy the same amount of products. However, proceeding like this could lead to disaster. All it takes is for one of those factors to change. Let us take the example of customer demand.
If customer demand increases but you do not take the proper action to meet the new levels of demand, then it isn’t just that you will not be able to serve the new customers – the existing ones might be lost.
This can happen because you will begin to run out of inventory, and this means that customer will be repeatedly disappointed. Moreover, some of these customers could be the same ones that were buying quite happily from you before. Either meet the new demand, therefore, or you will lose it.
This represents the danger of stagnation very well. The increased demand represents a real opportunity to grow. But if you don’t grasp it, things could go the other way – and quickly.
So, increased demand is one sure sign that it is time to expand operations. fastFACTR, an invoice factoring service out of Utah, say that having stable cash flow is another clear sign that you have the revenue – and the imperative – to expand. Another indication involves order fulfilment.
Most small companies will handle fulfilment in-house, but if the company sees any kind of success, then this model might become inadequate. It then becomes important to take a step up in order fulfilment. |for small companies, this means investing in outsourced fulfilment.
However, the indications that it is time to do this can be quite diverse and expanding too early can also be perilous. Therefore, it is important to recognize the signs it’s time to outsource fulfilment.
When to Outsource Fulfilment
Here then follows some further signs that it’s time to outsource order fulfilment:
You Want Faster Delivery
Or you need it. In ecommerce, companies need to keep up with the ecommerce giants and what their customers expect in terms of delivery. Slow delivery might be tolerated from a small company, but speedy delivery is expected from all larger ecommerce companies. Outsourced fulfilment is one way to speed things up.
You Cannot Keep Up with Order Volume
We touched on this above. When order volume becomes unmanageable, then obviously it is time to have somebody else take care of it. Disappointed customers are the only alternative.
You Want to Reach More Customers
Outsourced fulfilment can be a way to expand your company’s geographical scope and to reach more far-flung customers who occupy your niche but were previously just too far away.
Shipping Costs Are Affecting Your Profit Margin
If you are making the sales to see good profits, then great. Nevertheless, one thing that could derail this is the shipping costs when handling fulfilment in-house. The opportunities for consolidated deliveries and more professional services handling higher order volumes can actually keep costs down.
Ultimately, expansion is essential and order fulfilment requirements often supply the clearest sign that it’s time to grasp the nettle.