5 Signs It’s Time to Start Thinking About Centralized Fulfillment

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Ecommerce order fulfillment is one of the most critical aspects of ecommerce. It is all well and good to get plenty of online orders. But if those orders cannot be fulfilled in a timely and cost-efficient way, the business will not survive. That’s why there comes a time when every growing ecommerce enterprise needs to start thinking about centralized fulfillment.

Centralized fulfillment is a strategy of having all your inventory delivered to, and stored at, a central location. Staff at that location handle picking, packing, and shipping merchandise. Centralized fulfillment is usually an outsourced service provided by an experienced shipping contractor like Preferred Shipping & Handling of Texas.

Are you an ecommerce operator enjoying steady growth? If so, note the following five signs that it is time to start thinking about centralized fulfillment. If you recognize two or more of them as already impacting your business, now might be the time to move.

1. You’re Running Out of Space

Growing ecommerce operations need larger amounts of space to store inventory. That is just common sense. If it looks like your company is outgrowing the space it currently occupies, you have a couple of options. The first is to move to a larger location with more warehouse storage. Your second option is to consider centralized fulfillment instead.

A centralized fulfillment partner provides the necessary warehouse space. Your company doesn’t have to move. You do not have to sign an extended multi-year lease on a bigger property.

2. You’re Having Trouble Tracking Inventory

With ecommerce growth comes more inventory. As your inventory grows, keeping track of it becomes more of a challenge. You may not have the labor or technology tools to track inventory accurately. If so, your company is in a dangerous position. Not tracking inventory accurately is an open door to potential losses. Centralized fulfillment addresses inventory tracking through the latest technologies and onsite staff that handle inventory tracking for you.

3. Your Labor Costs Keep Climbing

Keeping order fulfillment in-house requires maintaining a large enough staff to get the work done. But as every business owner knows, labor is the most expensive part of doing business. Labor costs almost always exceed all other costs a business incurs. So how is your company doing in this regard?

If your labor costs keep climbing to the point that you do not think you will be able to cover them at some point down the road, it may be time to consider switching to a centralized fulfillment model. With centralized fulfillment, you don’t need additional staff. Your fulfillment partner handles that part. You simply pay for the service and let them worry about labor costs.

4. You Have Other Priorities

Order fulfillment is just one aspect of running a successful ecommerce operation. As the company owner, you probably have many other things to do. Some of those things may be higher priorities than fulfilling orders. Opting to switch to centralized fulfillment frees up your time so that you can focus on those other things.

5. You Are Looking to Expand

Perhaps none of the previous four circumstances apply to your business. You still may want to consider centralized fulfillment if you are planning to expand your business. Expansion can lead to all the things previously discussed. Yet centralized fulfillment can head them off. Think about it.

Centralized fulfillment is one option for managing order fulfillment in ecommerce. Under the right circumstances, switching to a centralized fulfillment model could be the best decision an ecommerce operator makes. Do yourself a favor and consider it for your own business.