Using external logistics services: When does it make sense?
Logistics plays a crucial role in dynamically developing e-commerce, and its value in Poland is expected to increase to PLN 4 billion by 2025. No wonder that more and more e-commerce managers decide to outsource logistics services. This provides many benefits, such as time and cost savings, more effortless scalability, and access to modern technologies. As a result, customer satisfaction increases, translating into a higher conversion rate and increased loyalty.
In this article, we will discuss the detailed benefits of logistics outsourcing, present situations in which it is profitable, present modern solutions in this field, and share tips on choosing a logistics company. Let’s roll.
Benefits of outsourcing logistics
Logistics outsourcing is a strategic solution that can benefit e-commerce managers. Saving time and costs is just one of many arguments for choosing this solution. Other benefits include access to modern technologies, scalability, flexibility, and increased customer satisfaction.
A third-party logistics company has the infrastructure, experience, and resources necessary to manage the warehouse, order picking, and shipping effectively. This allows e-commerce managers to focus on the company’s strategic development rather than being involved in day-to-day logistics management.
Understanding that we are dealing with an effectively operating logistics partner is worth looking at the elements that make it competitive. This includes transparency in providing customers with detailed information about prices, services, and processes. That is why OEX Fulfilio speaks openly about the services it offers and its components. In direct contact with the product manager, the client talks about prices and processes, which are primarily tailored to the expectations of a given business.
An essential feature that proves a given logistics company is a good choice as a partner is providing evidence of its market experience. We are talking here about well-presented and carefully prepared case studies, recommendations from satisfied customers, or certificates obtained from reliable bodies assessing the activities of a given logistics company.
The success of the logistics partner is also supported by well-managed warehouses, supported by state-of-the-art logistics systems. Thanks to them, order processing can be a factor that makes a given company stand out from the competition. At the same time, it also affects the scalability of logistics services. Through a flexible approach to the customer, the logistics company can freely adjust offers to the customer’s changing needs while maintaining complete transparency of all logistics processes.
Moreover, logistics outsourcing makes it easier to adjust infrastructure and resources to changing sales dynamics. As a result, online stores can flexibly respond to increases and decreases in orders without investing in warehouse infrastructure and transport fleet.
What should you avoid when choosing a logistics partner?
First, it is alarming that prices are lowered at all costs, as this may mean low quality of services. It is also worth taking a look at the infrastructure of a given logistics company. Lack of knowledge about how it works in cooperation with online stores should raise doubts. If a logistics partner avoids providing information about the IT systems, it may also question whether it uses modern warehouse and shipment management tools.
However, considering the above advantages and aspects that should be considered when choosing the right logistics partner, it is necessary to understand how such cooperation can affect all processes and aspects of e-commerce activities.
It’s essential to learn that the impact of time and cost savings is reflected in increased productivity. By outsourcing logistics activities to an external company, e-commerce employees can focus on crucial company tasks and thus ensure better customer service by, for example, shortening delivery times. E-commerce companies cooperating with outsourcing logistics services have more time and funds to invest in their development, indirectly increasing their chances of success in the dynamically developing market.
When is it worth using logistics outsourcing?
Outsourcing logistics services is especially recommended when e-commerce focuses on a rapid increase in sales or when shipments are increasing. Then, managers decide to look for and cooperate with an external partner.
According to the report “Logistics outsourcing in e-commerce 2023,” more than half of online stores experienced a sharp increase in sales, which was not always accompanied by a well-prepared and managed warehouse and logistics. By employing outsourcing logistics services, it is possible to completely avoid problems with handling large numbers of orders and ensure smooth deliveries.
Seasonal orders
Another factor that online stores face is the seasonality of orders. It’s not only about the famous Black Friday, but primarily, this type of sale is typical for stores offering seasonal products (e.g., accessories for holidays, summer gadgets, gardening, etc.). In their case, logistics outsourcing makes it easier to adapt the infrastructure to changing sales dynamics. This also directly impacts increasing customer satisfaction when shipments are delivered on time.
Warehouse or transport fleet
For stores that do not have their own warehouse or transport fleet, the lack of appropriate infrastructure may affect sales and the ability to gain customer trust. Joining the elite group of online stores using outsourcing means that problems with parcel delivery logistics practically disappear. OEX Fulfilio has many years of experience in providing logistics services to stores without a warehouse or logistics fleet. Such clients can count on solutions tailored to their capabilities and support and strategically tailor the best services to their needs.
Strategic development focus
Focusing on strategic development is crucial to the success of e-commerce. Because online stores use outsourcing logistics services, e-commerce managers can focus on areas that are key to the company’s development. These include marketing, sales, or product development. It is estimated that 95% of e-commerce managers who use this type of solution spend their valuable time on strategic activities for the business and entrust logistics tasks to a proven partner. This is especially true when an online store plans to expand into a new market. Suppose you need to gain experience in logistics management. In that case, outsourcing is also an excellent choice for reducing the costs of such services and the need for access to modern technologies.
Modern solutions in logistics outsourcing
Let’s take a closer look at modern solutions that support logistics outsourcing. These include, among others, fulfillment, dropshipping, cross-docking, and automation of logistics processes and allow online stores to:
- Reducing logistics costs
- Increased efficiency and accuracy
- Faster order fulfillment
- Higher level of customer satisfaction
Fulfillment
Fulfillment as a comprehensive service, including warehousing, picking, packing, and shipping orders, is an ideal solution for online stores focusing on strategic development and sales rather than logistics management.
When looking for a suitable partner that outsources fulfillment services, it is worth paying attention to whether it offers:
- Modern warehouses located at strategic points on the map of a given country
- Automation of warehouse processes
- Integration with e-commerce platforms
- Fast and hassle-free shipping of orders
- Full control over inventory
Dropshipping
Dropshipping is perfect when the online store does not have its warehouse and orders are sent directly by the manufacturer or wholesaler. This is a good solution for stores that want to start operations without investing in warehouse infrastructure.
For this logistics model, OEX Fulfilio offers tailor-made solutions that include:
- A wide selection of products from reliable suppliers
- Automation of the shipping process
- Possibility of branding shipments
- Full control over orders
Cross-docking
Cross-docking is a logistics system involving the direct reloading of goods from the warehouse to means of transport without storing them in the warehouse. It is an ideal solution for stores that want to minimize order processing time and reduce storage costs.
As part of cross-docking, customers can count on:
- Fast and efficient reloading of goods
- Possibility of integration with WMS systems
- Full control over inventory
Automation of logistics processes
Automating logistics processes involves implementing robots and automation systems that improve order-picking and shipping. This allows you to increase efficiency, accuracy, and costs.
What does this logistics model provide? Above all:
- Possibility to use robots to complete orders
- Automatic packaging systems
- Sorting systems
To sum up, using modern logistics models provided by outsourcing allows you to focus on essential aspects of strategic development and sales while reducing logistics costs. From the end customer’s point of view, faster order fulfillment is a crucial element that increases his level of satisfaction.
Roll-up
Outsourcing logistics services is an effective solution for e-commerce managers who want to optimize logistics processes. By cooperating with an outsourcing company, those looking for opportunities to reduce costs can find solutions tailored to their expectations.
Lifting some or all of the responsibilities related to logistics services to a company such as OEX Fulfilio means you can focus on the strategic development of your e-commerce. Choose flexibility, scalability, and high-quality order processing. Contact us if you are looking for such solutions for your business.
