Blog Posts 3 Outsourcing Solutions to Help Control Fulfillment Costs
Key Takeaways
- Along with an increase in ecommerce order volume, many retailers and brands are seeing a significant rise in fulfillment costs.
- Space and labor are two of the biggest fulfillment expenses.
- A third-party logistics provider (3PL) often can help to control these costs.
If your ecommerce order volume increased exponentially in the wake of the COVID-19 pandemic, chances are, you are also experiencing higher order fulfillment costs.
What is causing the increase, and how can a third-party logistics provider (3PL) help? Saddle Creek’s new ebook examines those questions and many more. Following is an excerpt from The Complete Guide to Ecommerce Fulfillment Outsourcing…
Fulfillment Challenge: Increasing Costs
Picking, packing and shipping ecommerce orders is a resource-intensive process. Ecommerce fulfillment operations require two to three times the labor and three times the space as traditional warehousing operations.
Competition for these resources drives costs up. Over the past five years, rent for light-industrial warehouse space has increased 30%. Labor costs also have increased.
The pandemic has only served to compound the problem. Additional labor needs and improvements to accommodate growing ecommerce order volume have increased D2C fulfillment costs by as much as 5% to 15%.
“Order fulfillment can take a toll on operational budgets. Costs for warehouse space, labor and shipping add up, particularly when online sales volume increases.”
— Mike Jennison, Vice President, Supply Chain Engineering, Saddle Creek Logistics Services
Outsourcing Solutions
MAXIMIZE DISTRIBUTION CENTER CAPACITY
An experienced 3PL can offer layout and storage solutions to increase efficiency and optimize capacity – higher ceiling heights, narrow aisles, efficient racking systems and more.
REDUCE OVERHEAD
With a shared-space 3PL environment, retailers and brands only pay for what they use. They have access to flexible resources without the associated overhead investment.
INCREASE EFFICIENCY
To reduce labor needs, a 3PL can optimize processes and invest in automated fulfillment solutions that increase productivity (i.e., pick-to-light, powered conveyors, robotics).
To learn how outsourcing can help to address five more ecommerce fulfillment challenges, read the ebook.
Topics: Selling online, Reducing costs, Labor management, COVID-19
