If you’re an online seller, you know exactly what time of year it is. The leaves are falling, Thanksgiving is around the corner – and the holiday season is about to heat up.
Hopefully, that means you’re feeling optimistic. Holiday retail sales eclipsed $1 trillion last year, meaning a potential windfall for sellers that do it right.
Unfortunately, this time of year can also create quite a bit of stress for small and mid-sized online retailers that handle order fulfillment on their own. A spike in sales comes with a spike in logistics requirements. That means inventory management, shipping, returns, exchanges, dealing with freight carriers, and a ton of other headaches.
If you’re feeling agitated around the holiday season, it’s time to ask yourself one big question: Should I go for DIY shipping again this year, or hire an eCommerce 3PL? This post will help you decide on the right answer for you.
Let’s start with some explanations and definitions.
There’s nothing inherently wrong with DIY shipping or self-fulfillment. In this model, the retailer (sometimes even a solopreneur) handles packaging, shipping and reverse logistics by him or herself. That includes everything from stocking inventory and determining shipping rates and methods to choosing packaging, calculating shipping costs and physically getting packages to the carrier with the right address.
(That’s all to say nothing of more complex situations, like restocking returns, processing exchanges, handling angry customers and shipping overseas.)
For some retailers, this model makes a ton of sense. For others, not so much. We’ll get into the differences shortly.
The other side of the coin is outsourcing fulfillment to a third-party logistics company, or 3PL. These companies handle retailers’ logistics and distribution needs semi-autonomously. Goods are stocked in the 3PL’s warehouse (or warehouses). When an order is placed, the retailer’s shopping cart software triggers the 3PL to pick, pack and ship the order. Ideally, the eCommerce seller never needs to touch any part of the distribution, warehousing and shipping cycle.
The answer to this question completely depends upon the situation.
DIY shipping offers a number of benefits, though they are primarily realized by companies with relatively small volumes (i.e., less than 1,000 packages shipped per month, or roughly 33 per day).
Outsourcing shipping to an eCommerce 3PL, meanwhile, offers its own set of value propositions. In most cases, they’re attractive to eCommerce sellers that expect a spike in orders over the holidays, or those that want to scale their businesses rapidly.
Clearly, there are positives to both sides of the coin. DIY shipping and fulfillment lets you control the process completely, deliver a self-consciously personal experience and avoid paying unnecessary costs if you’re shipping less than 33 packages or so a day. But self-fulfillment doesn’t scale well, and it might require expertise your team doesn’t have.
Conversely, a 3PL allows you to deliver a more upscale customer experience, offer benefits like free shipping and next-day delivery, and focus on your core competencies. But there is a cost to outsourcing fulfillment, and it takes some time. In fact, if you’re not working with your 3PL by Oct. 15, there’s basically no chance you’ll be ready for the holiday rush.
So when should you hire a 3PL? Outsourced fulfillment makes sense for eCommerce sellers who:
By contrast, DIY shipping is likely a fit for online retailers who:
For eCommerce sellers, there are pros and cons to both DIY shipping and hiring a 3PL. That said, with the holiday season approaching, it really comes down to one thing. Will you be able to keep up with the rush? If you’re doing it yourself, will you be able to get your customers their orders faster and cheaper than the competition? And even if you can, do you really want to?
If you’re staying small this year, DIY is probably a great fit for your needs. But if things are going to get hectic, it’s probably worth calling an experienced third-party logistics provider. You can get a fulfillment quote from us within 24 hours for services that include:
Remember, if you’re not working with a 3PL by Oct. 15, you’ll be handling this holiday season by yourself. Request an eCommerce order fulfillment quote today, and see how ShipNetwork can change your business – and your life.
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