Businesses With Flexibility: Outsourcing, Fulfillment and Drop-shipping

When it comes to starting a new business, many owners face the same issues – tracking expenses, keeping accurate records, and performing sales and marketing – often all at the same time.

Starting an online retail business can be even more difficult, with business owners having to guess how much inventory they should hold, how many product lines to offer, calculating shipping costs, physically labeling and shipping products, as well as handling customer service. Not to mention taking care of accounting records, paying suppliers, and other essential tasks.

Dealing with these issues can quickly add up in working hours and leave some small business owners feeling overwhelmed.

Luckily there are several options for small business owners to outsource time-consuming parts of their business, such as shipping and fulfillment, through the use of online services available at low monthly costs. Included below are some examples of services that can help to reduce the time spent each week on daily business needs.

Fulfillment by Amazon (FBA)

Fulfillment by Amazon allows you to take advantage of the services of one of the world’s largest e-commerce platforms, and target the large North American market. By shipping your inventory to an international Amazon fulfillment warehouse, each time you make a sale Amazon will pick, pack, label, and ship your orders to your customers. Multi-channel fulfillment means orders can be sent either through the Amazon platform, or through other channels such as your online store.

Customers can qualify for fast and/or free shipping through services such as Amazon Prime, and Amazon takes care of customer service and product returns, meaning fewer headaches for you and your small business.

In exchange for this service Amazon charges a service fee on each sale made, as well as low monthly storage fees. Businesses using this service must also make sure that products are properly packed and bar-coded before being shipped to Amazon.

Outsourcing shipping and labeling services

Online platforms such as Shipwire work in a similar way to Amazon FBA, revolutionising shipping through offering fulfillment and warehousing services. These services allow small businesses to not only reduce time spent on labeling and shipping products, but also expand their product offerings to overseas markets by storing products in international warehouses.

By outsourcing the likes of shipping and fulfillment through such platforms, small business owners can focus their efforts more on in-house business management, bookkeeping and accounting, as well on increasing sales.

Drop-shipping

Drop-shipping has picked up in popularity in recent years as a low-risk and easy way of starting an online retail business.

Without the need to hold physical inventory, small businesses can arrange deals with manufacturers or other retailers to ship products directly from warehouses to their customers. These businesses simply add a percentage fee or profit margin on top of the cost of the product, and place their customers orders directly with the supplier.

One downside of drop-shipping is that delivery times are typically longer than traditional shipping services, which may not be suitable for all business types.

Businesses must also make sure that their accounting and bookkeeping practices are in order, especially when dealing with international businesses and overseas tax rates, to accurately track expenses and revenue.

These are just some of the ways that online retail businesses can work with these new revolutionary services to reduce the time spent on shipping products and customer service, and focus more on the smooth running of their business.

To find out about other ways to improve your small business, give our friendly team at Scott Partners a call to schedule an appointment. We can give you professional, clear advice and help your business grow now and in the future.