When starting a new business, one of the main factors for consideration is the costs associated with opening the venture, and the coverage of those costs by sales. Unfortunately for most new business owners, there is little to go on as far as being able to predict the amount of sales that they will have, and as a result it is a good idea to minimize costs to as low as possible during the initial stages until sales figures can provide a legitimate guideline for future sales. This can be very stressful for many entrepreneurs, as they will need to not only estimate the costs of making sales and production of the inventory, but also estimate the amount of warehouse space needed and the size of the staff that will be needed to process orders. If you under purchase warehouse space and under staff employees, the business will suffer due to poor customer experiences as it will take longer to process the orders. If you over purchase warehouse space you will be stuck with unused area that you are paying for, which can cripple a business if sales cannot sustain that expense. Luckily, the solution is here in the form of fulfillment companies.
A fulfillment company is a third-party business that utilizes software to communicate with your shopping cart system on your website or with another form of sales system. The orders placed by customers are transmitted to their staff in a warehouse that holds your inventory, and that staff is used to pull the order form the inventory, process and pack it, then arrange for transport to the customer's home. This entire process is completed by the staff of a business that is contracted, thus allowing you to not have to speculatively purchase warehouse space or estimate staff. Instead, you only pay for what you use.
The fees of fulfillment companies are based upon a warehousing charge which is calculated by the amount of space your inventory takes up, and a fee per order that is processed by the staff. The totals of these fees is generally less than if you attempted to secure your own space and staff, and also allows for growth or shrinkage as sales dictate, instead of attempting to predict the future. This allows businesses to operate virtually, selling through websites or other means and not having to utilize employees or space that they own in order to sell. Fulfillment companies are the future of business, and are changing the way sales are made.
There are literally thousands of ways to upgrade your business by including suppliers that will handle the bulk of your detail-oriented work. From SEO/SEM services to high-ticket sales closing companies, from advertising management firms to copywriters, video production firms to automated customer service follow ups, and literally thousands of other ways to have supply chain partners give you the leverage you need to scale your business without doing all the work yourself and without taking on the cost of developing and maintaining these solutions yourself.
In the coming weeks we're going to start a series of articles on the different kinds of leveraged outsourcing partnerships you can use in your business to scale your business quickly, powerfully, and profitably.