When you’re a startup thinking about how to set up your logistics and prepare for future growth phases, there are several options: you could buy or rent your own warehouse. For many startups, however, that’s too expensive and not flexible enough.
That’s why another option makes sense for many: an external fulfillment partner. It offers a complete solution for your entire fulfillment. In other words, the partner takes care of storage, picking, packing and shipping, as well as returns management. The connection is usually made directly via your shop system, e.g. Shopify. We’d like to give you an overview of the pros and cons and clarify what you should look out for:
Advantages of a fulfillment partner
- Focus on your core business: Especially for small companies where the founders take care of everything themselves, a fulfillment partner often lightens the load, since managing your own warehouse takes a lot of effort. In some cases, a growing shipping volume simply can’t be managed in-house any more.
- Turning fixed costs into variable costs: Static costs such as warehouse rent disappear; instead, you only pay for the storage space you actually need at the moment.
- Flexibility as you grow: Even if you need more storage space, a fulfillment partner can provide it without any problems. This makes a fulfillment service provider a very good fit for growth phases too.
- Experience and expertise: Thanks to its experience, a fulfillment partner can find efficient logistics solutions and help you save costs.
- Lower shipping costs: Fulfillment service providers often get better shipping rates from carriers.
Disadvantages of a fulfillment partner
- Dependence on the fulfillment partner: You become highly dependent on the fulfillment partner; your fulfillment processes, their efficiency and their costs depend on your fulfillment partner’s competence.
- Finding a suitable fulfillment partner: It can be hard work to find a fulfillment partner that meets your requirements. Below, we’ve put together a list of important criteria.
So a fulfillment partner can help growing companies in particular thanks to its flexibility, but other companies can benefit too. Once you’ve decided to work with a fulfillment service provider, the most sensible first step is to get a non-binding quote so you can plan your pricing. Beyond that, you should pay attention to a few things:
What should you look for when choosing a fulfillment partner?
- Can the partner meet your individual requirements? e.g. special packaging or refrigeration of products
- Is the service provider a good fit for your brand? e.g. in terms of quality/sustainability
- Are there hidden costs? e.g. fixed monthly fees; this doesn’t necessarily have to be more expensive, but you should have full transparency on all costs
- How long are the contract terms?
- Is there a personal contact? Communication is the key to a good working relationship, so individual advice is important.
Conclusion
A fulfillment partner offers many advantages – what matters is that you get a solution that fits your company. Personal contact is important for that. First, you should know the approximate prices; you can get a free, non-binding quote here: Fulfillment price configurator: calculate your costs online with ease | fultastic
