There was a time when achieving sales was all about the product. If the product offered what the consumer wanted (at a realistic price point) then sales were good. A trip to, dare I say, the actual High Street may have resulted in disappointment if said product was out of stock. However, reassurance it would be back in next week would have saved the day. There was a time when this was enough and numerous families would not question travelling back the following week to collect the much-anticipated item.
This isn’t so in today’s age. The bustling high streets have been sacrificed by the masses in preference of online shopping from the comfort of their own homes. This issue has only been compounded by the increasingly speedy delivery services often available – same day in some cases.
The internet has allowed for a breed of companies that ‘do order fulfillment well’ as consumers continue to prove the ease of purchase is just as (if not more) important than the product itself.
Picture this, there are two companies listing a similar product for sale on their respective websites. Although both look similar, the reviews for one clearly outweigh the other. At this point the vast majority of people decide to purchase the item with the better reviews. However, at the checkout stage it’s highlighted this item’s out of stock or only available with a standard delivery of 5-7 days. While this may be OK for some, for many it’s not – owing to the progression in eCommerce and the underlying expectation that everything is now accessible at our fingertips. As a result, in this scenario the arguably ‘better’ product is often side-lined as the order fulfillment process is not deemed quick enough by the consumer.
If both products have similar order profiles then the playing field is still even. However, in the struggle to gain competitive advantage it’s always advantageous to be that company offering the best eCommerce fulfillment solution. Unfairly, this company may not be the one with the better product but if demand exists to have that item quickly then that may not matter.
This reality hasn’t gone unnoticed in the retail environment and, whilst some choose to devote an arm of their business to fulfilling their own orders, others choose to utilise 3rd Party Fulfillment Centres (like ours). These Centres are highly skilled in providing warehousing and distribution because of their advanced warehouse management system and trained workforce. The result is a seamless solution in an area usually considered an afterthought.
THE BUSINESS TO BUSINESS SECTOR IS NO DIFFERENT…
The requirement for consistency with stock inventory and order management is not limited to business to consumer sales. A number of our clients utilise our facility to ensure a smooth supply chain into their own production runs (good examples being clients Quorn Foods and Tata Global Beverages). Here, ensuring consistency throughout the supply chain is essential and our warehouse management system allows for this. It is easily understood why these companies hold raw ingredients destined for the production run when you consider the absence of an ingredient (once at the production run stage) can result in an operational shut down. A closure like this is so costly it is not even scheduled to happen on Christmas Day!
Another interesting example are clients Typhoon International who are the world’s leading manufacturer of dry-suits, supplying the MOD and local distributors alike. For them we currently store finished products and distribute to their approved suppliers. Predictably, their stock movements tend to be extremely seasonal. For us, this is easy to resource since members of staff from other areas of the business can be drawn upon as and when required. However, the seasonal demand would be challenging to resource for this business if they looked to take the operation ‘in-house’ and inevitable inefficiencies would exist.
Ultimately there can be many reasons why a company decides 3rd Party Fulfillment has benefit to their business and this reasoning tends to vary slightly from business to business. However, one thing’s for sure – the age for heightened supply chain efficiency is upon us and the most cost-effective solution for most is to outsource.
If you would like to learn more about how InBond could assist with your business requirements then please do not hesitate to contact us.