Though often overlooked, distribution is an essential element in any business’s marketing strategy. The more distribution channels your business can access, the more chances you have to make sales and earn a profit. However, creating new channels often involves added investment and risk for your business. Fortunately, there is one strategy you can use to easily open more channels without additional overhead costs or added risk: order fulfillment services.
What is an Order Fulfillment Service?
An order fulfillment service is a third-party company that stores and ships your products. When the fulfillment center receives orders from your customers, they fulfill the orders, package them and ship them directly to your customers.
For example, last holiday season saw a massive increase in the amount of sales that were place online and on mobile devices. As e-commerce increases, distribution channels become more important to the retail economy. Once orders are placed, it’s up to fulfillment companies to get that product to the consumer. Innovations in commerce, most notably the ever-growing mobile commerce movement, mean that distribution channels will have to modernize.
For some businesses that means establishing a more reliable channel for distributing goods or completely revamping the current model.
What Are the Benefits?
When you use an order fulfillment service in place of an in-house fulfillment operation, you can ship orders to your customers much faster. Your customers will receive their products quickly and will be more likely to return to your business for future purchases. In addition, previous customers will pass on positive information about your company to other potential consumers, which will increase your sales volume. Outsourced order fulfillment also allows you to focus all of your employees’ efforts on other more important tasks, such as customer service and marketing. Finally, using an order fulfillment service in place of an in-house operation saves you the money and hassle associated with renting, stocking, and staffing your own warehouse. In truth, the benefits of each of these methods largely depend on the type of business utilizing them and which method better fits that business’ goals.
How Does This Affect Distribution?
Fulfilling orders in-house limits the number of orders you are able to handle. In fact, you may not have enough resources to handle any orders at all, thus limiting you to in-store retail transactions. By hiring an order fulfillment service, you can handle as many orders as your customers care to place. This allows your business to expand to new markets without fear. Instead of selling your items in-store only, you can begin offering them online, through catalogs, and using sales teams. Instead of restricting the quantity of items your customers can order, you can encourage them to order as much as they want.
Fear is the worst enemy of progress, especially in the business world. Using an order fulfillment service removes all of the fear from expansion. With outsourced order fulfillment, your business can enter new markets without any hesitation. As your distribution channels grow, your sales volume and profit will grow as well.