Streamline Your Order Fulfillment: Decide

by Chelsea Camper | Last Updated December 30, 2015

There are a lot of questions that come up when trying to figure out whether your should complete your order fulfillment in house or outsource it to an order fulfillment service. To help you decide we’ve compiled a list of pros and cons of both in house order fulfillment and outsourcing order fulfillment.

Let’s start off on a good foot with Advantages.

Advantages

In House Order Fulfillment

Retain full control. If you think a different type of box or packing material should be used, then it gets used.
Keep a close eye on inventory. When you’re not in control of your inventory sometimes you don’t get the notice that you’re low or out of stock of a particular item until a customer orders it.
Make sure items packed correctly. Sell fragile or expensive items? When you do your own order fulfillment you can keep an eye on how your products are being packed and shipped.
Adapt the system to fit your unique needs. It is much easier to change up your order fulfillment process if you’re already in control of it. You can change it to meet your business’ standards and needs without too much hassle.

Outsourcing Order Fulfillment

Someone else is doing the work. Outsourcing allows you to free up some of your time so that you can focus more on Sales and Marketing and less on Warehousing and Shipping.
Don’t have to store inventory at your business location. Whoever you’re outsourcing to will need to make space for your inventory instead of you having to rent more space near your office or build onto your current building.
Strategically outsource to warehouses in key geographic locations. If you sell all across the country it might be beneficial for you and your customers if you could ship from the the Mid-West instead of from your West Coast office.
Shipping cost can be lower. Since some warehouses ship a lot of products they can sometimes get better deals on shipping.

Disadvantages

In House Order Fulfillment

You or your employees have to do the work. One way or another you are going to have to pay for the packaging and shipping of your products; either by outsourcing it to an order fulfillment service or by hiring employees to do it in house.
Inventory space. When your business starts picking up you’ll need more room for your inventory. You’ll either have to add onto your existing building, move to a larger building, get a second building, or rent more space.
Shipping could be higher. If your offices are in Florida it’s going to cost more to ship to California than Georgia. Unless you get a warehouse in the Mid West it’ll be hard to get your shipping costs down for orders sent to the other side of the country.

Outsourcing Order Fulfillment

Greater possibility of miscommunication. The more hands your instructions have to pass through the easier it is for something to get mixed up or lost in transit; it’s hard to tell how many different hands your instructions pass through when you outsource your order fulfillment.
Pay for storage of your inventory. Order fulfillment services store inventory for all kinds of businesses and they can charge for the storage.
Can get expensive for all features you want. If you’re looking to get all the bells and whistles with an Order Fulfillment Service, that could rack up the bill.
Giving up control of inventory. Once you have your inventory shipped to the order fulfillment service it is in their hands now; you have given up most of the control you had over the inventory.
Can’t depend on reliability or speed. As mentioned earlier, order fulfillment services usually have a large number of customers. You don’t know how busy the order fulfillment service is with its other customers. If they’re slammed with orders to process, yours could end up at the bottom of the list.

To Recap

If you don’t have the funds to hire employees or the time to manage them, outsourcing might be a good idea. Just make sure you’re not paying more to outsource your order fulfillment than it would cost to keep it in house; remember, you lose control of your inventory when you start outsourcing.

Retaining control of your inventory is important and that’s where in house order fulfillment really steps up. It can keep your shipping costs up though if your main office is not located near the center of the country.

What advantages or disadvantages do you have about in house or outsourced order fulfillment?

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