The Pros and Cons of Third-Party Fulfillment Services

If you’re considering third party fulfillment services for your business, it’s important to examine the pros and cons. This is a service that’s growing and gaining a lot of interest across many industries. According to industry experts, third party fulfillment services and logistics companies (3PLs) are forecasted to grow to $2,144 billion before 2032, reflecting a 7.6% compound annual growth rate (CAGR) over the decade from 2022 to 2032. This growth is a testament to the benefits of such services, but they’re not right for every company. Let’s review why.

Pro: Outsourcing Order Fulfillment

Anyone who owns an internet-based company understands why third party fulfillment services are so popular! There’s a lot of tedious work that goes with order fulfillment. There’s also the issue of inventory and having to lease warehouse space as your company grows. Outsourcing inventory and order fulfillment is one of the main reasons why many companies choose to engage the services of 3PLs.

Con: Loss of Control of Customer Interaction

If you choose the wrong company, it can reflect negatively on your business. Any issues that your clients have with their deliveries will be blamed on you, not the fulfillment service company. This is an important consideration. If you do decide that you have to outsource these services, be sure to do your due diligence. Making the wrong choice can undo all of your hard work in a matter of months. Be sure to thoroughly research any service provider you’re considering.

How to Tell if Fulfillment Services Is Right For You

Fulfillment services can do the work that isn’t vital to your business. This will allow you more time and energy to devote to growing your company. No one wants to be bogged down in the minutia of shipping to the point where their core duties are neglected. These services are most appropriate for larger companies, and it could make sense for you to wait until you reach a certain growth and revenue threshold before engaging one. Every company is different, so make sure you base your decision on what’s best for you and its future success.

Interested in learning more about third party fulfillment services? Our team is here to answer your questions and help you determine if outsourcing your order fulfillment is the right move for your company. Get in touch and set up a consultation to begin the conversation. We look forward to hearing from you!

Posted 6/12/23