In a highly competitive market where customers expect to receive online orders with same-day or next-day shipping, fulfillment centers have become a smart solution for lowering costs. Both small startups and giant corporations can benefit from outsourcing shipping and handling to a quality fulfillment center. The center can take over the logistics of storing, labeling, sorting, packaging, and shipping your company’s inventory. Here are seven ways fulfillment centers can help your business sell more products and reach a broader base of customers.
1. Add new sales channels
Most small businesses start with a sales channel that delivers products directly to the customer from the store. Although less expensive, this practice is extremely limiting to businesses. It is difficult to grow the company and expand into new markets if the product must be stored in short supply at the business’ premises. However, a fulfillment center allows your business to enter the E-commerce market and reach broader customer demographics. To increase profit margins and to sell more products, your business must add new sales channels. Fulfillment centers are the most cost-effective strategy for increasing your customer base.
2. Protect against market fluctuations
As in almost any industry, prices are subject to dramatic increases and decreases. Fulfillment centers are a buffer against the market fluctuations that might otherwise harm your business. By storing a portion of your product in one of its warehouses, fulfillment centers can meet fluctuating consumer demand. Fulfillment centers are also experienced in the industry and can help new businesses plan ahead. Preparing for market fluctuations, which can occur at any time of the year, gives your business an edge over competitors and protection against profit loss. During times of peak demand, shipping costs will skyrocket for individual businesses. However, a fulfillment center can hold prices at a steady rate regardless of increased or decreased demand.
3. Grow your business
For small startups, entering the online retail market or expanding from regional to national can be extraordinarily difficult. Shareholders may hesitate to take on an increased risk of bankruptcy and prevent startups from becoming successful national or even global companies. Fulfillment centers allow businesses to access a wider base of consumers and retailers who are eager to support your products. By controlling the shipping, handling, and other additional logistics for your online and brick-and-mortar store, fulfillment centers can help your business grow exponentially.
4. Handle new inventory
Fulfillment centers have access to a wide pool of resources that can efficiently label and process your inventory. Updates are made in real time to meet consumer demand. A quality fulfillment center is also capable of handling customer returns and exchanges that might stymie a smaller company. By letting a fulfillment center handle complicated shipping logistics, you can focus on growing your business and satisfying customers. Outsourcing to a fulfillment center can help you efficiently distribute new products to an expanded customer base.
5. Create loyal customers
Instead of stretching your company thin to meet the demand for fast shipping and the cost of expensive storage units, hire a fulfillment center to free up more of your time. With this headache taken care of, you can focus your efforts toward developing a brand identity that connects with customers. Fulfillment centers help you retain the integrity of your services and products in a way that can impress customers. By quickly meeting shipping deadlines and processing returns and exchanges, you will satisfy consumers and create a loyal customer base. Sending customers a damaged product or the wrong item can harm your company’s reputation and prevent you from reaching new customers. A fulfillment center can keep up with shipping demand and cost with experienced methods for sorting, packaging, and sending your company’s products.
6. Reduce shipping costs
A fulfillment center can provide cheaper shipping rates to your business than if you tried to send products on your own. Since your products can be shipped faster at a lower cost, you can expand into new markets, sell more products, and earn more profit. With the money left over, your company can innovate new products, make investments, or hire additional employees. Reduced shipping costs help your business expand from national to international. With the help of a fulfillment center, the world is your company’s oyster.
7. Meet customer expectations
In the past, customers expected items to arrive at their doorstep in one to two weeks and were satisfied with this timing. Since industry giants such as Amazon have popularized same-day and two-day shipping, customers are expecting products to arrive faster than ever. When a customer sends an item back for a return or an exchange, they expect to receive a refund or a new product within days. Many customers will become anxious if a product seems to be taking too long to ship, especially if they have ordered from a new company whose reputation they are uncertain about. A customer may take to social media to complain about your company’s slow shipping which could dissuade other consumers from shopping at your business. Avoid these brand management crises with a fulfillment center that is equipped to ship products within days and include the proper tracking information to customers.
At KION North America, we are innovating the strategies and technology that will help businesses expand into new markets and reach more customers. With our high-quality Linde and Baoli forklift lines and tailored supply chain solutions from our sister company, Dematic, companies have the tools required for maximizing both productivity and profits. For more information about how our forklift models can revolutionize your warehouse operations, contact our expert team at (843) 875-8000.