Choosing the right fulfillment partner will save you a great deal of money, not to mention sleepless nights. If you’re working with an eCommerce business, there are dozens of good reasons to outsource your fulfillment. But outsourcing to a service that does not specialize in eCommerce is an avoidable mistake that is being made more and more these days. That’s because there’s currently a consolidation of a sort going on the in fulfillment industry. Large, multinational companies that have never shipped a single order are suddenly buying up small to mid-sized fulfillment companies. Or a larger fulfillment company will buy up one that specializes in eCommerce fulfillment, and then brand the whole company as an eCommerce fulfillment partner. This allows them to announce another service offering, and in many cases it makes business sense for these companies to do so. However, there are a few reasons you need to be incredibly wary of doing business with such groups.
Specialization and Expertise Do Not Carry Over
Some large logistics companies now offer eCommerce order fulfillment. Some will even say they specialize in a certain industry, because the fulfillment company they purchased did. But buying a rodeo doesn’t make you a cowboy, and neither doesn’t having a single specialized warehouse compare to the experience and knowledge of doing something for decades.
For one thing, as a business owner, you’re probably aware that greatest asset of your business are your employees. The benefits of specialization, of knowing how to work with a certain type of product and a certain type of customer, are generally things that are learned through experience, not a book or manual.
This is why it’s a bad idea to trust in the assurances of companies that claim to be an eCommerce fulfillment partner if they don’t have a history in eCommerce. Employees are not spread throughout an organization when a company is bought out. In fact, in most cases, they are laid off instead. Another reason you need to watch out for…
Companies Being Reorganized Are Not Operating At Maximum Efficiency
Even companies that were well-run before being bought out can change after being absorbed by a larger entity. I hope you’ve never had the misfortune to go through a restructuring. But if you have, you probably know just how messy they can be. The entire organizational structure changes, people are kicked out, new people are brought in, and it takes time for everything to get back to the same level it was, if ever. So do your homework. If you like both the parent company and the recently purchased company, just be careful about partnering with them when they are in the midst of a transition, which will generally take a year to settle at the very least. Hopefully this has given you some insight into the chaos that is the fulfillment market these days, and will help you choose a service that actually specializes in eCommerce fulfillment
Have you ever worked with a service before and after they were acquired by another company?