Comparing fulfilment providers on up-front price alone can often cost you more in the long run. Because when fulfilment starts getting noticed by your end customers, retention drops and negative reviews begin to surface online.
Poor fulfilment performance isn't just an operations problem. When things aren't going as planned, your customer service teams will be hit with more tickets, buyers won't return as often and your reputation will be damaged for all to see.
Let's unpack why the cheapest fulfilment option isn't always the best choice for a growing brand with strategic ambitions.
Consumers worldwide now view fulfilment as a core part of the brand experience, including delivery, tracking and returns.
For growing brands, this means that fulfilment is part of the entire post-purchase experience, not just a back-office necessity for you to get orders from A to B.
Let's look into how fulfilment issues impact the overall experience.
If tracking is slow or inaccurate (or even worse, non-existent), customers have every right to flood your support team with "Where's my order?" queries. Give your customers control over their post-purchase experience, and that's hundreds of avoidable tickets gone that your support team no longer has to deal with.
Customers don't care why an item arrives wrong or damaged, they just care that it did. Mis-picks, poor packaging and mishandled parcels create refunds and resends, meaning no revenue retained. Now, bad delivery isn't necessarily the fault of your fulfilment provider, but it's a good sign if they have measures in place for protecting your reputation when things go wrong.
Overselling or keeping excess inventory tied up in warehouse space often comes down to the tools at your fingertips. If you're not able to sync inventory in real-time or take advantage of forecasting systems, you'll experience more cancelled orders, apologies and discounts. Not only do these things eat away at margin, but they also damage trust over time.
Returns are a defining part of post-purchase fulfilment. Customers are more likely to come back if the returns process is easy and clear. When you grow globally, it's important to facilitate a local returns experience that doesn't eat too heavily into your margin. If returns are simple and fast for customers, you'll recoup the lost revenue of returns in repeat purchasing.
A huge factor in any operational decision is cost. Where fulfilment is concerned, growing businesses need to look beyond comparing just pick and pack pricing, and instead focus on overall cost-to-serve.
Let's look beyond headline rates:
Cheap units look good on paper, but the overall cost-to-serve of repairing broken experiences adds up fast.
This is where the narrative can flip. Better fulfilment, even at a slightly higher price point, can often cost less overall because it results in fewer issues and more repeat business.
As well as considering your fulfilment provider's up-front price card, it's also vital to start measuring outcomes. Here are five questions to ask if your brand has big growth ambitions:
If you can't answer these confidently or positively, your customer experience might be at risk.
As we've touched on, up-front cost isn't the only thing to consider when choosing your next fulfilment provider – but overall cost-to-serve is.
For example, a provider with a wide network of warehouses may cost more up front to work with, but they're more likely to position stock closer to your customers worldwide, reducing shipping costs and providing a more local customer experience.
It may also cost more to invest in better technology, but this tech will support you across a range of key reputation-enhancing fulfilment functions.
In the end, everything boils down to:
It's vital to take these into consideration when you're assessing new providers, thinking of the future as well as what you're currently servicing today.
If you’re serious about growth, price per pallet or pick is only the starting point.
Our Fulfilment Health Score Quiz assesses your setup across the core drivers of fulfilment performance and customer experience, including:
...and much more.
Easy to complete and done in under two minutes, the quiz gives you an instant percentage health score and personalised advice to improve weaker areas.