Order fulfillment encompasses the entire process of receiving inventory, processing, picking and packing orders, and shipping to customers. For ecommerce brands, fulfillment capacity and operational efficiency must expand alongside sales growth to avoid frustrating order delays or backlogs. But adding more staff and infrastructure can be complex and costly.

By outsourcing fulfillment processes to a third-party logistics (3PL) partner, businesses can tap into specialised expertise and flexible networks to scale up or down seamlessly. Fulfillment partners become invaluable in removing constraints to support sustainable business growth across channels and markets.

In this blog, we explore what it means to outsource your fulfillment processes, the role 3PLs have to play in this, and the benefits this can have for your business.

 

WHAT DOES IT MEAN TO OUTSOURCE FULFILLMENT PROCESSES?

When you outsource your fulfilment processes, you partner with a third-party logistics (3PL) company that manages some or all of the order fulfilment process. 

This is different to in-house fulfilment, as this is when the company manages the entire order fulfilment process itself.

 

WHAT FULFILLMENT SERVICES DO 3PLS OFFER?

 Generally, 3PLs will offer standard fulfilment services like storing inventory, picking and packing orders, and the global shipment of orders. Some will also offer additional services, such as returns management and branded packaging.

At a high level, outsourced order fulfilment includes:


RECEIVING INVENTORY SHIPMENTS


The 3PL will receive inventory shipments from suppliers into their warehouse and prepare items for efficient storage based on velocity, characteristics, and seasonality. Proper planning enables the quickly location of products when it's time to fulfil orders.


PROCESSING ORDERS


Processing orders involves verifying payment details, assigning tracking numbers, and ensuring data flows smoothly into the warehouse management systems that orchestrate workflows. Accurate order information is crucial for proper fulfilment.


PICKING


Picking requires selecting or gathering the right items from inventory to fulfil each unique order. The optimisation of routing, batching, and cart configurations using pick tickets or handhelds minimises wasted motion and time.


PACKING

Packing means safely preparing orders to avoid shipping damage based on item fragility while also generating compliant shipping labels. Added services like gift wrapping or custom-branded inserts provide added value.


SHIPPING

Shipping orders to customers’ delivery addresses via the optimal carrier and service level balancing cost, speed and tracking visibility. Integration with carrier APIs eases dispatch.


REVERSE LOGISTICS

Reverse logistics includes managing returns, exchanges, and refunds. It is important that these processes must also operate smoothly. Inspection, triage, and return to sellable stock or resale channels needs to be streamlined.


WHAT RESOURCES DO 3PL FULFILLMENT COMPANIES HAVE?


3PLs maintain dedicated warehouses staffed with trained fulfillment professionals who leverage specialised technologies and process optimisations. Their capabilities encompass:

  • A national fulfilment centre network positioned strategically for timely, affordable delivery to population centres. Locations on both coasts and inland.
  • Scalable storage, picking modules, and shipping infrastructure to flexibly adjust capacity in alignment with client order volumes and items.
  • Advanced warehouse management systems (WMS) to orchestrate complex order workflows from intake to last mile delivery across sales channels.
  • Real-time inventory visibility and business intelligence reporting on items, orders, throughput, productivity and more to inform decisions.
  • Support for omnichannel order processing. Retail store replenishment programs, BOPIS, drop shipping, kitting, assembly and more.
  • Value-added services like gift wrapping, custom packaging, compliance labelling and more to delight customers.
  • The economies of scale, specialised skills and process optimisation of 3PL networks provide major cost and capability advantages compared to in-house fulfillment for most brands.


BENEFITS OF OURSOURCING FULFILLMENT PROCESSES

 
The multifaceted advantages of outsourcing order fulfilment processes rather than managing 100 percent in-house include:


COST EFFICIENCY

3PLs can achieve significantly lower fulfilment costs for most clients compared to in-house operations through load balancing across thousands of clients, and far lower fixed asset costs. 

hen you outsource fulfilment processes to a 3PL, you only pay for services used rather than carrying excess facility space and staff year-round.


SPECIALIZATION


3PL warehouse professionals focus on continuous optimization and process innovation rather than tactical work. This brings sophisticated solutions in automation, labour management and inventory control that brands struggle to justify themselves.


FLEXIBILITY 


3PLs readily adjust space, labour, inventory buffers and workflows to accommodate seasonal peaks, new product launches or sales channel additions. They provide continuity if disasters ever disrupt in-house sites. 


TECHNOLOGY ENABLEMENT


Many brands lack expertise in deploying complex fulfillment management software, automation, advanced analytics and more that 3PLs make readily accessible.


FOCUS

Outsourcing fulfillment processes enables brands to concentrate strategic resources on developing amazing products, impactful marketing and exceptional customer experiences rather than distribution operations.

 

WHEN SHOULD YOU OUTSOURCE FULFILLMENT PROCESSES? 

There are certain triggers and situations that indicate a business is likely ready to outsource fulfillment. These include:

  • Lack of space: You might choose to outsource fulfilment processes when warehouse space is filling up rapidly, meaning you are unable to support the intake of new inventory and scale up your business.
  • Increased order volume: When order volumes spike well beyond current capacity, you might look to outsource fulfilment. In-house staff might be becoming overwhelmed and struggling to fulfil orders on time, resulting in backlogs growing.
  • New products and categories: 3PLs can help when you are adding new products or categories that don’t fit efficiently into current facility storage and picking configurations and are a poor match for existing workflows.
  • Exploring new sales channels: Expanding into major new sales channels like Amazon, large retailers, or additional countries can strain systems and staff, requiring you to outsource your fulfilment processes.
  • Lack of resources: Outsourcing fulfilment to a 3PL can help if you are lacking labour, resources or expertise to efficiently handle the 40 to 60 percent seasonal order surge typical of peak holiday periods. This can cause the cost of overtime costs and temps to soar.

Transitioning to outsourced experts provides immediate space, staffing, and optimized processes to address these constraints and sustain growth without major capital investment. It also allows focusing precious resources on developing exceptional products and customer experiences rather than daily distribution operations.

For brands currently managing fulfillment in-house, evaluating existing warehouse management, inventory planning, and productivity capabilities is wise. Leveraging 3PL expertise rather than building skills and systems internally accelerates the expansion journey.

 

WHY OUTSOURCED FULFILLMENT DELIVERS STRATEGIC VALUE

The multifaceted advantages of outsourcing order fulfillment rather than managing 100 percent in-house include:

Cost Efficiency: 3PLs can achieve significantly lower fulfillment costs for most clients compared to in-house operations through load balancing across thousands of clients, and far lower fixed asset costs. Pay only for services used rather than carrying excess facility space and staff year-round.

Specialization: 3PL warehouse professionals focus on continuous optimization and process innovation rather than tactical work. This brings sophisticated solutions in automation, labor management and inventory control that brands struggle justifying themselves.

Flexibility: 3PLs readily adjust space, labor, inventory buffers and workflows to accommodate seasonal peaks, new product launches or sales channel additions. They provide continuity if disasters ever disrupt in-house sites. 

Technology Enablement: Many brands lack expertise deploying complex fulfillment management software, automation, advanced analytics and more that 3PLs make readily accessible.

Focus: Outsourcing enables brands to concentrate strategic resources on developing amazing products, impactful marketing and exceptional customer experiences rather than distribution operations.

 

HOW TO CHOOSE THE RIGHR 3PL FOR OUTSOURCING FULFILLMENT PROCESSES

Choosing the optimal 3PL partner to help with fulfilment is crucial to realising the advantages of outsourcing to a 3PL. Important criteria for evaluation include:

  • Proven order accuracy and on-time delivery track record for clients based on warehouse KPIs and performance management rigor
  • Flexible contractual terms and capabilities that align with seasonal business needs and multi-channel processes
  • Ability to efficiently meet peak demand during seasonal spikes like Black Friday through dedicated capacity
  • Relevant experience with your specific product categories, throughput volumes and omnichannel services
  • Breadth and sophistication of their warehouse management systems, automation technologies and tools
  • National and regional fulfillment center footprint that supports cost-efficient delivery times
  • Cultural fit and shared values for a collaborative, evolving long-term partnership

Touring potential 3PL facilities can help you assess capabilities first-hand through observation. And of course, it is important to evaluate overall value relative to managing fulfilment processes in-house, ensuring to factor in all expenses, strategic impacts, risks and challenges.

 

BEST PRACTICES FOR OUTSOURCING FULFILLMENT PROCESSES

Transitioning from self-managed fulfillment to optimized 3PL partners requires meticulous planning and phased execution:

When outsourcing your fulfilment processes, you should do the following:

  • Start small: Pilot first with a smaller product set or non-core sales channel before full commitment. Make sure to test integrations.

  • Work collaboratively: Align order data flows, inventory tracking, key metrics and reporting visibility collaboratively upfront.

  • Set clear goals: Define KPIs for accuracy, timeliness, and responsiveness. and You should monitor this routinely to ensure excellence.

  • Carry out regular reviews: Schedule periodic business reviews to re-optimise solutions as volumes, products, and channels evolve over time.

  • Provide timely data: Provide volume forecasts, projections and inventory requirements well ahead of peak seasons to align labour, space, and transportation appropriately.

 

OUTSOURCE YOUR FULFILLMENT PROCESSES WITH SEKO LOGISTICS

At SEKO, we have extensive experience in providing expert ecommerce logistics and delivery solutions, including global ecommerce fulfilment and warehousing and order fulfilment. 

As a trusted logistics partner operating across a global network, we are dedicated to providing a reliable, client-first service to help transform our clients’ businesses. Our managed services enable you to focus on delighting customers as your brand grows.

Thinking about outsourcing your fulfilment processes to a 3PL? Contact us today to explore our customisable solutions tailored to your needs, whether launching new channels or entering new regions.