Using an outsourced 3PL? Here are 10 ways to reduce your order fulfilment costs.

reduce order fulfilment costs

In the highly competitive world of e-commerce, order fulfilment can be a major challenge for e-sellers and e-retailers. Not only do you need to deliver your products quickly and efficiently, but you also need to do so at the lowest possible cost. Next to your buying/manufacturing costs, it can be the next major cost on your balance sheet. The cost of order fulfilment can seriously eat into your profits, so it’s important to find ways to reduce these costs without sacrificing quality.

For e-sellers and e-retailers who use an outsourced 3PL (third-party logistics) provider, there are many opportunities to reduce order fulfilment costs. In this article, we explore 10 ways you can reduce your costs and improve your bottom line.

  1. Evaluate your pricing structure.

The first step in reducing your order fulfilment costs is to evaluate your pricing structure. Take a close look at your margins and make sure that you are pricing your products competitively. If you can increase your margins, you will have more room to negotiate with your 3PL provider and reduce your costs.

  1. Consolidate your shipments.

One of the biggest costs associated with order fulfilment is shipping. To reduce these costs, consider consolidating your shipments. Instead of shipping each order individually, group multiple orders together to take advantage of bulk shipping rates.

  1. Optimise your packaging.

Packaging is another area where you can save money. Be sure to optimise your packaging to reduce material costs and minimise package weight. Your 3PL provider can help you identify the most efficient packaging options for your products.

  1. Negotiate better rates.

Take the time to negotiate better rates with your 3PL provider. Ask about discounts for high-volume shipments and inquire about ways to reduce your handling and storage fees. You may be surprised at the savings you can achieve simply by asking.

  1. Use real-time data to make informed decisions.

Real-time data is critical when it comes to reducing order fulfilment costs. Make sure that you are using a 3PL provider that offers real-time data on inventory levels, order status, and shipping costs. This will allow you to make informed decisions and adjust your strategy as needed.

  1. Leverage technology.

Technology can be a powerful tool when it comes to reducing order fulfilment costs. Consider using automated systems for inventory management, order processing, and shipping. These systems can help you streamline your operations and minimize errors.

  1. Monitor your inventory levels.

Keeping excess inventory on hand can be costly. Be sure to monitor your inventory levels closely and adjust your orders as needed. By keeping a close eye on your inventory, you can avoid the costs associated with overstocking.

  1. Minimise returns and exchanges.

Returns and exchanges can be expensive for e-sellers and e-retailers. To minimise these costs, be sure to invest in quality control and take steps to ensure that your products meet customer expectations. You can also consider offering incentives to customers who keep their purchases rather than returning them.

  1. Use data analytics to optimise your operations.

Data analytics can provide valuable insights into your order fulfilment operations. Look for patterns in your order volume, shipping costs, and returns/exchanges. Use this information to optimise your operations and reduce your costs.

  1. Continuously evaluate your strategy and fulfilment partner.

Finally, be sure to continuously evaluate your order fulfilment strategy. As your business evolves, your strategy should evolve with it. Regularly review your processes and look for areas where you can improve efficiency and reduce costs. If for some reason, your current fulfilment partner is continuing to let you down, it may be time to change your 3PL provider. This is whether a company like Evestico can help. We deal with an extensive network of fulfilment providers across the UK & Europe, so we can discreetly approach the appropriately providers on your behalf and negotiate you a better deal.

Summing up, e-sellers and e-retailers who use an outsourced 3PL provider have many opportunities to reduce their order fulfilment costs. By evaluating your pricing structure, consolidating your shipments, optimising your packaging, negotiating better rates, using real-time data, leveraging technology, monitoring your inventory levels, minimising returns and exchanges, using data analytics to optimise your operations, and continuously evaluating your strategy, you can reduce your costs and improve your bottom line. With the right strategy in place, you can achieve greater efficiency, faster delivery times, and more satisfied customers.