While traditional retail sales have remained flat, online sales have experienced steady double digit growth over the past few years.
These figures promise a rich market for online companies, yet many are unprepared to meet the demands of this growth.
As eCommerce sales increase so can the cost and complexity of effectively managing the online channel.
Forrester Research, a leading technology and market research company, conducted a survey of eCommerce companies and identified global distribution, rising customer expectations, fulfillment costs, and the logistics of moving large volumes of small parcels as the major challenges facing the industry.
“The eCommerce boom risks being halted by logistics chaos,” the report indicates.
Consider these statistics:
An effective and economical solution
It is highly recommended that organizations considering outsourcing run the numbers to determine exactly what they can save.
In order to gain economies of scale, Forrester Research advises that mid-sized eCommerce companies (average of 1,000 orders per day) outsource their order management, logistics and fulfillment services.
When online merchants use an outsourcing partner they have the ability to share back office systems, warehouse space, and human resources with other companies, typically allowing orders to be fulfilled for less than 10 percent of revenue.
Some of the benefits of outsourcing are that it allows companies to:
The opportunity to reduce costs and increase profitability has convinced many companies to outsource their direct-to-customer channel even when their sales volume is sufficient to cover the expense of running the operation in-house.