Imagine you operate a warehouse for your eCommerce businesses. Rows of shelving within reach to the ceiling, loaded with master cartons filled with individual products.
When an order comes in, an employee retrieves the items from the bins to be packed and shipped. This retrieval process is called pick and pack, and it could save your businesses a lot of time and money.
It gets harder to cost-effectively fulfill orders as your grow – especially in the age of fast, free, returns-included delivery. Should you operate your own warehouse to cut costs and accelerate deliveries? You could. Some do. Most brands, however, opt to skip the overhead and outsource fulfillment with pick and pack.
Pick and pack services are offered by fulfillment companies, along with inventory management, storing, and last mile delivery. Partnering with a fulfillment center lets you cut fulfillment costs and time to scale growth – without incurring risk or overhead.
This post talks about how pick and pack, the new staple in eCommerce, can benefit your business – whether you’re just starting or scaling up.
What is Pick and Pack?
Pick and pack is an order fulfillment model used by eCommerce retailers. When an order is received, workers pick the items from master cartons on warehouse shelves then pack them into boxes or envelopes for shipment.
Pick and pack is increasingly popular as a way to store and quickly distribute varied products from a single location. As eCommerce evolves, online shoppers expect fast delivery and companies are forced to keep up. More than half (55%) of surveyed online businesses now offer two-day delivery, up from half that a couple years ago.
Done-for-you pick and pack offers two key complementary benefits to merchants:
- Inventory storage near customers for faster delivery
- Last mile delivery on demand
With fulfillment on demand, you can store products in regional fulfillment centers near to your buyers. This allows for faster fulfillment without any extra effort on your part. And with in-house fulfillment diminished or deleted, you can focus your growth-related activities like marketing.
Pick and pack is intended for medium and large eCommerce businesses. If you still store inventory in your office or living room, there’s little need for the efficiencies of third-party fulfillment. But as your living space or office begins to feel cramped and you spend more and more time daily on fulfillment – you may want to revisit pick and pack services.
To learn more about growing your business, read the full guide to third-party fulfillment.
The Pros and Cons of Pick and Pack
Pick and pack is fast becoming a standard in eCommerce fulfillment. This is because eCommerce operations are increasingly complex, thanks to the rapidly inflating expectations of online buyers.
When done right, pick and pack accelerates delivery lead times, lowers costs and maintains order accuracy for growing businesses. Of surveyed companies that outsource fulfillment, nearly 8 in 10 plan to do so more in the future. But like any outsourced process, there are trade offs to consider.
Pros
- Accelerate fulfillment: Speed up delivery lead times when your orders ship from areas near your customers
- Product expansion: Consider adding to your product line since you'll have access to more storage in third-party warehouses
- Increase customer satisfaction: Deliver on expectations for fast, seamless deliveries and returns
- Save on shipping: Fulfillment partners get discounted shipping rates from couriers due to their high shipment volumes
- Improved scalability: Grow your business without adding to overhead from warehouse rentals, labor and fulfillment tools
- Go global: Third-party fulfillment centers exist worldwide, allowing you to expand your online presence with customers worldwide
Cons
- Lowered margins: The cost of done-for-you fulfillment varies by provider and by service suite, but it’s not free
- No fulfillment control: Handing the reins over to a third-party means trusting that your orders will arrive as promised; meanwhile, you’re still in charge of dealing with customer complaints
- Competition for quality: Top-notch eCommerce fulfillment is in demand, so prepare to be patient as you look for an ideal partner
Takeaway: Pick and pack fulfillment is helpful to merchants looking to scale their business, especially internationally. Consider a quick chat with Easyship’s global shipping experts. We offer tips and guidance, and can introduce you to our global network of proven fulfillment partners at no charge whatsoever.
Best Practices for Getting into Pick and Pack
Increasingly, top fulfillment partners offer pick and pack services. You can expect orders to be prepared by professional warehouse staff and shipped in a fast, reliable and accurate fashion.
Conversely, picking the wrong partner often leads to major headaches and customer issues. Here are a few tips for getting into pick and pack the right way.
1. Prioritize professionals
Skilled pickers get your items out on time and in good condition. Ask prospective partners how they ensure the integrity and accuracy of deliveries on a worker level. Review employee protocols for careful handling, clear labeling and efficient shipping practices.
Process is important, especially when workers are rushed by high holiday order volumes. An ideal partner puts quality first, or you're in for a mess of customer complaints, returns and churn.
2. Anticipate returns
An estimated 30-40% of eCommerce orders end in a return, and these numbers are rising. Studies show buyers add extra items to meet free shipping thresholds, then return unwanted items.
To protect against these costly behaviors, work with a partner who offers returns processing. Margins on returned orders are low already, but anticipating the need for returns processing helps to keep profits up.
3. Confirm capacity
Can your partner handle your order volume? How about during the holidays? What about five years from now? Ideal partners have adequate space and staff to handle your current order volume plus seasonal spikes. Ask prospective partners how they operate during peak season, how they adjust to surges, and what impact this has on delivery lead times.
4. Review the track record
Vendors make mistakes, and it's your brand on the line. Customers will complain if your partner delivers too many, few, damaged, or incorrect items. Over time, these flubs tarnish customer loyalty, your online reputation, and revenue. Review case studies, ask for references, and read reviews on third-party sites like Clutch.co to get a sense of the company’s track record.
5. Check couriers and discounts
Outsourced fulfillment gives you access to discounted shipping rates. These discounts help you offset the service fees from the provider. Double check that your partner offers rates at a discount, and that your bottom line can handle the service.
Also ask if the provider uses the couriers you and your customers prefer. Customer experience will suffer if you can’t use the services you want.
6. Ask about customization
Some fulfillment centers offer upgraded services that enhance the customer experience, including:
- Package customization
- Specialty packing materials
- Custom boxing
- Personalized letters
These services cost more but can benefit certain brands. If you think your customer experience needs help, a fulfillment partner may be able to help.
Easyship with Pick and Pack
Pick and pack is a trending fulfillment model in eCommerce, especially with scale-ready brands. Outsourcing fulfillment with P & P helps to speed up deliveries, lower operational costs, and improve customer satisfaction.
It’s important to look for a fulfillment company that offers the capacity, services, and quality-control measures your brand deserves. Be thorough with your research fulfillment centers, and don’t hesitate to ask for free guidance and connections from our team shipping experts.
Easyship integrates with all warehouse management systems used by top fulfillment companies worldwide. In other words, as you grow your business, we grow right along with you – discount rates, shipping automation and all. To create your 100% free Easyship account, visit our signup page.
