5 Ways a Fulfillment Provider Helps Improve Customer Retention and Increase Your Bottom Line

5 Ways a Fulfillment Provider Helps Improve Customer Retention and Increase Your Bottom Line

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Deciding whether you’d be better off handling your warehousing and order fulfillment operations in-house or outsourcing them to a third-party logistics provider can be difficult – especially if you haven’t worked with a fulfillment provider before.

However, knowing what you want out of a 3PL provider and how it can help you meet your goals is a good first step. In this post, we’ll discuss some of the ways you can optimize your order fulfillment by working with a 3PL logistics company.

#1: Offering Faster Delivery Options

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Because of Amazon’s 2-day delivery commitment, customers expect their products to be delivered to them as fast as possible. A 3PL fulfillment provider has the expertise and resources to offer strategically located warehouses and ship products from multiple shipping zones. As a result, you’re able to deliver products to customers faster and enhance their overall shopping experience.

According to a recent study, 49% of customers agreed that same-day shipping options was the driving factor that made them look for a particular vendor when shopping online. Another 63% of customers reported that estimated or promised delivery dates were a preference while businesses that offer same-day delivery were able to outshine 85% of the competition.

When you’re able to fulfil customer orders quickly on a regular basis, it helps strengthen your brand reputation and translates into increased sales. Plus, offering faster delivery options improves customer retention because customers expect 2-day delivery (and, in some cases, next-day delivery) from the online stores they shop at.

#2: Reducing Shipping Costs

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Since fulfillment providers handle bulk shipments everyday, they’re in a position to reduce shipping costs and offer volume discounts. Shipping large quantities of goods allows 3PL providers to negotiate lower shipping rates with shipping carriers and ultimately this discount trickles down to you and your customers.

Typically, they’re able to secure lower shipping fees for shipping a few thousand customer orders daily compared to a small business’ few hundred orders.

In addition to this, 3PL fulfillment companies enable you to minimize your overhead expenses by storing and handling your inventory for you. Since you’re no longer spending that money on leasing a new warehousing facility or hiring and training warehouse staff, you're able to charge customers lower shipping fees. By reducing shipping costs, you’ll likely see an increase in customer retention.

#3: Improving Customer Service

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You need to offer reliable customer service in order to succeed in the e-commerce space. Most order fulfillment companies have the expertise and resources to offer round-the-clock customer support including exchanges, returns, and refunds. Generally speaking, good customer service leads to repeat purchases and higher average order value.

According to a recent study, 62% of Americans who reached out to a customer service of some sort in the past year considered customer support experience an important part of the purchase process.

Customers look for a smooth shopping experience whether they’re buying online, via a website or an app, or at a retail store. Enlisting a 3PL can help you improve inventory management and allow you to complete orders from multiple warehousing facilities. As a result, you’ll be able to offer all sorts of options to your customers such as purchase online or pick-up in store.

A third-party logistics provider already has the industry knowledge and expertise to help you transition into an omnichannel environment. This way, you can provide the same shopping experience to your customers regardless of whether they buy from you in-store or shop online.

Fulfillment providers typically offer 24/7 customer support for returns, repairs, and refunds. This lets you improve customer satisfaction and increase customer retention without any extra effort on your part. 

While enlisting a 3PL provider might seem like a pricey option at first, you’ll get instant access to its storage space, work staff, technology, and warehousing facilities. It will also enable you to make your supply chain more flexible when orders are high. Some fulfillment services also offer 24/7 customer care call centers allowing you to resolve customer complaints in a timely manner.

#4: Providing Accurate Shipping and Handling

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Shipping damaged goods to end customers not only gives them a poor experience but also negatively affects your revenue with regards to handling returns and refunds.

By working with a 3PL order fulfillment provider, you’ll have a team with experience and expertise in properly picking and packing customer orders to guarantee safe delivery. As a result, your orders will reach customers in excellent condition with the packages containing correct items thereby minimizing returns and boosting customer satisfaction.

#5: Offering Better Picking and Packing

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Order fulfillment service providers already have established processes in place to pick and pack customer orders in a way that offers proper packaging and excellent service while helping you optimize your inventory. You can also use this as an opportunity to increase order value during packing to cross-sell, offer custom packaging, add inserts (such as free product samples), and improve kitting. This will help you improve the overall customer experience and increase customer retention.

Qualified fulfillment providers enable you to deliver products to customers faster and offer additional delivery options to meet their requirements. They have dedicated staff for picking and packing as well as advanced, integrated software for inventory management. With this infrastructure, they’re able to effectively eliminate any unnecessary delays in order fulfillment.

By hiring a third-party logistics service provider, you can outsource warehousing operations to experts and have more time to focus on core business operations. This will also help improve productivity and put you in a position to to ship customer orders on time.

Conclusion

By analyzing your particular needs and requirements, you’ll be in a better position to find a third-party fulfillment provider to help you meet customer expectations, improve customer retention, and increase your bottom line while you focus on business growth.

Let’s quickly recap the main reasons why you might consider working with a fulfillment provider:

  • Offer faster delivery options like shipping from multiple shipping zones and 2-day (or next-day) delivery.

  • Reduce shipping costs by getting volume discounts from shipping carriers enabling you to lower your shipping fees and pass on the savings to your customers.

  • Many order fulfillment companies provide 24/7 customer support for returns, replacements, and handling thereby helping you improve customer service.

  • A reliable fulfillment provider can help you optimize shipping and handling processes and allow you to deliver packages in good condition.

  • Fulfillment providers give you access to their dedicated staff for picking and packing goods in an efficient way.

What are some of the features you look for in a 3PL fulfillment service provider? Let us know by commenting below.