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By Liam Brennan
We don’t mean to sound negative, but let’s be frank, with energy prices on the rise and the cost of living steadily increasing, some belt-tightening times are on the horizon for all of us.
This is particularly true for business owners, who will have to reduce costs as much as they can over the coming months. Ecommerce sales already have plenty of overheads, and the expenses accrued from order fulfilment is one of the biggest blockers for online sales success.
The average cost of fulfilling a single order in the UK is £3, for those who do their own fulfilment. When multiplied to reflect the hundreds, or even thousands, of orders a business generates each day; this can diminish any financial returns.
Third party fulfilment companies are a lifeline for ecommerce stores who are looking to reduce the financial costs, stressful arrangements and general time-consuming activities that come with picking, packing and despatching orders. Although living costs are increasing, the ecommerce market itself accounted for nearly 30% of all UK sales in 2021.
Here at Huboo, we have a transparent approach to fulfilment. We don’t adjust our prices based on energy bill usage, but rather we agree on all costs ahead of the fulfilment process; irrespective of living cost revisions.
Read on to see how our fulfilment centre makes ecommerce easier and less costly for a range of ecommerce businesses.
The cost of fulfilment can be broken down into four categories, which when combined will determine all vital aspects of ecommerce distribution, such as product size, order volume, assembly technique, and order destination, which all accrue high energy costs during their processes. The four categories are:
The cost of outsourcing inventory
Storage of stock
Huboo is transparent on pricing, allowing clients to understand exactly what to expect before they send their products to us.
As costs increase, retailers that ship products without support will see a sharp billing increase. Paying for the technology and software required for effective fulfilment can incur huge costs, especially for small to medium-sized businesses.
No matter what technology you choose to employ, an efficient and reliable system with data perception is a vital investment that comes with a considerable cost, not least due to the electricity bills involved.
A 3PL like Huboo invests in the best ecommerce technology available, via a team of expert developers, who establish partnerships with the likes of Bots&Us; a renowned ecommerce tech expert, allowing online businesses to save time on researching industry mechanics to instead focus on their business strategy.
You’ll also find that the best fulfilment technologies are in the hands of fulfilment providers anyway; using research and data insights to update machinery regularly as the industry evolves.
Even if you’ve chosen to manually process orders, your energy costs will climb sharply in the coming months. This is due to the charges required for training staff, who by law must be fully trained to use all relevant warehouse machinery.
At Huboo, we have a team of professionals familiar with all areas of the fulfilment process, across the entire retail supply chain. This experience greatly reduces the energy bills of any client who works with us.
Furthermore, a 3PL provider will ensure other necessary aspects are catered for, from sourcing equipment like forklifts and pallets, to overheads like maintenance costs, business insurance, and employee wages. Not to mention, the financial costs and time spent on finding and hiring professionals with job advertisements.
At Huboo, our Hub Managers work quickly and effectively on micro ‘Hubs’, part of our Micro Hub Model. This model helps improve efficiencies in the warehouse by limiting the time spent working late to pick and pack customer orders, reducing the travel time for workers to minimise fatigue and, ultimately, reducing costs for our customers.
Renting sufficient space to fulfil orders is a necessary undertaking for any online business.
This includes storing stock correctly and logically in an environment where distribution is safely carried out in accordance with retail laws. A lot of costly planning and legal agreement is involved with this, including the electricity needed to power such large rooms, which applies no matter how much of the available space is needed.
A fulfilment provider like Huboo accommodates warehousing space according to the required amount. This flexible approach makes it possible to easily scale as and when required; for example when industry trends and seasonal changes occur, which might mean increasing or reducing space quickly.
Managing your own warehouse space also means paying energy fees despite any fluctuation in demand, as well as needing to maintain a location, regardless of it being fully stocked or almost empty.
Whether you’re new to ecommerce or just looking to save on costs with an existing business, outsourcing to a 3PL provider will greatly reduce spend during these times of rising prices.
Speak to Huboo and get a quote for your needs today!
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