Fulfilling Orders Yourself vs. Outsourcing 3PL Fulfillment (2023 DTC Edition)

When launching a brand the most energizing and enjoyable experiences often come to an abrupt halt.

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That halt is infamously known as “Order Shipping and Fulfillment.” 

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After your time and energy have been poured into creating your brand, content and marketing strategies, and designing your store, what does success leave you with? An inbox of “Orders Placed!” Your early success leads to orders piling up waiting to be fulfilled.

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So those energizing experiences come to a halt when you have to ask yourself, 

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• “Now, how do I actually ship these orders?” 
• Then realize, “I’m spending hours of time on this, should I ‘outsource’ this to a warehouse team / my family members or an experienced 3PL fulfillment partner.”
• Then it’s “How do I effectively grow and scale the manual order fulfillment process?”
• Finally, you ask yourself and team, “Now, how do we optimize costs at scale when fulfilling and shipping?”

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For us at Atomix, the Shipping and Fulfillment process is actually what energizes us. In the same vein that the creative aspect of building your DTC brand energizes you!

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In the following blog, you’ll uncover the answers about fulfilling orders yourself and the greatest question of all, “To Find a 3PL, or Not To, that is the question.” (h/t Famous Shakespeare Speech).

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Table of Contents

• How to Fulfill Orders Myself
• When to Consider 3PL vs Inhouse (fulfillment myself)
• Costs of Inhouse vs 3PL
• Benefits of Inhouse vs 3PL
• What to Look for in a 3PL

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1. How to Fulfill Orders Using In-House Fulfillment

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Let’s cover the basics. 

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DTC eCommerce Orders are shipped in one of two ways, in-house warehouses or third-party shipping and fulfillment companies. Let’s see how the process works:

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Bonus: Learn about the rise of Micro-Warehousing and how Atomix Combines the Best of Outsourcing with the Benefits of In-house.

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‍Processing the order

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• When a customer makes a purchase from you, a proper order management strategy must be in place for the order to be fulfilled accurately. 
• Making sure that each order is tracked is crucial for inventory management and managing unit economics. 
• Ensuring a timely delivery will drastically increase customer retention and experience.
• [lastly post purchase, tracking]

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Picking the right packing material(s)

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• Make sure that you are shipping your products in appropriate box sizes. Carriers such as UPS, USPS, Fedex charge for dimensional weight, which means any box that is bigger in dimensions than actual weight will pay significantly more.
• Using protective materials such as bubble wrap, packing peanuts, and crinkle paper to prevent your product from being damaged upon arrival. 
• That first unboxing experience for every new customer will generate your first “word of mouth” reviews to their family and friends!

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Package your order

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• Once you have your materials, you can begin packing your product with your protective materials if necessary. 
• Adding little things like inserts, stickers and other marketing material provides a fun and engaging unboxing experience. Who doesn’t love free stickers? 
• Last but definitely not least, make sure to seal each package with packing tape so the contents of the package remain intact during transport. 
• We know it’s a no-brainer but hey, we’re here to help everyone!

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Label and ship your order

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• When you finish packing your order, you will need to print out a shipping label. 
• Printing your label at home is convenient if you have your own printer and can schedule a carrier pickup, otherwise you can go to the local post office to do so. (Pro Tip - If you live in a city and it’s hot in the summer, there can be long lines so bring water!)
• While doing this will require you to drive and wait in line, it can be helpful to learn how the process works as you’re finding a partner in the future! 
• Remember; when the time spent starts to get over 10+ hours per week, think about other parts of your business you could spend time on. It would also factor in additional cost, time and transportation.

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Track the package to its final destination

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• Once the package is with your carrier of choice, the last step of the process is to provide tracking information to your customers. 
• It’s important for your customers to know when their products will arrive so they don’t have to inquire with you in case of a delay or any changes are made.

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2. When to Consider 3PL vs. In-house (fulfillment by yourself)

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The simple, yet frustrating answer is “it depends” and we cover the detail at great lengths on when you should outsource fulfillment here. 

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Let’s cover the most important factors:

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More Control

Keeping the order fulfillment process in-house gives you complete control over your product and shipping logistics. Inbounding inventory, stocking, storing, packing, shipping and tracking are all the responsibilities of your brand.

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‍It can be both good and bad! But the entire process is in your hands. 

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Some brands have the means to keep things in-house, already having the expertise and resources necessary for fulfillment. 

In-house also allows for fully hands-on oversight, and the ability to conduct audits whenever you feel necessary. 

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It’s also important to consider where your customers are located in relation to your warehouse. So where your location should be can be determined with this shipping analysis!

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But for many other brands, this is exceedingly overwhelming. For example our report found the most common questions or pain points for brands:

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What happens when an order is returned? 

What happens when warehouse employees don’t show up? 

What happens when your mom helping you ship out orders is out sick or on vacation? 

What if something is shipped poorly? 

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Ultimately, having excellent customer support and strong shipping logistics for the end-to-end fulfillment process is crucial for any successful business. The micro-warehousing model designed by Atomix is a great alternative that can provide the benefits of both in-house and outsourcing fulfillment!

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‍Simple Processes

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A key reason for keeping logistics in-house is because it seems a lot easier on paper, which makes sense. 

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When a business first launches, success is never guaranteed. Who knows how quickly a new venture will scale! Who else do you rely on besides yourself or family members to help and show up everyday? 

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These questions are why we always recommend our consultation calls to determine whether there is value in shipping out your first orders yourself. To learn more about our consultative approach, our team of experts are always on stand by to chat. 

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By managing the process in-house, brands can gain a deeper understanding of the nuances and challenges to scaling their fulfillment operations. 

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So, in the end, ask yourself; how much do you value your time, and where do you want to focus your limited time and energy?

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3. Costs of In-house vs. 3PL

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Below is a comparison of cost factors between using self fulfillment and hiring a 3PL:

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Costs of Self Fulfillment

• Initial investment in equipment and technology
• Long term lease on a warehouse
• Recurring costs for equipment maintenance and upgrades
• Recurring costs for hiring, training, and managing in-house staff
• Costs for storing and managing inventory
• Shipping costs (e.g., postage, packaging materials)

Costs of using a 3PL

• Fees for 3PL services (e.g., storage, picking, packing, shipping)
• Costs of maintaining a relationship with the 3PL (e.g., communication, monitoring, reconciliation)
• Shipping costs (e.g., postage, packaging materials)
• Potential costs for integrating systems and data between your business and the 3PL (free for 100+ platforms like Shopify)

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All in All: 

A cost comparison between in-house fulfillment and using a 3PL can vary widely based on various factors.

These factors include the volume of orders, package dimensions/weight, shipping destination, and more. 

However, 3PLs have pre-negotiated rates with major carriers, ensuring that business owners end up saving between 20%-52% on their logistics spending.

Further, you can know your exact costs before launching with a free Shipping Cost Analysis to help you decide.

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4. Benefits of Inhouse vs. 3PL

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Third-Party Logistics Give Scale & Expertise but Also Requires Trust & Accuracy

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Onboarding with a 3PL may feel like treading open waters, but it can lead to experiential, long-term benefits. Partnering with a trusted 3PL like Atomix can give you peace of mind, allowing you to rest assured knowing your product is being handled with utmost care.

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‍Advantages

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There are many advantages to partnering with a 3PL. 

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Budgeting for in-house shipping includes costs for maintaining enough infrastructure, complying with state and national labor standards, hiring, training and maintaining staff, and software development and licensing just to name a few. 

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But! When you work with a 3PL, all of those concerns are outsourced to them instead of the owner. 3PLs are champions at shipping and inventory management.

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3PLs offer automated order processing through tech integration and dedicated personal support for easy ecommerce shipping. 

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Customers buy directly from your website, and the order goes directly to the 3PL. This will save you time and energy you can use to focus on developing your brand. Additionally, 3PLs maintain each brand’s inventory management and customer support for shipping throughout the end-to-end fulfillment process.

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3PLs like Atomix take the traditional values of a trusted partner to the next level. Let’s learn how below!

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5. What to Look for in a 3PL

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Communication 

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By combining the hands-on oversight with Slack-first communication similar to your current team’s processes with the scale, expertise and freedom of outsourcing fulfillment, ecommerce brands can experience a new type of scaling for their brand(s).

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Scaling your brand is facilitated by tailoring custom processes with the Atomix Team, specifically for your brand, and is then managed by our unique, dedicated pod model.

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‍Now, brands can experience effortless scaling while accessing affordable 2-day delivery with simple software and a dedicated team!

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‍At Atomix, we know how important trustworthy fulfillment is, and we ensure reliable shipping logistics to set your brand up for success. 

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We take the 3PL model one step further by implementing our proprietary Micro-Pod Platform. Our Micro-Pod platform is purpose-built for independent brands, designed to help increase productivity and profitability by eliminating complex processes and costly operations.

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‍Our Micro-Pods are, in effect, “warehouses within warehouses.” 

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Each Pod has a dedicated Pod Manager responsible for their Pod’s 3-10 brands. They are responsible for tracking, shipping, and stocking your products. By keeping operations confined to these micro-pods, you are given full control over your inventory. With Atomix, you get hands-on supervision over your business, bridging the gap between in-house and 3PL fulfillment services.

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Atomix built the Micro-Pod Platform to provide founders and business owners with the resources of a fulfillment partner, while adding a uniquely direct interface with your outsourced fulfillment. You have more control over shipping yourself, without the hassle of warehouse and labor management. At Atomix, we treat your business like it’s our business!

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Ready to scale your eCommerce brand? Reach out to Atomix today! 

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