Does Your Fulfillment Vendor Have Industry-Specific Experience?

Some companies are confused when it comes to selecting their fulfillment vendor. Many times, they think that the company needs to be knowledgeable about their industry. And it’s understandable. For any specific task, especially one that is core to your business, would most certainly require someone that’s knows your industry. It would in fact require a company that is IN your industry and knows it quite well. But with third party outsourcing for fulfillment type activities, its different. Think about it: Whether you are talking about kit assembly, product packaging or even answering phones, most fulfillment activities are simply labor intensive type tasks.

What Types of Processes can be Fulfilled by an Outside Company?

There seems to be no end to what you can outsource these days. From labor to space needs, call centers to product assembly, it seems every company out there is outsourcing something. Some outsource quite a bit, doing very few core activities themselves. In fact, some virtual companies take it to the extreme and outsource everything and just take a cut of all the services. Pretty smart, huh?

Why is Outsourced Fulfillment Such a Good Idea?

At the center of every business, there exists a few core processes. Whatever you do to actually make a sale is usually a part of this. For a software manufacturer, it could be writing the code. For a magazine, it could be researching, writing, and editing the stories.  It’s these activities that generate 70% or more of revenue. So the question becomes, why do the rest? If 70% of the activities that you spend time on only generate 30% of your revenue, there is no need to do them. Some would in fact argue that you are not being very wise if you continue to do them.

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