What’s the real secret to succeeding in business? Maximizing revenue with minimal incremental costs. How does a business accomplish that goal? Here’s your answer:
High Scalability Business Model = Unlimited Growth Potential
The fact is, if your business doesn’t have the capability of scaling, investors won’t invest, staff will be overwhelmed, and customers won’t be satisfied. You may have a great product that people want but if your company is always playing catch up, it is not going to get very far very fast.
By using a fulfillment center at the core of your business model, you will outsource the dirty details of which you know nothing about and don’t have the capability of doing well affordably. Instead, focus your expertise on the development of your business.
Below are five ways a fulfillment center will help you develop a scalable, successful business.
1- Proven Process Technologies
Rather than using inefficient, old-fashioned tactics that waste time and resources when processing orders, fulfillment centers increase efficiency using the following modern technologies:
- Advanced Shipping Notification (ASN): Suppliers notify receivers of shipping information and expected arrival time.
- Vendor Compliance Program: Integration with suppliers in order to achieve the greatest possible throughput.
- Automatic Data Collection: Increase information processing and forecasting capabilities via barcodes and radio frequency identification.
2- Production Automation
A business that is labor intensive is not scalable and if there are bottlenecks in your production line, orders will be delayed and growth will be hard to obtain. However, automated production offers a smooth operation which supports growth without growing pains.
With a fulfillment center, economies of scale can be employed, putting higher profit margins within reach.
3- Order Fulfillment and Returns
Customers should be the highest priority of every business but if orders take too long to ship or are incorrect, your business will have a hard time reaching high levels of customer satisfaction. These small mistakes can have big repercussions. Too many poor customer reviews will quickly translate into you owning a struggling business.
Returns happen but when returned orders are managed and processed quickly and correctly, you avoid potential headaches and your customer will be pleased.
4- Inventory Management
By maintaining the integrity of your inventory, you will be better able to do the following things:
- Utilize dynamic pricing to influence demand
- Realize higher forecast accuracy
- Lower inventory and distribution costs
- Apply enterprise-wide rules and processes
- Modify fulfillment processes as your business evolves
- Decrease order complexity
5- Staff Maximization
With a fulfillment center, your company’s overhead costs will be reduced due to only requiring minimal staff on the payroll. Also, seasonal fluctuations in orders won’t affect the number of employees you have or the burden placed on them.
Allowing your staff’s focus to shift toward innovation and customer service rather than order fulfillment, you are using your best resources to your business advantage. By leveraging outside resources, you can hire the right people for the right job and bank on their ability to help you achieve company goals.
When your business is built with growth rate as a foremost thought right from the beginning, scaling will come naturally.
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