{"id":8947,"date":"2019-07-02T07:19:58","date_gmt":"2019-07-02T14:19:58","guid":{"rendered":"https:\/\/www.hollingsworthllc.com\/?p=8947"},"modified":"2019-08-19T13:18:24","modified_gmt":"2019-08-19T20:18:24","slug":"how-outsourcing-your-supply-chain-can-save-your-online-retail-business","status":"publish","type":"post","link":"https:\/\/www.hollingsworthllc.com\/how-outsourcing-your-supply-chain-can-save-your-online-retail-business\/","title":{"rendered":"How Outsourcing Your Supply Chain Can Save Your Online Retail Business"},"content":{"rendered":"

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In 2000, Toys “R” Us signed what seemed like a lucrative deal. The toy giant would have exclusive rights to sell toys on the growing e-commerce site Amazon for a 10-year period.<\/p>\r\n

\r\n\r\nJust 17 years later, Toys “R” Us went bankrupt, while Amazon has flourished into one of the largest companies in the world<\/a>.<\/p>\r\n

\r\n\r\nWhat Toys “R” Us hadn’t foreseen at the time was the future of sales. In the first quarter of 2000, e-commerce sales totaled $5.72 billion<\/a>. In the first quarter of 2019, e-commerce has accounted for $137.75 billion in sales. E-commerce sales have consistently grown by more than 10% year over year.<\/p>\r\n

\r\n\r\nInstead of seeing the potential growth of e-commerce, Toys “R” Us lazily stuck to brick-and-mortar sales, letting Amazon scoop up the online traffic. Ignoring the importance of e-commerce killed the toy giant.<\/p>\r\n

\r\n\r\nToday, e-commerce makes up over 10% of all sales<\/a> in the United States. But having an online presence isn’t enough. Logistics has increased the efficiency of supply chains to new levels, and businesses are seeing more efficient shipping than ever.<\/p>\r\n

\r\n\r\nHad Toys “R” Us chosen to adopt a better supply chain model and hired the right third-party logistics provider<\/a> (3PL), they might still be the toy leader in the U.S.; or, at the very least, they might have avoided bankruptcy.<\/p>\r\n

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Why Outsource?<\/h2>\r\n

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Businesses, especially scrappy startups in the e-commerce space, pride themselves on being able to do everything. So, the idea of outsourcing supply chain functions can be a point of contention.<\/p>\r\n\r\n

But outsourced supply chains can aid your business in numerous ways, from cutting costs to making customers happier. What’s more, 91% of businesses<\/a> that outsourced their supply chain reported a positive and successful relationship.<\/p>\r\n\r\n

So, the question might not be “why outsource?,” but “how can I find a successful supply chain partner?”<\/p>\r\n

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How Outsourcing Logistics Improves Your Business<\/h2>\r\n

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Any business that has a supply chain, or even sells products online, can benefit from outsourcing<\/a>. Odds are that your business doesn’t employ leaders in supply chain management and theory, nor does your business have strong connections with suppliers, its own warehouses, its own distribution fleet, or all the equipment and personnel required to keep an entire supply chain running and scalable.<\/p>\r\n\r\n

Efficiency is why businesses outsource to a 3PL. Here are some of the ways outsourcing logistics can improve, and potentially save, your business.<\/p>\r\n

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[Related: <\/strong>Infographic: An Essential Guide to Order Fulfillment<\/strong><\/a>]<\/strong><\/p>\r\n

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Increased Delivery Speed<\/h3>\r\n

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Consumers are expecting goods to be delivered faster than ever<\/a>. The increasing efficiency of supply chains has only fueled the increased expectations.<\/p>\r\n

But offering just-in-time (JIT) delivery<\/a> can be costly for businesses that choose to run their own supply chains. Outsourced logistics can keep e-commerce businesses competitive without stretching their finances too thin.<\/p>\r\n

3PL partners also open up other shipping and delivery services, such as kitting<\/a>, and can use their network of warehouses to facilitate two-day shipping.<\/p>\r\n

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Reduced Costs and Boosted Profits<\/h3>\r\n\r\n

It may seem counterintuitive, but outsourcing your supply chain can actually reduce your operating costs while boosting profits. In fact, 75% of businesses<\/a> that outsource their supply chains reported lower costs.<\/p>\r\n\r\n

Costs saved from outsourcing logistics include:<\/p>\r\n

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