Outsourced fulfillment is cost effective
The reduction of extraneous costs is at the forefront of all good business plans, and if a product of service can be provided to the satisfaction of the consumer for a lower cast than a competitor, that business will generally see the benefits of increased sales. The modern shopping world has embraced technology in a way that provides consumers the ability to find exactly what they are looking for from merchants all over the world, and it also allows them to compare these products based on a variety of criterion including price. If two of the save products are offered from different merchants and there are no distinguishable differences in the customer service levels, then the decision that is made by the consumer is almost always based on price. The merchant that can provide their products for the lowest price will almost always get the sale.
E Commerce was developed in order to provide consumers with the ability to shop from stores that are not within their driving market, and benefit from the reduced costs that are seen when a merchant does not need to foot the bills for the physical locations that were necessary traditionally. Although it is obviously more convenient for a person to shop from their home, there is a certain amount of reduced confidence that happens when a person shops online. Of course they would rather receive their product immediately, but the price reduction makes it worth it for most people to shop online. The decisions are then made by how long it will take the item to be shipped to their door and how much it will ultimately costs them. Shopping on websites from merchants who are not paying for physical spaces was the first step in cost reduction, and fulfillment services are the second.
Third party fulfillment services allow merchants to no longer need to pay for employees who will pack and ship orders from their warehouses. In the past, a merchant had to speculate on the amount of warehouse space that was necessary to fulfill the orders that would come in, as well as the amount of employees that were necessary to process those orders. With the advent of third party fulfillment, merchants can now pay only for the warehouse space they need, and have their inventory managed by the employees of the fulfillment service. The fees that are associated with these services are generally lower than if you pay entirely for your own warehouses and employees, and it also removes the need to gamble on leases and warehouse sizes. Your services can grow or shrink as your sales do, allowing you to be completely virtual. These cost reductions allow you to sell your products without the majority of added expenses that need to be covered, and allow you to be the merchant that is providing the best prices on products when consumers do those comparative searches online. Outsourced fulfillment services save money, which helps to build your business by making you the choice of where to buy.