If you are an auto parts dealer, you will agree that order fulfillment is critical to your business operations. Your business must manage tens of thousands of parts of all sizes and be capable of delivering the right item to the right customer at the right time. There are also specialized requirements regarding the storage, handling, and transportation of these items. Consequently, you may be wondering whether to outsource your auto parts fulfillment to a third-party provider or handle it in-house. Cost is undoubtedly a major factor in this decision, so it is prudent to know what to expect from both options before choosing. Below is a breakdown of internal fulfillment costs compared to a ShipJoy’s order fulfillment.
Develop A Fully Loaded Cost Per Order Analysis
Various expense categories constitute your cost for order fulfillment if you choose to manage your auto parts logistics in-house. Facility costs, direct and indirect labor, and packing material costs are standard expenses to expect. Also, consider whether there are other allocations of cost to fulfillment and what other departments support operations that will not be incurred. Furthermore, find out whether there are additional charges for inbound freight and managing supplies. This way, you can accurately discover how much you will spend to fulfill client orders.
Know Your Overhead Cost Per Order
A key benefit of working with an order fulfillment partner is that SMB merchant company management often focuses on merchandising and marketing to grow the company. Therefore, consider how much time and energy the senior management spends on customer service and order fulfillment and assign a dollar value to it. Then, include this expense as part of your overhead cost for internal order fulfillment. In addition, remember to factor in the costs of infrastructure, IT, communications and servers, internal programming, and many other expenses other departments manage.
Understand Future Costs
Auto parts logistics costs change every year, so you will need to consider how your budget will increase in the years ahead to meet order fulfillment and service level targets. It is crucial to note that every expense, including material, infrastructure, and labor, will determine how much you need to spend. Therefore, monitor market conditions and other trends to draw budgets for these expenses for at least three years.
These budgets will help you accurately compare the costs of internal fulfillment and hiring an order fulfillment partner like Ship Joy. It would help if you had an agile and efficient supply chain to succeed in the competitive car parts industry. Therefore, outsourcing your auto parts logistics to a reliable third-party logistics provider might be the best option for your company.
Select ShipJoy As Your Order Fulfillment Partner
We provide assembly, pickups, inspection, storage, transportation, and other services to auto parts companies and other businesses seeking to outsource their logistics. This way, you can focus on handling your physical storefront while we handle the backend of things. What’s more, our transport and delivery services are competitively priced, reducing your overall expenses.
Reach out to us today to get started!