The health and beauty industry generates $500 billion in sales each year, but in the wake of a global pandemic, consumer preferences are changing. Some brands, like Sephora are reporting e-commerce sales twice as high as their pre-COVID-19 levels, with 30% growth. Customer foot traffic at essential retailers, however, is down, causing in-store revenues to plummet.
As sales for beauty products fluctuate, the pandemic has proven online retailers will dominate in years to come. Knowing this, it’s critical to have a process in place to fulfill orders fast. But if critical team members (say the owner) are performing any function of pick and pack for your business, the fulfillment process will not be profitable.
When you partner with a health and beauty fulfillment partner, you send them your inventory. Once received, they store it on the shelves of their warehouse. Each time a customer places an order, the products are picked and packed from their respective locations, and shipped out in a timely manner. If an order is exchanged or returned, your fulfillment partner handles that as well, so you don't have to.
But that’s just a quick overview of all the services you can expect. To give your fulfillment process a facelift, continue reading below to learn how outsourcing can boost your bottom line.
What items can be fulfilled?
There are several categories of products within the health and beauty industry. So, you may be wondering what products can and can’t be fulfilled.
Below is a list of items that most partners can fulfill. Anything deemed hazardous will not be fulfilled.
- Hair care accessories
- Makeup supplies
- Skincare products
- Vitamins and supplements
To ensure product quality, some partners offer temperature-controlled fulfillment warehouses to keep items safe from variations in humidity levels. However, most beauty products do not require this.
What services come with e-commerce fulfillment?
Most fulfillment services are standard across industries. The health and beauty industry is no exception.
Look for a partner that offers these services when vetting your options:
- Integrate: Before a partner can receive your products, they must get your storefront connected to their software. By integrating the two systems, your team can keep track of all the moving pieces required to fulfill orders.
- Receive: Following the integration, the partner must receive your inventory. This is the process of accepting and managing your inventory at their warehouse, placing the products on shelves and entering them into your systems.
- Store: Once the fulfillment partner has received your inventory, they’ll store it at their warehouse.
- Process: When an order is placed, the fulfillment partner will process it. Note, there must be inventory on-hand to start the process. Then, an order is fulfilled.
- Pick and Pack: Here, products are quickly picked from their respective location in the warehouse and packed into the proper shipping package for each order.
- Ship: Finally, they’ll ship your products to customers.
Note, one of the most important services a fulfillment partner can provide is inventory management. This includes monitoring inventory levels to prevent a shortage or surplus stock. If you run out of stock on a high-demand product, you risk losing potential customers to the competition. On the other hand, if you have too much inventory on hand, you risk paying too much for storage–or worse–having outdated products.
A good fulfillment partner will have an organized inventory management system that integrates directly with your e-commerce platform to ensure you have just enough inventory. They’ll also help you prepare for seasonal fluctuations and product launches, which is important given how the pandemic has impacted the industry, with many big retailers offering discounts up to 40% off to move unsold inventory.
How will outsourcing boost my bottom line?
When you have critical team members fulfilling products, they aren't focusing their efforts on growing the business. That is a problem, especially as your business scales.
For in-house fulfillment to work properly, you need to consider the following:
- Purchasing warehouse space.
- Employing and training staff.
- Buying equipment.
- Managing inventory.
- Investing in the right software.
- Paying for insurance.
By having someone else handle these areas, you give yourself the freedom to focus on more productive and profitable tasks. You can place your attention on market research and customer service to help grow your health and beauty business. In turn, you're cutting out expensive costs.
When is the right time to outsource?
At the end of the day, it’s really up to you. Some common signs that often lead to outsourcing include:
- Running out of space to store inventory. A fulfillment partner dedicates space in their warehouse to store your inventory, so you don’t have to purchase extra storage or employ additional staff as more orders come in. As you grow, so can the space in which you occupy their warehouse.
- Spending too much time on training employees. If you're constantly having to train and re-train employees on the order fulfillment process, then it’s time to outsource to streamline this step.
- Hiring more people to keep up with demand. An experienced team of pickers and packers can skillfully manage a high volume of orders — ensuring they are sourced quickly, packaged correctly and delivered efficiently. Guided by a well-organized warehouse, in which items are carefully placed for minimal travel distance, a pick and pack partner knows how to swiftly move a customer order through every stage of the fulfillment process.
- Failing to fulfill orders accurately. If you notice your order accuracy rate lowers as your business scales, you may want to look into a partner to assist with areas, like pick and pack fulfillment. Many pick and pack partners take quality assurance measures to ensure what was ordered is what was picked. This includes checking everything from the order to the packaging to the label before shipping it out.
- Running out of stock. A fulfillment partner can provide you with real-time insights to ensure you never have too much or too little inventory.
- Confusing technology. If you’re using disparate systems that don't have direct integrations, you're probably spending too much time on manually logging orders and returns. A fulfillment partner can directly integrate your systems with their software to automate data entry and transfer.
- Paying too much for shipping. A fulfillment partner with a global distribution network can often get volume shipping deals—deals you may not be able to get on your own. As a result, you can instantly save on shipping by working with a fulfillment partner.
Other signs include angry customers as a result of damaged or delayed products. If you can’t keep up with orders, exchanges and returns, it’s probably time to outsource.
Give Your Fulfillment Process a Makeover With GLF
With 20 years of experience in health and beauty e-commerce fulfillment, GLF takes pride in offering personalized solutions that sync with your processes. Our goal is to help your business grow, which is why we work with many small- to medium-sized businesses. To get started, contact us today.