The current harsh economic climate has created an environment whereby it is exceptionally difficult to establish a new business from scratch. Lenders are more cautious than ever to provide start-up businesses with the necessary capital to enable them to establish the infrastructure that is required to begin trading. Moreover, a reduction in disposable income in general has significantly reduced the amount of money that consumers have to spend on any given product. This in term has created tougher competition between companies even in different market sectors.
In view of such a climate it is important that start-up businesses take advantage of every cost saving available in order to reduce the initial investment required to establish the business and to ensure that the business is competitive. One way in which this can be achieved is through outsourcing some or all of the company’s critical processes. For example, by outsourcing a company’s storage and dispatch systems through ecommerce fulfilment a business can remove the need to purchase, maintain and operate extensive warehousing property and specialist dispatch and packing equipment.
Moreover, ecommerce fulfilment can offer considerable savings for businesses that make extensive use of direct website sales. By utilising an outsourced shopping basket and payment processing system companies eliminate the requirement to produce, implement and maintain their own system. Such website infrastructure can be exceptionally costly to develop, test and implement, therefore outsourcing provides an extremely attractive alternative. Tried and tested systems have the advantage of being refined through practical use and modified according to feedback. Moreover, they can be implemented immediately without the time consuming development and testing period. Outsourced website payment infrastructure offers considerable advantages in terms of both time and money to companies who provide direct sales through their website.
By selecting outsourced services businesses do not have to directly employ nearly so many staff as they would otherwise due to the reductions offered by using outsourced storage property and equipment and using outsourced website infrastructure. Company employees would not be required to operate and maintain the storage and dispatch facility and would likewise not be required to design, test and implement website infrastructure. As employees are one of the most expensive outgoings for any business, ecommerce fulfilment offers considerable cost savings when outsourcing services as opposed to providing such processes internally.
By outsourcing critical business processes businesses can enjoy large cost savings over providing the same service internally. The primary advantage is the reduction in initial investment required to setup a new business. This is followed by the time, effort and expense saved by utilising systems that are already in place and ready for immediate use. Moreover, a business that outsources its requirements for product storage, dispatch and website payment infrastructure takes advantage of the considerable experience accumulated by the service company over many years. This means that the client company does not need to begin at the start of the learning curve as regards these processes but can build on existing tried and tested processes.
This article was written by Amy Fowler on behalf of Hallmark Consumer Services. Amy writes on a variety of topics including ecommerce fulfilment and ways to reduce business setup costs.