The Top 6 Reasons to Outsource Your Supply Chain Management

I often hear people say, “I’m just going to start my own business.  That way, I don’t have to answer to anybody or come into the office.”  This usually comes after lamenting about their workload and observing that leadership is often hard to find.  The truth behind small business owners, however, is that everything falls on their shoulders at the end of the day.  They wear many hats – procurement, sales, marketing, customer service, and operations to name a few key roles.  Not to mention needing to be an expert in each of those fields to be successful.

Depending on the industries these hopeful entrepreneurs choose, they’ll need to acquire expertise in various niche areas.  With e-commerce continuing to grow at an exponential rate (thanks COVID), becoming a successful online seller seems like a clear and easy path to wealth.  So now, not only does the protagonist of our story need to have business savvy, but they’ll also have to determine what product to sell, who’s doing to manufacture it, and how to get it from the factory to their customers.

For obvious reasons, keeping all these functions in-house isn’t sustainable or scalable.  Outsourcing your supply chain management empowers e-commerce business owners to expand their product offerings while maintaining that work-life balance we’re all chasing.

6 Reasons to Outsource Your Supply Chain Management

DIY Sourcing Can Be Deceivingly Expensive

Though DIY sourcing may appear to be the most cost-effective option at first, it ends up being more expensive in the long run.  Going with the less expensive option in the beginning can lead to missteps like cargo being rolled or having KQIs that are not sufficiently adhered to.

Unexpected shipping fees and complications in manufacturing leading to re-work have a huge financial impact.  If the quality of your product is less than advertised, this will surely affect your business’s reputation.

Consolidated Communication Management

Each vendor has a different platform preference, and you could easily be carrying conversations across three or four mediums at a time.  WeChat, WhatsApp, and Facebook Messenger are three common texting applications that international vendors use.  Juggling multiple conversations across more than one app can be time-consuming and confusing, making it easier for details to slip through the cracks.

Your supply chain management partner will act as your single point of contact, streamlining the communications.  This serves as an immense time-saver to your team and in turn, offers cost savings to your business.  This also helps reduce any back and forth or finger-pointing between vendors should any step in the purchasing process go awry.

Spend Less Time Working in the Business and More Time Working on Your Business

Time spent working in the business often entails tedious tasks such as managing communications, relaying delays, and rescheduling shipments.

Time spent working on the business allows you to be strategic about its direction and scale the business through marketing efforts, brand expansion, etc.

Access to a Network of Thoroughly Vetted Factories

Marketplace sites like Alibaba may offer “verified” or “gold” suppliers, leading you to believe that they’ve been vetted.  In actuality, factories can pay to have these certifications with little to no verification from the marketplace.

Working with a supply chain management team eases concerns of illegitimate or unreliable factories.  They’ll also have boots on the ground which can act quickly on your behalf while understanding how to successfully navigate the business culture of your factory.

Expertise in all Areas of Supply Chain

Your supply chain management partner will have expertise in and assist you with:

• Packaging recommendations
• Shipping and logistics coordination
• Thorough quality control inspections
• FBA preparations
• FBA warehousing requirements

Straightforward Pricing

Marketplaces will reflect very low, click-bait pricing to draw in Sellers.  However, as you follow the prompts and move through the funnel, items such as price per unit and MOQs increase.  This results in the Seller spending more than originally led to believe.

The alternative to this would be to have a professional read between the lines with factory management and get a straight-forward pricing up-front.

Final Thoughts

In summary, building a relationship with a supply chain management company can save you time and money, and empower you to expand your business by leveraging their factory network’s capabilities, expertise, and expanding your product offerings more easily.