The health and beauty industry has seen explosive growth in eCommerce over the past few years. In 2023, the global market for beauty and personal care eCommerce was estimated to be worth around $119 billion and is forecast to hit $184 billion by 2028. That being said, order fulfillment and shipping in particular can become a bottleneck as you try to scale. Handling fulfillment in-house may work initially, but can quickly become complex and expensive as order volumes increase. The costs, effort, and expertise required to do fulfillment should not be underestimated.
That’s why many successful health and beauty brands choose to outsource fulfillment to a distribution center in their growth cycle. The right third-party logistics provides the infrastructure, capabilities, and experience to help your brand scale efficiently.
Challenges of Scaling Health And Skincare Products’ Order Fulfillment In-House
A survey revealed that 52% of U.S. consumers had purchased health and beauty products from a D2C brand in 2019, and direct-to-consumer sales are expected to account for nearly one-third of total retail sales by cosmetics companies by 2026. However, these brands face several challenges when scaling order fulfillment in-house.
Here are three significant ones:
- Temperature-Sensitive Storage: Many health and beauty products, like skincare items or supplements, require specific temperature conditions to maintain their effectiveness. Ensuring a climate-controlled environment that can adapt to these needs is a significant challenge.
- Expiration Date Management: With products that often have limited shelf lives, managing inventory to prevent expiration is complex. It requires efficient stock rotation and tracking systems to ensure products are sold on time.
- High SKU Complexity: With a vast array of product variations in shades, sizes, and finishes, managing inventory becomes complex. It’s essential to have a storage and picking strategy that accounts for expiration dates to minimize losses.
What are the Benefits of Outsourcing Fulfillment?
As your health and beauty brand takes off, fulfilling orders in-house can become a major bottleneck. Outsourcing order fulfillment allows you to leverage an established infrastructure and expertise.
1. Streamlined Operations for Growth:
- Efficient Order Fulfillment: Your partner’s expertise in handling high volumes of diverse products, from skincare to supplements, ensures seamless order processing, picking, packing, and shipping. This allows your team to focus on core brand development and marketing activities.
- Scalable Infrastructure: With the health and beauty eCommerce market projected to reach $449.6 billion by 2027, a distribution partner’s established warehousing network is crucial to adapt to your growing order volume, ensuring timely delivery even during peak seasons.
- Reduced Overhead Costs: Partnering with a warehouse service can translate into significant cost savings, as it eliminates the need for investing in additional warehouse space, staffing, and equipment.
2. Enhanced Customer Experience:
- Faster Delivery: Strategic warehouse locations and efficient shipping networks enable your partner to deliver orders quickly, which is vital as 12% of consumers cite delivery speed as a key factor when purchasing health and beauty products online.
- Accurate and Reliable Fulfillment: Minimize order errors and delays through the partner’s expertise, which is essential in an industry where 11% growth in orders year-over-year has been observed.
- Real-time Tracking and Visibility: Offer transparency and peace of mind throughout the fulfillment journey, as both you and your customers can track orders in real-time.
3. Expertise in Handling Delicate Products:
- Specialized Storage and Handling: Health and beauty products often require specific storage conditions. Your partner ensures proper practices to maintain product integrity, crucial for items sensitive to temperature and humidity.
- Compliance with Regulations: They understand industry-specific regulations, such as those for products classified as hazardous goods, and implement compliant practices to ensure safety and reduce liability.
Read Also: Signs you Need a New Canadian Fulfillment Partner
What are the Key Capabilities to Look for in a Fulfillment Partner?
When evaluating potential distribution partners, look for these key capabilities:
1. Warehousing and Inventory Management
Your fulfillment partner should have sufficient warehouse space and infrastructure to accommodate your inventory needs now and in the future. They should have robust systems for tracking stock levels and managing inventory across multiple locations. Accurate inventory counts and visibility ensure orders are fulfilled efficiently and inventory costs are kept low.
2. Picking, Packing and Shipping Orders
Look for fast, accurate order processing and a variety of packing and shipping options. The partner should have trained staff and optimized processes to pick, pack and ship orders quickly and correctly. They should be able to integrate with your systems and adapt to seasonal spikes in order volume. Offering multiple shipping carriers and delivery speed options allows you to meet customer expectations cost-effectively.
3. Returns and Exchanges
An experienced Canadian fulfillment center will have systems in place to quickly process returns, exchanges and refunds. They should inspect returned items and restock usable inventory. Streamlined reverse logistics processes create goodwill with customers and prevent losses. The partner should also offer customizable return policies to meet your business needs.
Choosing a fulfillment partner with scalable warehousing, optimized order fulfillment and returns capabilities ensures you can keep pace with business growth while maintaining high service levels. Investing in the right partner sets your eCommerce brand up for long-term success.
4. Order Accuracy and Attention to Detail
It’s crucial to partner with a fulfillment provider that has rigorous quality control procedures and checks in place to ensure 100% order accuracy. This includes verifying that the right items and quantities are picked, packed, and shipped for every order.
For health and beauty items, it’s also important to select a partner that has advanced lot tracking and recall capabilities. Should any issues arise with products that require a recall, you need a partner who can quickly identify which inventory was impacted based on the lot numbers and production batches. This ensures any recalled products can be effectively contained before reaching customers.
The reputational damage of sending incorrect or defective products to the health and beauty industry can be immense.
5. Flexibility and Integration
Your fulfillment partner should provide the flexibility to customize their fulfillment processes and integrate with all your sales channels and backend systems. This enables seamless order processing across channels and gives you a unified view of your inventory and fulfillment operations.
Some key capabilities to look for include:
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Proprietary solution
Your fulfillment partner should have a proprietary solution that allows integrating their platform with your eCommerce store. This allows orders to flow automatically between systems.
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Multi-channel order management
They should be able to receive and fulfill orders from all your sales channels – online store, Amazon, eBay, social platforms, brick-and-mortar retail, etc. This provides a centralized view of all orders in one dashboard.
- Custom labeling and packaging
They should be able to print customizable labels, inserts, packaging slips, etc. as needed for your orders and products. This allows consistency with your brand look across all packages.
6. Shipping Speed and Options
As your orders increase, your customers will expect reliably fast shipping. Partnering with a fulfillment provider that offers a wide range of shipping speeds and options is essential.
Your distribution center should be able to:
- Meet common delivery expectations like 2-day shipping
- Integrate with major carriers like USPS, FedEx, and UPS to leverage their networks
- Offer economy shipping for cost-conscious shoppers
- Provide expedited shipping for quick delivery
- Ship internationally to expand your reach
- Offer customers multiple shipping options like next-day air or ground shipping
Read Also: Common Shipping Problems in 2024
7. Scalability and Growth Support
As your health and beauty brand takes off, being able to efficiently scale fulfillment operations is critical.
- You need a partner that can handle sudden sales surges, such as during promotional periods or holiday seasons. They should have the warehousing capacity, labor force, and operational excellence to flex up or down as your order volumes fluctuate.
- When launching new products, your partner should be able to quickly ramp up storage and order processing for those items. Whether it’s adding a dozen new SKUs or expanding your catalog to hundreds, they should make it seamless.
- They should be able to replicate your domestic fulfillment operations internationally as you enter new e-commerce markets. This includes integration with local delivery companies, compliance with customs regulations, duties and taxes calculation, and currency conversion.
8. Data and Reporting
Look for a partner that gives you real-time visibility into inventory and order status across their entire network. You should be able to see how many units of each product you have on hand and view tracking information for orders in process. Real-time inventory visibility ensures you don’t oversell products.
In terms of analytics, your fulfillment partner should offer detailed performance reporting across key metrics like order accuracy, shipping times, carrier performance, and more. Make sure you can break these metrics down in a variety of ways – by product, by location, by time period, etc. The reporting should be customizable and flexible to suit your business needs.
Wrapping Up
As your health and beauty brand scales, order fulfillment can become a major challenge. Outsourcing fulfillment to the right partner provides immense benefits. It allows you to focus on your core business while leveraging a specialized provider’s expertise, infrastructure and technology.
When evaluating potential eCommerce fulfillment partners, ensure they can provide high accuracy, flexibility, fast shipping, scalability and robust data and reporting.
Partner with ShipTop
A fulfillment partner like ShipTop not only ensures high accuracy and flexibility but also provides fast shipping and scalability, all while offering robust data and reporting. This strategic collaboration allows you to focus on your core business and provides your customers with an exceptional experience. Choose a partner like ShipTop to avoid fulfillment becoming a bottleneck in your growth, and instead. We have helped several cosmetics and health brands to surpass all the obstacles that they faced in the past.
Scaling your health and beauty eCommerce brand? Get in touch today with us to discuss your fulfillment needs.