30 June 2021
Going global: how to build and maintain an effective fulfilment network
Thanks to globalisation, it has become easy for businesses to market their products to a worldwide audience. Social media and digital advertising have served as a platform for internationalisation, and businesses have capitalised on this opportunity. There are a number of motivations for overseas expansion – larger market share, diversification and increased revenues, to name a few – but none of these are possible without an effective fulfilment network.
In this blog, we’ll explore the different approaches a business can take to global logistics. We’ll also explain the importance of establishing an effective fulfilment network, and the requirements for seamless cross-border commerce.
What are the challenges of global fulfilment?
If consumer demand lies predominantly in a nearby region, say Europe from the UK, businesses could potentially ship directly from their UK headquarters. This could be an attractive proposition, especially for smaller organisations, as it offers relative control of the operation. However, it has its downsides.
As a brand’s overseas presence grows, an influx of orders could result in a strain on the workforce and hinder productivity. If a business taps into other continents that are further afield, shipping items individually will lead to higher costs for the consumer, which can eliminate all demand for the product. Also, the business is likely to face the challenges that come with the complexities of overseas trading, such as customs checks, taxation and duty costs.
Alternatively, businesses could build their own distribution centres in international customer hotspots. There are benefits to owning the supply chain directly – but it naturally brings it own challenges.
Firstly, it requires huge investment in a premise, which will need to be maintained throughout low and high peak seasons. It will also require additional investment in staff - securing talent overseas and embedding them into the company’s culture is another key consideration, as well as increased overheads.
Lastly, adding more premises into your network will require an upgraded IT system to cope with a larger supply chain, leading to further costs.
What’s the best way to ship overseas?
Outsourcing global operations and logistics can help to avert these challenges. Businesses that work with fulfilment partners do not have to front the costs of a distribution centre or staff, and instead pay flat fees dependent on the amount of inventory held and number of orders processed. This is especially beneficial when there is a slowdown, or for businesses that have a cyclical sales pattern.
Aside from the cost benefits, fulfilment partners make it easier to deal with cross-border challenges and differences in labour markets, saving invaluable time. There will be less of a burden on the logistics team and senior management, allowing them to instead focus on growing the business strategically.
A global fulfilment network is also beneficial to the customer. Near-sourcing results in faster delivery times and simpler returns management, which is likely to increase the number of repeat customers and improve customer service ratings, not least by aligning localised payment and delivery options at checkout.
What to consider when building a global fulfilment network
To save unnecessary costs, a company should assess where there is healthy demand from consumers and locate fulfilment centres in prime locations. Businesses can do this by analysing their delivery patterns, researching their competitors and forecasting future sales growth.
Secondly, the fulfilment centre must be at the forefront of innovative supply chain technology, offering capabilities such as end-to-end visibility of the supply chain, insights and data, and automation of inventory and shipping management.
Lastly, the operation must be able to grow in-line with your business, as your progress could be impeded by insufficient warehouse space.
Why you should work with THG Ingenuity
THG Ingenuity offers brands an end-to-end solution to direct-to-consumer ecommerce with a proven track record supporting some of the world’s largest brands with their global fulfilment.
Our Global Fulfilment network consists of 16 global distribution centres and over 185 courier integrations, enabling seamless delivery to more than 200 global destinations. THG Global Fulfilment encompasses every aspect of product delivery, from manufacturing to delivery to your customer’s front door.
In 2020 THG Ingenuity invested in a proprietary air-freight solution in partnership with Singapore airlines, THG Air, offers clients reduced global shipment times across the APAC region, improving network efficiencies for our partners. THG Delivered, our end-to-end delivery and tracking platform, gives our brands access to over 1,200 routes to customers globally, with each delivery following fully branded communications, keeping customers engaged throughout the delivery process.
If you want to know more about global fulfilment at THG Ingenuity, get in touch.