A new survey from eCommerce solutions provider Radial reveals that 70% of fast-growing retail brands still handle fulfilment in-house, despite the growing challenges of scaling operations and meeting consumer expectations for speedy delivery.
The study, which surveyed 200 retail decision-makers, found that 59% of brands operate within a single facility, making it harder to expand into new sales channels or adapt to shifting demand. Nearly half (47%) of respondents cited difficulties in scaling their fulfilment operations, while 40% pointed to outdated technology as a major roadblock.
However, as brands cross the $50 million revenue mark, outsourcing to third-party logistics (3PL) providers becomes the norm. Among companies earning $100–150 million, 72% now rely on 3PLs, jumping to 76% for those in the $150–200 million range.
While brand websites remain the dominant sales platform (72%), many sellers are exploring Walmart and Amazon, even as some pull back due to high fees and strict requirements. Emerging channels like TikTok Shop, Temu, and Shein are on the radar but remain secondary priorities.
Transportation costs are another major hurdle, with unexpected surcharges affecting 45% of retailers. The impact is even greater for brands under $50 million in revenue, as they face higher base shipping costs and limited negotiating power with carriers.
Tom Schmitt, CEO of Radial, said: “Our research shows that as brands near the $50M revenue mark, outsourcing to a logistics partner is much more common, showing there is an inflection point where partnership with a trusted 3PL helps unlock efficiencies and future-proofs operations against the dynamic retail landscape.”