Costs are tight in fulfillment, meaning you have to save money wherever you can. If it’s difficult to pinpoint where to cut costs, consider outsourcing your warehousing and distribution as a catch-all solution to save money. Here are some reasons why outsourcing can be the cost-efficient answer.
1. Reduced Capital Investment
You might have the desire to do your own warehousing or own your own warehouse/storage unit, but with the fees for warehouse and fleet management, security, temperature controls, and other related costs, you may want to think twice. Having a third party handle it for you can save you money on all these charges.
2. Eliminate Labor Issues
When you do your own warehousing, labor costs and personnel issues come with the territory, which can be a big headache professionally and financially. In these instances, you’re better off having another company with a positive reputation and related experience deal with it.
3. Increase Customer Satisfaction
Whenever you take on more work for yourself, you increase the chances of making a mistake. And regardless of the type of error, you will be held responsible, damaging your business’ reputation. Instead, focus on areas where you’re skilled or that need more attention, and leave the rest up to another warehousing company.
4. Fluctuations in Seasonality
There will be multiple rush periods during the year, the most notable being Christmas. And whenever a rush hits, you have to train and pay additional employees, as well as pay to rent any necessary gear. And then, when the rush ends, you have to get rid of both the temp workers and the gear. A good warehousing and distribution company, however, will have the means to handle these chaotic periods for you, all with personnel and tools they already have in-house.
5. Experience and Expertise
You know what you’re good at within the bounds of your business, but you also need to be realistic about what your weaknesses are. Even if you get ambitious and try to improve the likes of your internal warehousing solutions, you are going to spend a lot of money and/or time doing so. On the other hand, a professional warehousing firm already has the technology and personnel in place, as well as the required expertise.
6. No Worries about Warehouse Security Issues
There are numerous health and safety compliance matters that need to be addressed when running a warehouse. This includes elements like specialist training, certifications, equipment availability, and other matters. Health and safety is understandably important and highly justified, but implementing the various measures required can feel extremely cumbersome alongside other managerial tasks. Outsourcing warehouse fulfillment operations gives you access to the third-party’s own specialists and its existing safety infrastructure. Even if, for some odd reason, they aren’t already in compliance with safety rules, the methods for correcting this are already in place and can be harnessed more easily.
7. Flexibility on Warehouse Leasing Terms
Many businesses have seasonal fluctuations in customer demand or may otherwise see their inventory needs wax and wane throughout the years. When running your own warehousing operation, this can lead to situations where you are left paying for shelves that either hold slow-moving stock or are left empty because there simply isn’t enough customer demand to justify their use. Outsourcing your warehousing to a third party helps alleviate this matter since you will only be paying for the space you actually use. This means you can easily scale your storage space up and down throughout the year without having to worry about wasted funds.
8. Most Suitable Distribution Location
Every business ships to different customers, but the needs for warehousing and distribution-center locations are generally consistent. Ideally, you want easy access to major highways, ports, airports, or large urban areas in order to minimize the amount of time it takes to get products from your warehouse shelves to the customers. Third-party warehousing companies tend to have their premises in locations that are perfect distribution points for businesses to use. Outsourcing lets you take advantage of these ideal locations for more efficient distribution arrangements.
9. Reduces Cost of Purchasing Additional Warehousing Equipment
A lot of attention is given to the fact that outsourcing your warehouse fulfillment needs lets you save on space and property costs. However, outsourcing also means you don’t need to spend as much on all of the associated equipment. Pallet racking, safety barriers, mezzanine floors, forklift trucks, and more are often already on hand and provided by the warehousing company you outsource to. Since each of these elements require regular maintenance and servicing—operations with their own associated costs in and of themselves—some companies have found saving on equipment alone to be enough to justify outsourcing.
10. Lets You Focus on Your Core Business
Your business is in retail, e-commerce, export, or some other sector of the economy. This is where your livelihood comes from, where your attention is most needed, and where your managerial skill is most effective at growing your operations. Simply put, you are not in the warehousing business and you should not have to invest so much of your time managing what is effectively “storage space” for your products. Being able to delegate warehousing tasks to a third party not only frees up funds that can be reinvested into your business, it also lets you redirect your time and energy into your main operations and actually run your business.
There’s nothing wrong with getting the fulfillment assistance you require, especially when you can save money. Look to another warehousing firm to get the help you need.
Need solutions to your product fulfillment problems? APS Fulfillment, Inc. has the knowledge and services to make your direct mail and product fulfillment ventures more successful. Contact APS Fulfillment, Inc. by e-mail at [email protected], visit their web site at www.apsfulfillment.com, or phone at (954) 582-7450.
