Warehousing solutions are important for many e-commerce businesses. They are often the only practical way to store large volumes of products and keep them ready to be shipped out to customers. The problem is that warehouses can be big, expensive, and tricky to manage for small businesses. Outsourcing your warehousing needs to another firm is the best approach in these cases since doing so enables you to get numerous benefits while keeping downsides to a minimum.
Benefits of Outsourcing Warehousing
Free Up Your Resources
Almost all businesses with a physical product have some need for storage space. Warehousing for these companies falls under “non-core” operations, which don’t directly relate to how they earn profit. If your business falls into this category, then managing your own warehouse will offer a lot of overhead costs and take up time that could be better spent focusing on your core operations. By outsourcing your warehousing needs, you free up cash, manpower, and time that can go right back into growing your business.
Get Expert Management and Compliance
There are a number of different legal, health, and safety regulations surrounding warehouse work that you need to master in order to properly run your own operation. While important for workers, these rules can be cumbersome for a small business that is navigating them for the first time. Third party warehouse firms, by definition, have been running their operations longer than you and potentially longer than your entire business has existed. They already know the rules and have implemented safety precautions and protocols.
Have Flexibility with Shared Resources
The main reason that third party warehouse firms are often a better choice is because you are not going to be their only customer. These companies provide warehousing solutions to many different companies and costs are shared among all of them. Flexibility in how you rent or lease your space means that you don’t risk paying for space you don’t need—your space can be scaled up or down as your business changes so that you are only paying for what you use.
Avoid Extra Costs
Try and name all the extra equipment and devices needed to run an effective warehouse. Pallet racking, forklifts, and safety barriers are just some of the items you’ll be expected to invest in to properly tackle warehousing yourself. There is also the hiring of staff, HR needs, management tasks, and all the other high-level hurdles. Third party warehouse companies already have all of this covered. They can offer workers who know how to handle daily operations, rushes, new products, or storage changes. This drastically reduces your up-front and ongoing costs for warehousing operations.
Reduce Staff Hiring and Management Costs
Taking on the burden of in-house warehousing can be costly. It means you’d have to find a space big enough to stock your inventory. You’d also need to hire staff to sort the inventory and to pick and pack deliveries. Outsourcing your warehousing needs allows you to delegate these responsibilities to logistics experts. It also gives your business the flexibility to grow while your warehousing costs can be scaled accordingly. The big savings is in the fact that you don’t need to hire additional staff to manage your warehouse.
Low Capital Investment
Outsourcing your warehousing costs means you don’t need to put out any money upfront for equipment, machinery, or any other fixed costs associated with warehouse management. The investment with a third-party logistics (3PL) provider will be made to match the level of services you require from whichever logistics company you choose to partner with. Lower capital investment means more capital for you to put elsewhere.
Increase Customer Satisfaction
Outsourcing your warehousing ensures that your business is partnering with professionals with a proven track record for success. Warehouse management is a key part of your distribution. If it is not handled correctly, orders are shipped late or get mixed up and that leads to poor customer satisfaction. However, you can increase customer satisfaction significantly if you get your delivery system right. That’s the advantage of working with a 3PL provider.
You have to understand the long-term savings of outsourcing your warehousing. The actual storage costs will be lower and so will the cost savings of not having to hire staff, plus the discount on shipping rates you’ll be receiving in working with an experienced 3PL provider. Over time, all of these savings add up to significant amounts.
With all of these savings from investing into an outsourced 3PL provider, you should notice an increase in your return on investment (ROI). Not only will the increase in ROI be monetary, but from the value and quality of work being done if you partner with the right 3PL provider.
APS Fulfillment, Inc. is a specialist in direct mail marketing and warehouse fulfillment and is based in Miami, Florida. We’ve stored, sorted, and delivered products of all shapes and sizes for all kinds of companies. Contact us at [email protected] for more ways third party warehousing and fulfillment services can support and grow your business.