When looking for third-party warehousing solutions, your options will come in one of two types: contract or public warehousing. On the surface, the two can appear interchangeable and it can be hard to tell what public warehousing is when compared to contract options. Each is run by a third-party operation that offers storage space, better shipping rates, seasonable scalability, value added services, and so on.
The main differences arise when looking at where each warehouse type places the most focus and how this shapes its relationship with clients. Public warehouses are ostensibly meant for short-term rentals even though they can and are used by companies as a long-term logistics and fulfillment solution. Contract warehousing is designed for long-term use of both space and services. It is from this core difference that the main disadvantages of public warehousing become apparent.
The short-term focus of public warehousing means that many included features, such as inventory management systems, are standardized and provided without major adjustment to each client. Depending on your business, this may not be a problem. One of the cons of public warehousing, however, is that should you already be using an incompatible system, or if your business has inventory needs or practices the assigned IMS doesn’t account for, you will be out of luck. Sure, you’ll be able to bring your preferred system along with you, but there’s no guarantee it will be able to communicate properly with the systems used by warehouse staff.
With contract warehousing, elements like communication infrastructure are gone over and established beforehand. The systems you use, and how they will be able to communicate with the warehouse, will be laid out during the contracting process. Since contract warehouses operate on longer-term relationships, there is more incentive to accommodate and support individual needs rather than take a blanket approach.
Both contract and public warehouse companies allow clients to rent space from a shared environment. The amount of space can be scaled up or down as needs dictate. This can, however, create situations where you may need extra space but none is available since it is all being used by other clients. The risk of this is highest during peak seasons—exactly when you can least afford to run into the problem.
As with the communication issue, contract warehousing avoids this problem due to the contract process itself. You can lay out how much space you wish to use during each part of the year in order to preserve the ability to scale your operations and ensure adequate room. Alternatively, you can arrange to contract the entire warehouse and use all the space you like. This particular option is not usually available with public warehouses since the short-term focus of their business model makes such prospects too risky.
APS Fulfillment Inc. is a leading ecommerce order fulfillment service company that operates out of Miami, Florida. Our integrative and careful approach will ensure that our clients’ products will get to their destination quickly, affordably, and in top condition. We’ve stored, sorted, delivered, and quality-assured products of all shapes and sizes for all kinds of companies across a wide variety of industries. Contact us by phone at 954-582-7450 or reach out to us by email at [email protected] for more ways our fulfillment services can support your ecommerce business.