Running a business is hard work. You have a million things to manage and keep track of and there are millions of decisions to make. But there are some ways to make your life easier. One solution used by millions of eCommerce retailers is outsourced warehousing.
Using a third-party logistics company to handle the storage and distribution of your inventory can help you save money and free up time. This way, you’ll be able to focus on the core operations of your business.
You’ll also benefit from specialized services that provide accurate real-time data to help you strategize and improve performance. All of this while skipping the traditional approach of hiring staff to do the manual handling of “picking and packing” your orders.
Outsourced warehousing and fulfillment services can lead to an increase in efficiency, a reduction in overhead costs, and a rise in customer satisfaction.
1. Simplified Workflow
Think of it as placing some of the responsibilities in someone else’s very capable hands. If you’re not constantly thinking about the logistics of coordinating between shippers, transloaders, and other providers, you’ll have more time to focus on other aspects of your business.
By using third-party logistics you won’t have to worry about things like tracking systems, customer services, international fulfillment services, or the volume of inventory you can realistically handle. Outsourcing your warehousing and fulfillment can really help simplify your workflow by handling some of the most complicated aspects of a retail business.
2. Get Expert Management and Compliance
One thing people forget is that a warehouse isn’t just a big building where you store stuff until you need it. In fact, most often than not, storage space is not your main priority for warehousing and distribution companies. In order to run a warehouse, you’ll have to focus on providing a safe and healthy working environment for your employees.
There are a lot of legal and safety regulations to keep up with, and these are usually a huge complication in regard to smaller business shipping and more so if you don’t have any prior experience.
Outsourcing warehousing means more than accessing warehouse space and inventory management services. Collaborating with third-party warehouse firms can save you a lot of headaches.
Companies offering warehousing and fulfillment solutions are consolidated businesses that have a firm grasp of the rules and regulations of their operation. Chances are they’ve been around far longer than your own business, and that they’ve been offering fulfillment services for tens or even hundreds of other organizations. This means that they know what they're doing, and they have experience and management skills you’ve yet to gather.
3. Lower Risk
Running a business will always be a bit risky and there is always a chance of disruptions in the supply chain. A third-party logistic provider can help mitigate some of the problems you might encounter by using technology to constantly monitor your inventory from your supplier to your customers. This will allow you to come up with fast responses and plan for any unforeseeable disruptions.
A third-party warehousing company specialized in delivery operations will be able to use its business intelligence technology to identify and evaluate your risk exposure. They can also use supply chain planning to help optimize the fulfillment service, determine transportation costs, and develop contingency plans to ensure a lower risk to your supply chain.
4. 3PLs Offer Innovative and Impactful Solutions
Third-party logistics have some innate advantages over small companies. They use experts who analyze data and constantly adapt and upgrade the technology they’re using. If a warehousing operation is more efficient, your business profits by having more data to rely on and great quality services.
It’s a situation where everybody wins and benefits. Having access to technological solutions that are constantly upgraded will definitely help streamline the supply chain and fulfillment processes while creating visibility, connectivity, and efficiency.
Fulfillment companies can often access better shipping costs than regular clients, so their fulfillment process will most likely be more efficient than your own, even after factoring in the extra costs associated with third-party logistics experts.
As a beginner or small business owner, you probably won’t have time or resources to invest in innovation and technology. That’s where having an expert fulfillment company on your side can come in handy.
5. Greater Insights/Business Intelligence
As a business owner, you’ll want to make informed business decisions to help grow your company. The only way to do it is by using accurate data.
Business intelligence is technology-driven and it incorporates analytics, data management, and reporting tools to create essential insights into your company.
Third-party warehouse operations can use business intelligence tools to track important aspects like supply, inventory management, and fulfillment. This will give you really valuable information to use for data-driven decision-making and strategic planning.
Many logistics companies that offer warehousing and fulfillment services can use their business intelligence tools to help you branch out to new markets. They can access strategically-placed warehouse facilities and distribution centers, so you can ship your products to new locations at your regular shipping rates.
6. More Time for Your Expertise
When it comes to your core business, you’re the true expert. You’re the person with a clear vision, you know your products and your target customers. Outsourcing your warehousing operations means letting other experts handle the things they’re trained to do.
Outsourced fulfillment services free up your schedule so you can focus on the bigger picture of running your business. You’ll have more time for actual core operations like capital management, marketing, and customer strategy and acquisition.
7. Reduced Overhead Costs
Overhead expenses represent the ongoing costs of running a business. Handling your own warehouse operation will add more costs to your overall spending. These costs will include things like rent, utilities, and insurance.
Outsourcing warehousing needs will result in cost savings by eliminating rental expenses while freeing up your time and resources. Businesses offering warehousing solutions and distribution services handle everything from printing shipping labels to order fulfillment, so you can focus on your company’s rapid growth.
The other advantage is that warehousing operations can become a variable expense. Your costs will be directly related to the amount of product the logistics company is storing for you. If market demand is lower for a time then you can counteract by lowering your inventory which in turn will lower your storage costs.
8. Reduce Staff Hiring and Management Costs
Any warehouse operation requires a lot of employees. You’ll need people who receive, document, and store the inventory. You’ll also need people who handle the logistics of your operation and people who handle fulfillment. All of this will weigh heavily on your spending costs.
When you’re outsourcing warehousing, your costs become flexible. You’ll be paying according to the size of your inventory and not for the number of people needed to get the job done. This means less staff to worry about and lower management costs.
9. Increase Customer Satisfaction
Keeping your customers happy is a key ingredient for any successful business. Working with professionals who have the knowledge and technology to handle orders and deliver things on time can be a huge asset for your company.
Outsource warehousing companies are adequately equipped and prepared to offer high-standard services. This will help ensure that your customers are happy and that there are no late shipments or product mix-ups along the way.
Streamline Your Warehousing & Fulfillment
We’ve summed up some of the most important advantages of 3PL services. If you’re just starting your business, or if you’re looking to expand, we hope that we’ve given you some new things to consider.
Third-party warehousing and fulfillment services are very popular with retailers involved in eCommerce. It’s cost-effective and it can help you avoid some of the most difficult challenges of managing a business.
You can look for a provider that resonates with your strategy and provides you with flexible solutions for your needs. Accessing warehousing and fulfillment solutions should free up your time, shear your overall expenses and increase customer satisfaction.
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