If you are planning to start an e-commerce business or have been selling products for a while, you may have questions related to the essential tasks of warehousing, shipping and fulfilment.
In this blog, we provide details about getting these crucial responsibilities right with the help of third party warehousing.
Third Party Warehousing
Selling your products can be exciting but the fun begins to wear off when business owners are faced with the perennial question of how to deliver the product to their customers. Following are certain ways of making sure that the product reaches the customer’s hands in the most cost-effective manner possible.
- You can have a dropshipper deliver the product for you.
- You can take it upon yourself to deliver products or hire a team to ensure product delivery.
- You can get in touch with a logistics company who can handle the tasks of warehousing and fulfilment for you.
There are several benefits to handling the logistics aspect of your business yourself. Not only does it help you to cut down on operational costs, but it also offers a high degree of flexibility when it comes to delivery. For this reason, companies that have recently entered the market and have unique packaging requirements prefer to handle product delivery themselves.
As it often happens in businesses, owners have more time than money with them and in such situations, handling logistics in-house can prove to be a boon for their faltering cash flow. However, if your business has been doing well and you wish to save yourself the effort of managing delivery yourself, you may be interested in knowing more about third party warehousing.
The Benefits of Third Party Warehousing
It goes without saying that the biggest advantage of using third party logistics is that you do not have to manage it yourself. But there are several other benefits of outsourcing this responsibility. To start with, your business can achieve greater heights of success if you outsource the process of warehousing and fulfilment to another business.
No Need to invest in Long Term Leases
Your financial needs will be addressed in a better way if you hire a logistics company which offers flexible pricing. For instance, if your business has not been making much profit, your logistics company will downsize its operating costs and adjust the running costs accordingly.
On the other hand, if your business is growing and you need to diversify your operations, the logistics company will make the necessary adjustments to incorporate your growing needs.
This flexibility is not available to businesses that take logistics into their own hands. Renting a warehouse space makes it binding for you to make use of the same space irrespective of whether it is profitable or not.
If a year-long lease has been signed ,the business has no choice but to continue using the same warehouse. They will also be required to purchase the right storage solutions for the stock that is being stored. It is essential that stock is kept safe and away from anything that can cause damage, so heavy duty plastic boxes are always preferable for companies that need to deliver stock that is in pristine condition.
In this way, much of the financial resources that the company holds are locked up for a period of twelve months.
If your business is into seasonal products, it is possible that the volume of product delivery and inventory levels may not be very high during the off-season period. In such times, hiring a logistics company which receives monthly payments from you may suit your requirements a lot better.
No Need to Hire Staff
When you are handling warehousing and fulfilment yourself, you may have to hire staff that take care of the various operations involved. But hiring staff and managing them is quite a task in itself. A business which is looking to expand its operations may not find the time to look after the needs of staff.
In this way, letting a third party warehousing company handle logistics for you can be the ideal solution as it will be their responsibility to find, hire and train the suitable staff for your business’s needs.
It’s More Effective
As the owner of a business, there are better and more superior skills that you bring to the table than packing products and getting them delivered. By doing it yourself or assigning these tasks to your valuable employees, your business may not grow as much as it is capable of.
By outsourcing these tasks to a company which specialises in them, you and your employees will find more time on your hands to take care of other responsibilities that fall within your areas of specialisation. Focusing on your respective strengths will have a positive effect on the bottom line.
When focus is diverted from back-end logistics to sales, product sourcing or marketing, the business has more time and better chances of growth.
As long as your business is small and has few product deliveries, doing it yourself may seem to be the more feasible and cost effective solution. However, in the long run when you have more orders to fulfil, hiring a logistics company can help you save money.
If the logistics company is operating at a larger scale, their professionalism and efficiency is likely to benefit you more than handling the deliveries yourself. With more operations, they also have the power to negotiate better deals when it comes to packaging and shipping costs.
As a company looking to hire the logistics services of another company, there are several important things that you must consider before you finalise your service provider. Speaking with the customer and trade references given to you by the company and making sure that they do not fall back on their claims is important to ensure that you select the right third-party warehousing company to work alongside.
Get in touch with us to know more about important aspects of warehousing and how having the right storage solution can make a huge difference in running a warehouse efficiently.