Small business owners have to be masters of multi-tasking when they set up shop. They have to juggle hiring staff, budgeting, developing marketing strategies, developing their product and price offer and ensuring that logistical processes are in place. This article looks at why is makes good business sense to outsource your non-core functions like warehousing instead.
1. More time to focus on what you do best
It is fair to say that most business owners aren’t fulfilment or 3PL logistics experts and nor should they be. Instead on investing time, money and energy in trying to perfect in-house warehousing solutions, you could choose to outsource this function to a reputable warehousing partner. Your time and hard-earned cash is better spent on the areas of your business that you can improve or grow, for example marketing, advertising, expanding your product or service offering.
2. Specialists can do it better than you
Warehousing and fulfilment specialists are experienced in the complexities of supply chain management, therefore they are able to offer a higher level of service than a less-experienced in-house team. They have world-class warehouse management software and equipment, and their staff receive the relevant training on a regular basis to maximise outputs.
The required warehousing services, solutions and outputs will be stipulated in a contract between you and the warehousing specialist, and you will have the option of finding another warehousing solution should their performance be unsatisfactory.
A key benefit of outsourced warehousing is that you aren’t tied to a long-term lease agreement. It is pointless to pay for storage throughout the year if your business is prone to seasonal fluctuations, or to be restricted by having a warehouse in a set location for the entire duration of a rental contract.
By using a third party warehousing service provider, you may use their space where and when required, and only for as long as you need it. Should your business grow rapidly, and there is a sudden demand for higher stock levels, you can easily acquire more space from your warehousing partner.
6. Reduced costs
If choosing to outsource your warehousing needs, you won’t have to deal with the added costs of warehouse maintenance, equipment and staffing. You will only pay for the warehouse space and services when you need it. Outsourced partners maximise the usage of space with multiple clients and generally have larger premises with lower per meter costs vs having a small own owned warehouse.
7. Avoid unnecessary frustrations
Business owners are often not aware of the specific health and safety regulations that need to be in place when running a warehouse. Warehouse managers and staff need mandatory specialist training and certifications for certain operations. Keeping track and managing these health and safety requirements can be cumbersome and time-consuming, especially for someone with no warehousing experience. Non-compliance or a misinterpretation of such requirements could lead to costly legal action.
8. Location location location
In-house warehousing can become a bit of a logistics nightmare in terms of location. If your warehouse is on the same premises as your business, or close by for convenience and control, chances are that you are either not close to a port (for efficient receiving), or close to your customers (for efficient distribution). Experts will tell you that to keep costs relatively low, the ideal is to keep your distance to a minimum. Arranging delivery or pickup to remote areas can become an unnecessary headache and cost. Choosing a third party warehousing partner who fully grasps the importance of warehouse location, can provide you with more effective and affordable solutions.