Warehousing might not be the most exciting part of running a business, but it’s an essential aspect of your operations. Running an efficient and profitable business requires choosing the best warehousing strategy.
One of the most common options is to outsource a company’s warehousing operations. Whether it’s a small start-up company breaking into the market or a large business seeking new opportunities, outsourcing can be a great strategy for survival. Here are five reasons why you should outsource your warehousing.
- Reduced capital investment
Running a warehouse can be expensive, and not every business can comfortably afford it. Outsourcing your warehouse operations to a third-party provider can help reduce these costs.
Your company will have to pay third-party logistics, but you will no longer have to worry about warehousing major expenses. Labor expenditures, property leases, and equipment costs will no longer be your company’s responsibility, which can free up a significant amount of capital.
Most providers that offer warehousing for manufacturers as a service also provide extra services to help reduce costs. They can handle your assembly, inspections, and packaging, consolidating multiple aspects into one expense.
- No warehouse health and safety compliance issues
Due to the health and safety requirements, running and managing a warehouse can be particularly complicated. Regular expert training and certifications for staff are a must in some areas of warehouse operations and are subject to strict enforcement. While entirely justified, health and safety can be cumbersome and might seem needlessly time-consuming, even if it’s a matter of legal compliance.
Outsourcing warehouse operations gives you access to the third party’s own experts and its existing health and safety plan and infrastructure. The costs and headaches incurred due to updates and changes in compliance are also for your provider.
- Excellent distribution location
If you are an importer, your top priority will be to keep your road distance to a minimum. That means getting goods into your warehouse as soon as possible after passing through your port of entry. Therefore, it makes sense to choose a warehouse with easy access to your entry port.
Your chosen warehouse provider can offer a distribution operation, and manage and distribute your goods, leading to even more operational efficiencies. There are also economic benefits since third-party providers can offer high discounts by passing through several transportation providers.
- Flexibility on warehouse leasing terms
Due to customer demand, most businesses have seasonal fluctuations and may find their inventory requirements waxing and waning throughout the years. If you are running your own operations, you might find yourself in a situation where you are paying for shelves that hold slow-moving stock. You could also be left empty since there is insufficient customer demand to account for their use.
Outsourcing your warehouse operations to a third-party provider can help alleviate this issue because you will only be paying for the space you actually use. That means you can easily scale up or down your storage space throughout the year without having to worry about misspent funds.
Endnote
Managing a warehouse can be complicated, but companies may have more options than they realize. While it might not be the best option for all businesses, outsourcing warehouse operations can help most unequipped companies to manage their supply chain and make the most out of their warehousing. Look for reliable third-party logistics to get the help you need.