10 Reasons to Outsource Your Warehouse Operations
A strong case can be made for outsourcing your non-core business operations that are not direct revenue earners, and warehousing definitely falls into this category. Yours is not a warehousing business, and therefore, warehousing should be regarded as an overhead that can be outsourced to a third-party specialist.
There are many advantages you will gain when you outsource your warehouse operations to a third-party logistics (3PL) provider, including the following.
1. More Time to Focus on Your Core Business
Warehousing is one of several business operations that take up and divert valuable management time and expertise that should be directed to business-building activities. Outsourcing your warehousing will free up your management team’s time, allowing them to work on increasing your bottom line.
2. Freed-Up Capital
Free up valuable capital by switching from in-house warehousing to an outsourced operation. If you are a start-up, you can completely avoid the upfront capital cost of building a warehouse by outsourcing your warehousing operation to a reputable 3rd party right from the get-go.
3. No Need for Ancillary Equipment
In addition to avoiding tying up capital in physical infrastructure, you’ll also save on the expense of providing your warehouse with the necessary equipment, which may include mezzanine floors, safety barriers, pallet racking, forklift trucks, and more. Not to mention that all of this equipment will involve maintenance and service costs on a regular basis.
4. Better Customer Service
The revenues of 3PL providers depend upon the quality of services they provide. A top-notch warehouse operator will offer you a high level of service backed up by agreed-upon performance stipulations. It is, therefore, in the best interests of a service provider to do an excellent job for you in order to retain your business.
5. Gives You Access to the Latest Inventory Management Systems
Successfully managing your inventory can be a big challenge. A high-end outsourced warehouse service company invests in top-of-the-line warehouse management systems (WMS) that automatically record the many processes necessary to keep control of inventory. You want to run your business, not spend time keeping up with the latest technology relating to warehousing and inventory.
6. No Need for Warehouse Workers
With your own warehouse, you need to ensure that you have enough people at all times to carry out necessary tasks. This means you may need to hire extra workers at times of high demand. Needless to say, hiring and vetting a warehouse team can be expensive and time-consuming. A fulfillment company takes this headache away from you by using its own employees.
7. Reduced Requirement for HR Staff
Managing warehouse employees can constitute a significant overhead, particularly if your business has round-the-clock operations. When you outsource your warehouse operations, you also outsource all aspects of HR management associated with warehouse staff, including payroll, holiday pay, sick pay, performance management, training, etc.
8. Reduced Shipping Costs
Whatever your type of business—brick-and-mortar store, e-commerce platform, or a combination of both—shipping expenditures can eat into your profits. An outsourced fulfillment company with many clients will likely have market leverage when it comes to shipping costs.
When negotiating transportation costs, a 3PL operator has the ability to bundle together packages from the various companies using its warehouse facilities. By offering transportation companies bulk orders that fill up their trucks, a fulfillment service can negotiate better shipping rates.
9. No Worries About Warehouse Health and Safety Compliance Issues
Managing a warehouse can be complex because of the health and safety requirements involved. Regular employee training and certifications may be mandatory and subject to strict enforcement. Health and safety issues are entirely justified and should not just be considered cumbersome ‘red tape.’ This is an important legal compliance issue that is best handled by outsourcing your warehousing operations to specialists.
10. Provides Flexibility
An important benefit of outsourcing your warehouse operations can be flexibility with respect to lease terms. If you have a seasonal business or demand for your goods fluctuates for some other reason, third-party warehousing solves the problem of empty racking or a lot of slow-moving stock on your shelves. With a flexible provider, you’ll get access to the right amount of storage and accompanying services when you need them.
Outsource Your Warehouse Operations: Final Thoughts
If your business is successful, it’s because of the things that you do best. This does not include overseeing and running a warehouse and all of its myriad logistics. However, this is what an outsourced warehousing service does best and why you should use one.
Outsourcing your warehousing operations (and other non-core needs) frees up time and resources for actual core business operations. Outsourcing enables you to focus your time, eliminate distractions, hone your budget and other resources, and increase the quality of your services.
Choose the Best 3PL Provider
Working with the right warehousing service is crucial if you want the best results. M&M Quality Solutions understands how essential effective warehousing is to your business. We will ensure that your products are efficiently stored and shipped on time. We use the latest 3PL inventory management systems to help you keep track of your products at all times.
Please feel free to contact us for a free, no-obligation consultation!