Outsourcing your warehousing and fulfillment requirements can be a cost-effective way to manage your storage and distribution services. It can be expensive and time-consuming to control this aspect of the business while you grow your company, and using industry experts enables you to focus on other areas of your company.
However, it’s essential to work with the right 3PL company to get the best results. Warehousing and fulfillment services are challenging, and a reputable company can ensure your customers receive the service they expect. Several crucial factors can help you understand the sector and find a supplier that can meet your requirements.
What are Outsourced Warehousing and Fulfillment Solutions?
Many logistics companies provide warehousing and fulfillment processes that help their customers to manage their inventory more efficiently. They enable you to use their storage space, inventory management software, and distribution services to provide superior customer service levels.
Whether you are a small business, a major international distributor, or an e-commerce business, a third-party logistics firm can help you streamline and improve your processes.
Only Pay for the Space You Need
One of the most significant challenges for a business owner is controlling storage costs. When managing your shipping and fulfillment services in-house, you need to pay for warehousing, and your storage requirements can change depending on the time of year and the needs of your customers.
If your business is seasonal, you may need a large warehouse, or several warehouses, at different times of the year. However, many lease agreements require you to pay for the same amount of space all year-round, even if you don’t have the stock to fill the floor space. This scenario could have a severe impact on your bottom line if you are locked into an agreement to pay costs for warehouse space you don’t need.
You may also be responsible for insurance and have to pay to repair any damage caused by your staff. If loading dock doors jam or a pipe bursts in the warehouse, you must develop solutions to avoid delays in the supply chain. All these issues can become a hassle and expensive.
To save money so you can work on other aspects of your business, outsource these processes to a third-party warehousing company. You only pay for the space you use, allowing you to save money when your stock levels are lower.
You also benefit by sharing equipment, utilities, and other operational overhead costs with other parties renting space in the same facility.
Reduced Staffing Costs
Staff account for a large proportion of fulfillment centers’ overhead. If you are hiring employees to look after your warehousing and shipping needs, you need to ensure enough people can carry out the tasks.
You may need to hire additional employees to cover holiday and sick leave, while staff may leave throughout the year to take up other employment opportunities. Hiring and vetting a team can be time-consuming and expensive, but fulfillment companies use their employees.
There is also the additional cost of management performing hiring duties. Because you often pay these employees at a higher wage, costs can quickly exceed your expected budget.
A high-quality warehousing and distribution company has staff that fulfill orders to send to your customers. They can pick and pack customized orders, providing you with the flexibility to offer varied packages for your clients. Since distribution centers train their staff to a high level, you can be confident you receive superior service without the additional costs.
Focus on Your Core Business
While you can put a management structure in place to handle many problems on your behalf, a business’ warehousing and fulfillment department can be large and complex.
Outsourcing this crucial area to experts ensures you have peace of mind that this part of your business runs smoothly. You are paying for professional services from an experienced firm, and you can then direct your attention to improving other features of your services.
Reduced Shipping Costs
Whether your business is on an e-commerce platform, works from a brick-and-mortar store, or a combination of both, shipping costs can be expensive. When you ship orders globally, or even between states, there may be taxes, varying transportation prices, and packaging costs that can see your profits dwindle.
An outsourced warehousing and fulfillment service can save you considerable amounts of money using their market leverage. When they negotiate transportation costs, a third-party operator bundles together packages from different companies that use their warehouse facilities. By offering the transportation firm a bulk order that fills their truck, known as full truckload shipments (FTL), they can often get a better rate than possible when shipping smaller loads.
Some larger logistics companies have warehouses spread across the county and even the world. Because they work with a network of partners within their supply chain management system, they can place your goods in warehouses that are closer to your customers. Since your packages don’t need to travel as far, you can improve customer service times and offer cheaper shipping rates.
While it is not cost-effective for an individual company to invest in shipping software, a third-party logistics supplier can use cutting-edge software to view the latest transportation rates. These costs can fluctuate rapidly, and their staff take the time to review the latest data to achieve the best rates for their clients.
If your 3PL can save you small amounts of money on each shipment, this adds up significantly over a year.
Enter New Markets
Businesses need to be agile and ready to take advantage of potential new opportunities. However, if you think it may be profitable to ship to a market in a different country or area, the extra costs can be prohibitive.
By taking advantage of third-party warehousing and fulfillment company resources, you can determine if your products are a good fit for a particular customer base. An established distribution network can quickly supply your new products to retailers, providing a rapid assessment of the potential success of your new ideas.
Your partner company can take care of the logistical issues while you focus on advertising and marketing to customers. There is no need to deal with the time, cost, and effort it takes to build relationships when shipping products into international territories because the shipping company takes care of this side of the business on your behalf.
Latest Inventory Management Systems
Inventory management can be challenging due to the number of steps in the process. Staff need to record when items arrive in the warehouse, find the most efficient storage space, log where it is, and ensure they can access the packages quickly for delivery. Employees have to know when an item leaves the warehouse and ensure customers know when to expect their delivery.
An outsourced warehouse and fulfillment company invests in high-end warehouse management systems (WMS) that automatically record many of these processes. There is less risk of staff error, and the software can help organize the items in the most efficient sequence for delivery.
Items go missing during transportation, and inventory management systems help track items, so you know where the package was in the supply chain before the issue. The logistics company can locate the item and source transportation to avoid any delays or arrange a replacement item to go with the next shipment.
Inventory management software automatically alerts you when stock levels are low and can help you understand which products are selling and which items aren’t making a profit. You can view the data at any time, giving you an overview you can use to grow and diversify your business.
Improved Customer Service
Customer service is at the heart of any business. In the modern era, customers expect rapid delivery times and real-time tracking. However, it’s challenging to ship items so quickly, and tracking technology costs money. A third-party warehousing and fulfillment partner can provide these functionalities as part of their service, and they can help keep your customer satisfied with your performance.
An outsourced partner provides the information you need to keep your customers informed and happy with your service.
Find Out If Outsourcing Warehousing and FulFillment Right For Your Business?
Outsourcing warehousing and fulfillment solutions are an excellent option for businesses of all sizes. Working with a reliable provider provides peace of mind and helps to streamline your operations.
Asiana USA works with a network of professional partners worldwide that can provide storage, picking, and shipping services to meet your needs. For a consultation and a free quote, contact Asiana USA at (855) 500-1808.