The benefits of outsourcing warehousing and logistics

Business owners, and particularly entrepreneurs, often wear many hats when they set up shop. They must oversee production, hire and manage staff, develop sales and marketing strategies, pursue leads and potential customers, and deliver goods in a timely and efficient manner.

Soon they become established enough to hire dependable personnel and delegate many of these duties. But there are some areas where outsourcing work can provide a better return on investment.

One area a fast-growing and forward-thinking business owner may consider for outsourcing is warehouse and fulfillment. Storing product inventory and smoothly delivering it to your customer can be a time-consuming and expensive aspect of business. The advantages of using a third-party warehousing outfit are plentiful.

Expertise

Many companies don’t want to allocate money and human resources to warehousing and transportation. Fulfillment service providers are experienced in the intricacies of the supply chain. Their expertise and knowledge of the industry is incredibly useful. Benefits include a higher level of service, reduced fulfillment rates, a better turn-around time, and trained staff. Supply chain can be an overwhelming task. It’s best to let the experts handle it for you.

Scalability

Your inventory may fluctuate for various reasons — seasonal, clearing out discontinued items, making space for new products. Outsourcing your warehousing and distribution enables you to concentrate on developing your business during these types of downtime.

You won’t need to relocate products or layoff staff. Your warehouse expert can leverage fixed costs associated with managing the facility across several customers.

Access to technology

3PL and warehouse and fulfillment providers depend on the latest transportation and warehouse management software for better supply chain visibility and logistics management. Customers benefit by not having to invest in their own quoting and tracking computer systems and software, and having 24/7 access to information on their inventory and deliveries.

Reduced capital expenditures

Warehousing space and construction, equipment for distribution, and staff to manage fulfillment is a huge investment. A warehouse is not just four walls—equipment purchases such as forklifts, pallet racking, fire suppression systems and maintenance items necessitate a huge outlay of cash.

With a third-party logistics and warehousing provider, you have none of the risk of owning and operating, and no large outlay of capital for ancillary equipment purchases that could potentially tie up your cash flow.

Ideal distribution location

If your company is located in an area that is not easily accessible, trying to arrange for pickup will be an exercise in frustration. Most warehousing and distribution providers are located close to major highways, railroads and ports. This saves on time and fuel costs.

Your focus is only on your core business. Trying to be all things to all people will most certainly leave you exhausted and unfocused, and could lead to an unhappy clients and customers. Your time and expertise should be devoted to your core business. Recognizing your business strengths and providing solutions in areas that are not in your company’s wheelhouse will save you money, time and frustration.

Michael Jarrett is founder and president at Jarrett Logistics Systems and PackShip USA