Once upon a time, warehouses solely kept goods for consumers.
Today, however, warehouses provide a variety of distribution services in addition to warehousing to companies of all kinds. In addition to basic product storage, the majority of third-party distribution warehousing companies provide order fulfillment, picking and packaging, personalized labeling, and other value-added services.
Despite all the services provided, many business owners are unclear of the advantages of outsourcing their distribution and warehousing.
Here are 3 situations in which it is the most sensible:
- Companies that are only getting started
- When the economy is expanding
- Geographic expansion
Companies that are only getting started
Start-ups are in a difficult position when it comes to making future plans. While the business plan outlines particular growth strategies, it is doubtful that everything will proceed according to plan.
Additionally, they rarely possess the knowledge, resources, or real estate required to organize adequate product distribution and warehousing. In these circumstances, forming a partnership with an established 3PL is a wise move that has several advantages. Among them include a solid reputation, well-maintained facilities, and staff that have received extensive training. Additionally, it enables a startup to concentrate on its core strengths rather than foraying into a market they are unfamiliar with.
When the economy is expanding
If your business suddenly experiences a growth spike, you’ll also need to scale down on your distribution and warehousing. The mere fact that you are bringing in more money does not guarantee that you will be able to buy a new warehouse and furnish it to your specifications. Additionally, you will need to hire and educate staff to run it.
Even if you do have the money, you might not be able to locate a suitable space quickly enough to fulfill demand. Third-party distribution warehousing offers the area and personnel required to maintain the development pattern, making it a superb short-term and long-term solution.
It’s not unusual for a business to choose to grow into a new region. Although it may have achieved success in one region, there is no assurance that it will expand at the same rate in a different location.
Using funds to pay for property, hire and educate staff, and launch the new distribution center online might not make sense. It resembles the predicament that startups deal with. Outsourcing to a third-party distribution warehouse is a workable temporary solution, even if the ultimate goal is to purchase, rent, or construct a specialized warehouse and distribution center.
ProConnect Integrated Logistics – Your Warehousing & Freight Forwarding Partner
A third-party logistics firm can help shippers mitigate a variety of risks throughout the supply chain by outsourcing certain logistics functions. By partnering with a 3PL, a shipper can free up time to concentrate on his or her core competencies without suffering from the ever-shifting logistics landscape.
If you are looking for a partner to take care of all your logistics hassles, talk to us.