Benefits of Using Third-Party Logistics
The obvious benefit to using a logistics company is that you don’t have to do it yourself. But the benefit really goes deeper than that. Outsourcing warehousing and fulfillment can have a meaningful impact on your business's growth. Original article can be found HERE
1. Avoid Long-Term Leases
Many logistic companies offer flexible pricing. This means that as you grow— or go through slow periods—they will be able to adapt to your needs and adjust cost accordingly. Renting your own warehouse space usually requires more of a commitment.
2. No Staff Required
When you fulfill and ship your own orders, you’ll likely need to hire staff as you scale. Managing staff takes time. If your business is still in flux, you may be wary of promising someone a job. Instead, you can outsource the work to a logistics company and let them be responsible for finding and hiring good people.
3. Be More Effective
Chances are, you didn’t start a business because you’re really good at packing boxes. There are other skills you bring to the table that are harder to outsource. When you let someone else take care of logistical details, you can focus on the things that will have a greater impact on your bottom line.
4. Save Money
Although doing it yourself is mostly free, in the long run, hiring a logistics company can save you money as you grow. If they’re operating at a larger scale than you, you can benefit from their efficiencies and leverage their buying power on packaging and shipping costs.
When Is the Right Time to Switch?
Most companies start out fulfilling their own orders, and some eventually add a third-party solution as they scale. The problem is, it’s difficult to know when to make the switch. Especially if you’re bootstrapping your business.
It turns out, businesses of many sizes can benefit from warehousing and fulfillment services. There are a variety of companies to choose from, some of which specialize in smaller or larger-scale operations.
However, there are clear signs that it’s time to start outsourcing.
1. Cyclical or Uneven Sales
If the number of orders your process fluctuates throughout the year, it probably doesn’t make sense for you to commit to running and staffing your own warehouse. A logistics company will be able to adapt to your needs.
2. You’re Too Busy
If you’re so busy dealing with order fulfillment that you don’t have time to focus on growth, it might be time to start outsourcing it. As a business owner, you need to be able to devote time to sales and marketing if you want to be around for the long-term.
3. Lack of Infrastructure
If you’re growing quickly, you may outgrow your current infrastructure before you can adapt. This can add a lot of stress and hamper growth. When you outsource to a business that specializes in logistics, they’ll be better equipped to adapt to the changes quickly.
Third-party warehousing and fulfillment isn’t right for everyone, but if you find yourself in one these situations, it might be time to start calling around and chatting with logistics companies.