Save Warehousing Costs by Outsourcing

11/10/2015

When growing companies run out of warehouse space, the initial solution is to rent or buy more. But that’s not always the ideal answer. Due to high demand, the costs of renting an entire warehouse are expected to increase by as much as 10 percent over the next three years (Cushman & Wakefield). Even if your business can afford the rent, it may be impossible to know how much space you’ll need as your company grows and changes. Rather than pay for a half-empty warehouse, growing companies can gain just the right amount of warehouse space—along with other benefits—by outsourcing to a third-party logistics (3PL) firm.

 

The Benefits of Outsourcing

  • Only pay for the space you need. One of the biggest benefits of outsourcing to a 3PL firm is that you only pay for the warehouse space you need. Instead of renting or buying a facility that may be 100 percent filled during the winter and 50 percent in the summer, your company can pay for storage space based on your inventory level. And because 3PL firms are very efficient in maximizing floor space and improving processes, you typically will pay less and move product more quickly in the long run.
  • Save on labor. Companies with their own warehouse operations likely will spend more over time because of the labor required to keep the operation running. Logistics firms provide peace of mind to companies by training staff, handling paperwork and billing, and monitoring your product and supply chain.
  • Use services beyond your capabilities. Most 3PL firms offer a wide range of services outside of storage and transportation. For example, instead of paying for expensive packaging equipment, which will take up space in your facility, the 3PL firm can handle your packaging needs. Other 3PL services can add to your efficiencies, such as order fulfillment, kitting, cross-dock services, and much more.