In-House Warehousing Benefits
When your business gains a significant number of customers, you might have to face the decision of whether to store and ship your products through your own warehouse or through a third-party warehouse fulfillment company.
There are pros and cons to each system, and they can make a significant impact on your business operations. Read on for a description of in-house versus outsourced warehouse management.
If you choose to continue managing your products in your own warehouse, you’ll be responsible for inventory, handling, storage, processes and tracking, among other duties. Keep these benefits and drawbacks of in-house warehousing in mind:
– Control over your products: This is usually the biggest reason most businesses choose to manage their own inventory. You can personally make sure your products are taken care of, stored properly and handled carefully.
– Save money: By deciding on in-house management, you’ll be saving the money you would’ve used to hire another warehousing company. Warehouse management software is also available to help you track inventory and customer orders, to ensure accuracy.
– Be more in touch with customer needs: Having your products right in front of you allows you to ensure that inventory is stocked to meet customer demands and that items are being processed and shipped on time.
– Provide necessary equipment: Because you’ll be working closely with your inventory, you can provide employees with the right handling equipment. For example, knowing the size and weight of boxes helps you know the correct forklifts and fork extension sizes needed to safely move products around the warehouse.
– It’s a time-consuming job: Managing a warehouse takes up a lot of time that could be spent focusing on another aspect of the company.
– Inexperience can be costly: If you’ve never dealt with managing a warehouse before, you risk high costs associated with errors and damaged goods, as well as the costs that come with opening a new warehouse (insurance, employee salary, equipment, etc.).
With outsourced warehousing, a separate company maintains your inventory and products, performing the same duties you would in your own warehouse. Here’s what you should know about third-party warehouse fulfillment operations:
– Less hassle for you: Allowing an experienced warehouse management company to handle your inventory takes a lot of responsibility off your hands, so you can concentrate on other business operations.
– Lots of service options: Warehouses offer various services for their clients. If you wanted, you could have a warehouse management company handle returns, shipping and even customer service.
– Save money on staffing and maintaining a warehouse: All the expenses that come with warehouse upkeep are the third-party company’s responsibility, including hiring extra staff for holidays and peak shopping seasons.
– The safety of contracts: In the contract you form with an outsourced company, you can specify what instances you should be compensated or responsible for.
– No control over warehouse operations: Outsourcing means you’ll have to trust that a separate company will treat your products with as much care as you would.
– Moving all your inventory to another location: Transporting each and every product to a different warehouse can be stressful and time-consuming and could delay the ordering and shipping process for customers.
One way to know the best choice for your company is to determine what your future business goals are. If you want to eventually be able to handle all products in-house, it’s best to start early while your business is still gaining momentum. On the other hand, if you want to alleviate the responsibilities of inventory management, outsourced warehousing makes sense for your needs.
Carefully consider the pros and cons of both warehouse management options to make the choice that will benefit your business the most.
Share small business news, blogs and social media tips with Project Eve's community of small business owners and entrepreneurs today. Our contributors come from a wide range of backgrounds; so whether you are a small business owner, social media strategist, financial adviser, serial entrepreneur, or write an amateur blog we urge you to contribute a blog to our 500,000+ community today. For more information, please refer to our Content Submissions Guidelines.