Whether you’re a relatively new business who work with a considerable amount of stock or an established business who to need somewhere to store your stock, one of the first things you need to consider is where you are going to put it.Realistically you have two options, you purchase a warehousing space or storage facility, either at your place of work or based further away, hiring staff and running it yourself.Your other option is to source a third party warehousing company to take care of it for you.To help you make the right decision, here are 3 reasons why you should choose to outsource your warehousing to a third party.
Reduction in Admin
Running your own business comes with plenty of different administrative issues, from wages to tax returns, from staff holiday dates to emptying the bins.Deciding to run a storage facility requires much more admin because there is no room for mistakes.
Warehouse organisation is a lot like running a library, products have a specific code or for of identification to not only make them unlike any other product but so they can be positioned in order, date or next to as the similar product. This, of course, means a lot more administration for your current staff.
If you choose to outsource your warehousing, then all of this is taken care of you. The only thing you need to take care of is the order details and then hand them over to the warehouse who can take it from there.
Probably the most important factor in any business is the financial impact of any decision you make.If you decide to run your own warehouse, then there are a number of cost to take into account. Firstly, there is the warehouse space itself, you’ll have to either build or buy a suitable building to fit your needs now and possible expansion in the future.
Next up is the cost of racking equipment, storage machinery such as forklifts and extra staff to run the place.This is all well and good when things like the purchase or build runs smoothly, the equipment is brand new and staff are easily available, but what if they aren’t?
Say you have some setbacks during the building that costs you extra, perhaps equipment breaks and ether needs to be fixed or replaced, or what if the right staff aren’t available right away? All of these problems are going to seriously skew your original budget.
Third party warehouse and distribution company Masters Logistical told us cost is a big factor as to why they get lots of business enquiries.They said, “lots of businesses come to us initially to weigh up their options between going it alone or opting to outsource because they want to make an informed decision.”
“When we explain that its common practice for third-party warehouses to offer a fixed contract they often make their mind up pretty quickly, not just because it’s reassuring to pay the same money each year, but because it’s great value for money.The other plus is that the majority of outsourced warehouses allow for flexible contracts.
They understand that for many businesses, different times of the year are busier than others. It’s for this reason that they make sure you aren’t short-changed by a flat rate contract, and can mould them to your calendar.
Another reason you might want to consider outsourcing instead of taking on warehousing yourself is because of the skills needed to do run one.For example, its all well and good buying the specific equipment and hiring staff, but they need to be trained and prepared for the warehouse environment.For example, there are forklift qualifications which people are required to pass, more of which can be read about here on the HSE site.
Also there is the importance of racking inspections. At least one member of staff should be trained in the SEMA or POWER safety qualifications so that you have someone on site who can make regular checks to your storage equipment.Outsourcing means all of this is left up to the professionals, leaving you to concentrate on your actual business instead of forklifts or the mind-numbing world of health and safety.
So there you have it, three reasons why outsourcing is your best bet if your business requires storage solutions. Save yourself the time, effort and extra spend and instead go for a 3rd party warehousing company.