The development of new business models and online sales and shipping today has changed the way business is conducted at its core. None of the business processes are as they were twenty or thirty years ago. Every part of business today has the option to be outsourced. As with everything, warehousing services have also distinguished themselves as separate services. This means that a company can opt to outsource warehousing to other companies that specialize in that field. With considerable benefits it brings the question is, when is the right time to rent a warehousing service?
Many companies today opt for using a third-party solution to warehousing. The reasons can be different as the solutions to the problem. The key reason is to conduct sales and delivery of goods faster than before as the new market dictates. Besides warehousing, service companies also tend to offer to handle the full order fulfillment process, third-party logistics, and inventory management.
What is a warehousing service?
Well, warehousing service companies order a simple service of storing of company’s inventory for a short or extended period of time. Warehousing companies have specialized storage space for item storage and can provide storage of large quantities of goods. These warehouses are fully equipped with both shelving solutions and equipment such as forklifts, dock, containers, and pallets. Some even provide specialized storage with temperature, climate control and even assist in large B2B shipments. Although warehousing companies can offer additional services, they are not part of warehousing.
Reasons and the right time to rent a warehousing service
Many small or new businesses handle their warehousing activities in-house. Small businesses can handle the storage by themselves at least at the beginning. Developing business and expanding markets can cause small companies to start using third-party warehousing services to keep their business efficient. There are some factors that cause them to choose third party warehousing services:
- they keep the costs low,
- timely shipping and delivery,
- low staff cost,
- sufficient quantities of products available,
- optimized storage and equipment.
But when and why to start using warehousing services. Some of the top reasons and why to use them are:
Cyclical or uneven sales
Cyclical, seasonal and uneven sales that fluctuate throughout the year can make warehousing complicated for small companies. In case of uneven sales and storage, small companies can have a problem with leasing large warehouses and equipment.
Lack of time
The small businesses that are experiencing fast growth are too busy trying to fulfill customer needs. The requirement is to provide the market with products and take care of sales and marketing. Warehousing becomes the burden that the company can’t handle and that is slowing the business down. At the same time, it can’t devote any more time and resources to deal with warehousing issues. In these situations, outsourcing the warehousing to third parties becomes a must and a further growth prerequisite. So, lack of time to commit to organizing a warehousing system often determines the right time to rent a warehousing service.
Lack of expensive infrastructure
Fast-growing companies also have a problem adjusting quickly enough to fast changes. They can’t adapt fast enough by creating additional warehouse space and equipment. Its also tied with considerable expenses. In these conditions, it is more reasonable to opt for a third-party warehousing solution that can better meet the needs in the short run. These solutions are also dispersed so the company can find warehousing solutions wherever the market needs them.
Warehousing services play an important part in the dynamic eCommerce of today. It came to be as a response to the market demands and the need to satisfy consumers a quickly as possible making it vital to choose the right time to rent a warehousing service. These services are developing and are becoming irreplaceable. We will see their full potential in the future.