WarehousingAndFulfillment.com is the web’s best resource for getting UNBIASED quotes. Are you trying to decide whether you should get your own Commercial Facility or if you should outsource to a quality 3PL company that can store and ship your goods for you? This can be a very difficult decision to make, as many companies like the thought of having control over their Logistics, but don’t have time to take care of all of the Distribution for their business as well as all of the other functions of the business. There’s just not enough time in the day! But in order for you to decide to go the route of Warehouse Outsourcing, you’ve got to do a thorough analysis of the costs of doing the warehousing in house versus that of an outsourced provider.
Avoid These Three Mistakes When Choosing a Warehousing Company
The first step is to take a look at what it costs you or what it will cost you to perform the Storage and distribution yourself. What is the cost of your space? How many employees does it take to run your Warehouse and what are the hourly rates of these employees. Remember to include benefits into this analysis. What are your shipping costs in house? This will be a vital factor in the analysis, as many outsourced companies will be able to offer very competitive shipping rates since they aggregate freight.
But the three most common mistakes people make when deciding between keeping the Warehousing in house versus outsourcing are as follows:
- They don’t factor in the opportunity costs. In other words, if the business owner has to pitch in and help ship product, what could he or she have done with that time and would that time been better spent doing something else. For example, could the business have been better off if the owner was selling instead of packaging a product in the Warehouse?
- They don’t add all costs of doing the job in house. In other words, they forget to include all of the hours spent in the Warehouse, etc.
- Finally, they fall prey to the “hold on to your baby” syndrome. This means that many people are afraid to give up a part of their business for fear that something might go wrong. However, Warehousing companies have been providing these types of solutions on an outsourced basis for years. There are great companies out there that can take care of your baby!