Outsourcing Pick and Pack

by Will Schneider

Are you considering outsourcing pick and pack with a fulfillment company? This is a very important question that many product-related companies consider. While the answer may seem obvious to some, there isn’t really a clear cut answer in many instances. Here are some of the reasons it can be difficult for people to outsource, as well as some things to consider when making the decision.

First and foremost, it is extremely difficult for many small business owners to outsource anything, as many times they have been responsible for the core functions of the business. Many small business owners do a great job at the core functions of their business, and rightfully think that they can do them better than anything else. However, the hard truth is that we only have a certain number of hours in each day. Especially if a small business is pursuing growth, sharing responsibility is the only way. Whether this is hiring additional staff or outsourcing the pick and pack, getting it off of the plate of the small business owner can be extremely successful. The catch is this – they have to be willing to accept that whoever they give pick and pack responsibilities to will not necessarily do it as well as they did it. No one ever has as much care for a business as the owner. However, owners must realize that they can only do a certain amount of things each day, and if they can get others to perform even at 80-90% of their capability, then the job will be done well.

The other big thing that we see when considering whether or not to outsource pick and pack services is “where” the fulfillment company must be located. Again, going back to the “control” issue, most small business owners wish to have the pick and pack located close to them. They figure that this way they can have more control over the process. While this may be true, the unfortunate reality is that there aren’t necessarily quality, high performing fulfillment companies in all areas of the country. This means that they could compromise by going with a local firm, taking a great risk that they warehousing company doesn’t perform well. But the really good 3pl companies will do a great job, whether or not you’re located next door to them. And believe me, finding a great pick and pack company is worth its’ weight in gold.

Finally, when looking at whether or not to outsource, keep the costs in mind. However, it’s not all about whether or not it’s cheaper to outsource. This is because most small business owners fail to incorporate “opportunity costs” into the equation. Simply put, there is an opportunity cost of continuing to do the fulfillment in house. If you do, you won’t have time to, for example, locate new customers, grow your business, or uncover earth shattering business opportunities. In order to make the best decision, you must include opportunity costs into the equation.

This entry was posted on Monday, January 9th, 2012 at 10:22 am and is filed under Warehousing and Fulfillment Resources.