From small start-up companies just breaking into the market, to large companies seeking new opportunities, outsourcing can be an excellent strategy for survival. Many companies are outsourcing warehousing and distribution services, allowing them to focus on other aspects of their business.
Below you will find the top five reasons to outsource your warehousing and distribution services to a 3PL provider.
1. Ease of Scaling
As your company enters new markets, introduces new products or the seasons change, inventory levels and transportation needs will naturally follow suit. It may not be possible to accurately predict the amount of warehouse space or level of distribution services that you will need, but with outsourcing, it is easy to scale your distribution model as needs change. Outsourcing distribution helps to mitigate increased costs and gives you the ability to better manage inventory levels.
2. Amalgamation of Shipments
With a third party logistics provider, your entire inventory warehousing and transportation needs are combined under one roof. Multiple shipments to different locations can be accomplished in a more time efficient manner, rather than sending sporadic shipments. There are also economic benefits in that some 3PL providers are able to offer deep discounts by going through several transportation providers.
3. Experience and Expertise
For many business owners and managers, the supply chain is not their first area of expertise, which can make the process much more challenging. A 3PL provider, on the other hand, will have in-depth industry knowledge as well as a proven process. Taking advantage of the experience and expertise a 3PL offers can make the difference between serving the customer and losing the customer.
4. Access to Solutions
For smaller businesses a lack of funding makes it impossible to invest in technological solutions, creating a serious barrier to entry. A 3PL provider that offers warehouse and transportation management systems, incorporating radio frequency identification and other inventory tracking methods, will help to meet customer demands without the investment. This type of access gives companies the competitive edge no matter the marketplace.
5. Low Capital Expenditures
Acquiring warehousing space and infrastructure for distribution requires a large capital investment. Companies that choose this route risk tying up their cash flows, which can create financial instability. In order to grow and expand, further investments are always necessary. When the facilities and transportation are owned and operated by a third party, these risks are eliminated allowing for expansion without laying out capital up front.
Trust CWI For Your Warehousing and Distribution
The bottom line, for companies that require warehousing and distribution services, is that outsourcing to a 3PL like CWI Logistics makes good sense.
The ability to manage inventory, combine shipments, rely on the experience, and keep more capital on hand will give your business the upper hand in continuing to satisfy your customers, well into the future.
Need a hand with your warehousing and distribution? Give CWI a call today!