Challenges of In-House Fulfillment

In-house fulfillment can be a great way for businesses to manage their own operations and feel like they have more control, but it can also come with several challenges. These challenges include initial setup costs, ongoing operations and labor costs, lack of expertise, and the lack of space to grow with ongoing demand.

Four Initial Challenges of In-House Warehousing

1. Initial setup costs: In-house fulfillment can be expensive to set up, as businesses will need to invest in the necessary technology, racks, forklifts, equipment, staffing, and space.
2. Ongoing costs: In-house fulfillment can also be expensive to maintain as businesses will need to invest in necessary reoccurring technology, fluctuating staffing to keep their operations running smoothly, and money to either rent or purchase warehouse space.
3. Lack of expertise: In-house fulfillment can be challenging for businesses that lack the necessary expertise to manage their operations efficiently. Inventory management is a major pain point of most businesses that have product, shipping in the most efficient method, and overall warehouse management are tricky and time-consuming skills to master.
4. The lack of space to grow with your demand: As your business grows so will your warehouse floor space. Adjusting quickly to expanding and contrasting growth can be problematic and challenging to stay on top of. Investments in new racking, forklifts, and other resources to help scale growth can be costly and tricky.

When is it time to outsource?

Outsourcing warehousing and fulfillment services to a qualified 3PL (third party logistics company) can be a great solution for growing businesses. It can help you manage inventory in a more effective way, improve shipping rates, stay on top of product returns, freeing up resources to focus on other parts of your business, and allow you to keep up with future growth. In this white paper, we will discuss when it is best to use outsourced warehousing and fulfillment, highlighting the following points:

1. Essential elements of your business are being neglected.
2. Your growth is outpacing your ability to manage it.
3. You have a history of poor returns and customer service.
4. Your infrastructure is not equipped to handle your expansion.
5. Your shipping rates are eating into your profits.
6. You have difficulty managing your inventory.
7. You are looking to broaden your production space.

When to Outsource to a 3PL Partner

1. Essential elements of your business are being neglected.
   If you find that managing your warehouse and fulfillment operations is taking up too much of your time and resources, it may be time to outsource. Most companies are successful because of a certain product or skillset, not because of how great of a shipper they are. Outsourcing to a 3PL can free up resources to focus on those essential parts of your business, such as marketing, customer service, and product development.
2. Your growth is outpacing your ability to manage it.
   If your business is growing faster than you can manage, outsourcing can help you keep up with the demand. Outsourcing can provide you with the resources and expertise to manage your warehouse and fulfillment operations more efficiently and let you focus on the core of your business. You will be able to scale up and down more effectively without the headaches of reducing or increasing labor, space, and money.
3. You have a history of poor returns and customer service.
   If you’re struggling with return management, a 3PL can help you streamline the process, or completely take that off your plate. Outsourcing can provide you with the expertise and resources to manage returns more efficiently, while also reducing costs, saving you valuable time, but most importantly, giving your end customers a great experience as to build brand loyalty and retention. You got them, now let’s keep them!
4. Your infrastructure is not equipped to handle your expansion.
   Outsourcing can help you scale up or down quickly. 3PL’s typically have room for growing businesses that may expand or contract upon market demands. They can provide you with a scalable solutions, space, labor, and expertise to manage growing fulfillment requirements.
5. Your shipping rates are eating into your profits.
   If your shipping rates are too high, outsourcing can help you reduce costs dramatically. A skilled 3PL provider will have competitive rates due to the volume of shipments they ship, as well as expertise on shipping services that might be needed for specialty products, as well as international shipping.
6. You have difficulty managing your inventory.
   If you’re struggling with inventory management, and most do, outsourcing can help you manage your inventory more efficiently. A strong partner will help you maintain accurate inventory levels, provide frequent reporting tools, and make sure your inventory is accessible to your clients. Inventory management is powerful investment in your business if managed correctly. It can also be an extremely frustrating and painful part of in-house warehousing if not done correctly.
7. You are looking to broaden your production space.
   If you want and need to expand your production space, outsourcing can help you do so. Storing inventory at a 3PL will allow you to reclaim valuable production space and repurpose that space for additional manufacturing. Labor can also be repurposed for increased production. This is a great way to continue growth.

Conclusion

Outsourced warehousing and fulfillment can be a great solution for businesses that are struggling to keep up with their growth. It can help them manage their inventory, shipping, and returns more efficiently, while also freeing up resources to focus on other parts of their Business. Outsourcing can provide businesses with the resources and expertise to manage their warehouse and fulfillment operations more efficiently, while also freeing up resources to focus on other parts of their business.

LastMile
For more information about outsourcing your warehousing and fulfillment to a 3PL company
please visit www.lastmilelogistix.com or call 801-396-0984