When you’re running an ecommerce business, every aspect counts. The success of your business depends on your ability to juggle numerous responsibilities, not least inventory management. No matter how great your inventory and order management systems are, if you can’t find what you need when you need it, or if products get lost in transit, then you have a problem.
That’s why many e-commerce companies rely on outsourcing warehouse management services. This article will help you understand why you should outsource logistics and whether or not outsourcing warehouse management is worth the investment. Read on to find out everything you need to know about warehouse outsourcing.
What is Warehouse Outsourcing?
Outsourcing warehouse management refers to outsourcing inventory management to a third-party logistics or warehouse management company that can optimally manage all logistics activities and different stages of the supply chain. This can include a number of processes, including order fulfillment and shipping, inventory management, inventory tracking, and more.
Warehouse management can be outsourced for several reasons. Companies that outsource inventory management may not have the space to store it or lack the skills to manage it effectively. In these cases, outsourcing inventory management is the most logical solution to the problem.
Why do e-commerce companies outsource inventory management?
Warehouse tasks can be extremely stressful and time-consuming, especially when trying to manage all the core areas of an e-commerce business. With hundreds or thousands of products and orders in progress, you need a way to track inventory and shipments in real time, 24/7. When you outsource your warehouse operations, you have the freedom to focus on your own core business, such as marketing, sales and customer service. You could also be able to reduce personnel costs, streamline the logistics process and improve delivery times.
When is an outsourced warehouse worth the investment?
There are some situations where outsourcing warehouse management is probably a good idea. If warehouse space and/or staff are limited, if the volume of orders and shipments is high or if you need to serve a large geographical area, an outsourced warehouse provides you with all the necessary logistics services. If your employees spend too much time on administrative tasks, if inventory gets lost or delayed, or products get lost in transit, it’s best to outsource your logistics tasks.
When is warehouse outsourcing not worth the investment?
If your e-commerce business can handle warehouse operations and already has a warehouse in place there may not be much to gain from outsourcing. If your operations are running well, you have the space to store inventory and staff to handle orders, then you may not need to outsource. If inventory is always available, if your employees are able to fulfill orders promptly and accurately, and if products are shipped without errors, you may not need to hire external staff.
How to find the right warehouse outsourcing partner?
Whether you are outsourcing warehousing, marketing or any other process, the most important element of the outsourcing process is choosing the right partner. Finding the right outsourcing partner is critical to the success of your business. You need to find a partner you can trust who shares your company’s values and has expertise in the area you want to outsource.
Find out how the outsourcing provider approaches your business and fits into your team. Understand how the partner communicates with customers and manages internal operations to ensure it aligns with your corporate culture. Understand how the partner prices its services, so you can budget accordingly. Once this is done, you can start researching potential warehouse partners.
eLogy is the logistics ecosystem for e-commerce that helps streamline the supply chain by offering various outsourced solutions to improve your warehouse logistics, including a logistics WMS.
Conclusion
Warehousing and logistics are the most common areas that companies decide to outsource. Warehouse outsourcing allows you to outsource the management and operations of your warehouse, including inventory check, packing, inventory management, order fulfillment and shipping. Warehouse outsourcing can be a cost-effective strategy for small businesses with limited budgets but it can also be beneficial for businesses that need to scale quickly and don’t want to hire and train new workers. The success of your business depends on your ability to juggle numerous responsibilities, including inventory management. When running your own operations, it’s easy to miss important details, while ecommerce logistics in outsourcing can leave you more time and energy to focus on other aspects of your business.
