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Small Business Warehousing Needs – Inventory Storage Tips for a Growing Company

Start-Up and small business owners are faced with challenges when inventory storage needs outgrow their basement or garage. The excitement of business growth is coupled with anxiety around the expenses associated with buying or leasing warehouse space.

Buying or leasing warehouse space to accommodate increasing inventory levels or expansion, however, is not the only choice.

The Flexible Warehousing Option – Utilizing a 3PL

Third party logistics companies are increasingly offering a one stop shop for small and mid sized businesses. 3PL warehouses typically have massive square footage to house the inventory of many client companies. The advantages they afford small businesses are many and centre on their level of expertise in operations and the flexibility and cost effectiveness they afford growing companies.

Advantages of Outsourcing with a 3PL Distribution Company

Partnering with a 3PL offers huge potential advantages, including:

  • Experts in inventory management, distribution and customer fulfillment.

It’s what they do for all their clients.

  • Having trained staff already on hand

You don’t have to hire and train staff

You don’t have to manage payroll and benefits of staff

  • Leveraging IT systems for inventory management

3PL’s have robust systems for tracking your inventory and managing it efficiently so that it is ready to ship

  • Allows for expanding or contracting of space requirements.

You have instant access to more space as you grow

You can use less space during off peak season when your inventory requirements are lower

You pay for space used, usually monthly, and not necessarily by square footage (often, based on pallets on hand)

  • Leverage courier shipping discounts

Often, 3PL’s get large discounts with courier and freight companies and they pass at least a portion of those rate savings on to you (which can often help offset your warehousing costs compared to your current shipping rates)

  • Efficient pick, packing and shipping

Warehousing staff can pick, pack and ship your orders efficiently and quickly. Often, they provide electronic integration with your systems so orders feed to the warehouse. Also, they can quickly print shipping labels from the data provided, thereby avoiding excessive data entry.

Is it Time to Outsource Warehousing and Distribution for Your Business?

You will know when you’ve outgrown your current warehousing and fulfillment environment. When that time comes, the best approach is to consider:

The prevailing inventory lease rates?

The ideal location for your product to be distributed from (is it near a courier shipping hub?).

Do you experience seasonality?

Do you know how much space you need today and tomorrow?

Do you have adequate systems in place to manage growing distribution volumes?

What efficiencies do you need to realize?

What staff you need to grow?

Of course there are more considerations unique to your business needs and wants. The important thing is to think hard about the potential of your business, and think big! Outsourcing 3PL partners can be a great warehousing solution to meet your best case scenario needs or your modest projections… and you can right-size the expense accordingly.

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