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3PL Warehousing – What Is a Third Party Logistics Warehouse and How Can It Help Grow Your Business?

Every successful business has a core competency, and the best leaders within these businesses also recognize which areas are not core competencies and in the product business, this is often warehousing and transportation. In short, ‘what you do’ is not warehousing and distribution, you need someone that does it better than you.

Outsourcing warehousing and distribution of your products could be the perfect answer for any emerging business looking to realize efficiencies and cost savings. Business leaders make the same decisions in other functional areas like payroll processing, advertising services and computer maintenance and many more.

Warehousing and Distribution – Leverage the Power of Scaling to Meet Business Needs

The ‘build versus buy’ question is one many executives contend with and when it comes to warehousing and distribution, the capital requirements of securing warehousing space and or a distribution (often truck) fleet is astronomical. What if sales don’t meet forecasts? What if supply is severely constrained? What if inventory is depleted too fast? In each of these scenarios, you will have some combination of under or over capacity on the warehousing and on the distribution-transportation size.

With an outsourced third party warehousing and distribution solution, that is, ‘pulling’ resources when you need them and in the quantity you need them, means you’re always right sized. Yes, it is possible to have your capacity shift with your business needs. What happens when you do this is smart business and it helps align expenses with revenue curves – cost is incurred when business activity – principally revenue – generates it.

Third Party Warehousing and Logistics is for Big and Small Business Alike

If you believe a big company should own its own warehouse or if you think small business operating from a basement warehouse is too small to outsource anything – think again! Large corporations place big emphasis on capacity utilization which is arguably a fundamental metric of any company. In small growing businesses, there comes a situation where what started to make it successful diminished. Why? Not because the market opportunity has changed, but because the business owner who focused on marketing and sales no longer has the time for, you guessed it, marketing and sales. Outsourcing may look like a cost addition compared to a home basement and garage warehouse situation, but ‘bigger thinking’ entrepreneurs know that their time has to be spent nearly entirely in places that add value and drive growth.

Whether you are a business manager in a large organisation or a start-up, outsourcing warehousing and distribution services to a third party provider can make good sense. The challenge? Investing the time to explore a cost benefit scenario that accounts for the real (hard and soft) costs of warehousing and distributing your products in-house.

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