Many businesses will get to the stage where they have to review their logistics and fulfilment processes. That may be due to rapid growth and expansion, or it may be because you have been tasked to cut overheads. Every business owner or senior executive will already have insights into how their businesses are run and have a mental note of the potential pros and cons of outsourcing their warehouse operations.
One of the clear advantages of outsourcing your warehousing and fulfilment processes is the ability to tap into the shipping accounts of the courier networks. When you combine the throughput of a number of businesses into the one account then these economies of scale can be passed on to the individual business, with significant cost savings.
When you own and manage your own warehouse seemingly the only flexibility you have when it comes reducing cost is the reduction in staff you employ. You could turn some of the lights off and the heating down, but this is not always practical. Reacting to slowdowns in your business when it comes to staff numbers can be also be a difficult process.
Cannons offer a solution that allows you to reduce those costs related to how much stock you hold and on performance. You won’t have to pay for empty shelf space as you reduce your seasonal stock levels nor will you have to pay staff to wait for orders to come in or try and accurately predict the most efficient and cost-effective staffing levels. You won’t have to train them up and manage order-processing downtime related to your fulfilment logistics processes suffering interruptions.
The persuasive positive point of outsourcing your warehouse is that costs are clearly related to your anticipated and actual performance. When you outsource your fulfilment operations and integrate them with your order processing systems then there are undoubted efficiencies. Orders may be picked, packed and despatched at all times of the day and night, even weekends.
One of the greatest problems small businesses have when they start to become successful is the desire to micromanage every aspect of the business. It is essential that you outsource and remove from the front of your mind anything that doesn’t attract more customers. Picking and packing orders yourself or acutely controlling that process will not help you expand your business. Exporting sales and cost data and making sure you’re on the right track operationally and financially is a far better use of your time.
After you have settled into outsourcing your fulfilment processes then you can have much greater focus on running your business and leveraging all the other advantages of outsourcing into expanding into new markets.
Just as with the likely savings on your shipping costs, you will have to calculate your current storage and fulfilment overheads. Make sure you also include the utility, insurance and administrative costs and packaging costs.Looking back at the work needed above to establish your variable costs, it becomes apparent that if you can easily export them from a service that you can have a much greater insight and control of your costs.