10 September 2014
There are many businesses that see merit in contracting out their warehousing and distribution rather than trying to handle it themselves.
Most companies are in the business of selling some-thing, and where that something is a product, particularly one with a degree of seasonality, there are inevitably advantages and benefits to consider.
It is not uncommon for organisations with the skills and focus on marketing and sales to have a preference to divest themselves of non-core business. Most companies know their strengths and often sales & marketing are not comparable with product handling, storage, pick and pack.
The costs of running a warehouse are considerable, particularly if maximum annual capacity is the starting point. Unfortunately, when signing a lease it is typical to have a 6-9 lease year period, so the tenant needs to try and predict maximum capacity required 6-9 years hence. The kicker is that you have to pay for this capacity from day one!
In addition there are staff to pay, fork hoists, reach trucks, pallet racking and a thousand other things to factor in before working out the cost vs benefit analysis.
Where a Third Party facility is used, the client effectively pays for the space and labour that they use, without bearing any additional fixed costs. In addition, the client can rely on the knowledge that a company with the specific skills, systems, processes and people to handle their requirements efficiently and very cost effectively is acting in their best interests.
We’d be pleased to discuss further – contact Don on 021 924 114 email@example.com
News added by: Don Malcolm 10 September 2014