Shared warehousing is an ideal way for businesses to save money when it comes to shipping, receiving, and storing products. This is because with a 3PL shared storage system the cost moves with a direct relationship to the volume.
This means that as a company gains revenue their costs will go up. This is a stable trend with just about any business model. It also means that when volume goes down the cost will go down.
There are some advantages and disadvantages to outsourcing storage and using a third-party supplier for shared warehousing. The advantage is of course that the transaction cost is much smaller with shared warehousing. Think of it as buying storage a la carte.
There is a disadvantage though in that companies who use one sole company to house all their products will have an easier time strategizing and manipulating their shipping and receiving protocol. Any company that uses a shared warehouse should follow these following tips to get the most out of their storage, shipping, and receiving protocol.
1. Provide correct information from the start
The hiring company should provide the warehouse with the correct information when it comes to every aspect of their shipping and receiving needs. Most of these warehousing companies rely on a standardized process for each company that they work with.
This means if the initial information that you give them is incorrect it could vastly affect the process. This could mean that the price may need to be adjusted down the line. This is not an ideal situation. This is why it is important to give correct information with the initial order.
2. Have goals right away
Having just one statistic that is used to measure success can be very beneficial. Usually when one goal is reached it has a positive effect on other aspects of the business as well. There is a domino effect when it comes to success with any business.
This is especially true when it comes to business enterprises with varying costs like shipping and receiving. If you keep your transaction cost as low as possible on each transaction it will surely help you reach goals in other areas as well. This is especially true when it comes to goals related to the bottom line.
3. Good communication
It is important to have a good communication protocol when it comes to shared warehousing. The warehouse probably has a high number of clients. Good communication will ensure that they are performing shipping and receiving tasks to their hiring companies’ exact wishes. Good communication is important is every industry. It is especially important when working with third party vendors.
Shared warehousing is a great strategy for any business that utilizes shipping and receiving and wants to reduce their cost on a transaction by transaction basis. It is not ideal for every company that uses storage. It may be worth some consulting to see if it is right for your business.
If you do decide to use shared warehousing be sure to use these three tips to make sure that you get the maximum benefit from it.