Top Five Reasons to Hire a Fulfillment Center
These five best practices from the direct fulfillment industry can help almost any business grow profits without increasing overhead.
Company leaders often bristle at the thought of paying for outsourced distribution and fulfillment services. Team members at new companies often believe that shipping finished goods is something fun that can be handled in a stock room or in an adjacent staging area. Veteran businesses may have sunk costs in warehousing and shipping facilities where employees have done things their way for decades. For both kinds of companies to compete in todays marketplace, outsourced fulfillment centers offer five key advantages that outweigh the emotion of "going it alone."
Despite public overtures to the contrary, some states and counties still challenge new businesses with geographic laws and descriptions. City wage taxes, levies on specific goods, or limits on business conduct can hamper corporate expansion. Strategically located distribution and fulfillment centers help overcome these hurdles by placing goods just across from the boundaries of crucial territories.
For start-up companies and other expanding businesses, high shipping costs can often break critical deals with clients. By amortizing shipping and handling for all of their clients into centralized accounts with major freight companies, fulfillment centers can pass along significant discounts. In many cases, these savings can offset the costs of hiring a fulfillment center to handle product logistics.
Compliance with the latest federal and state safety and labor guidelines can keep multiple full time employees occupied in any company. Companies that outsource product fulfillment dont have to worry about maintaining expensive certifications or completing ongoing safety training. Employees at quality fulfillment centers can get trained routinely on material handling, ergonomics, and other essential skills. Because overhead costs for these training programs are shared among a fulfillment centers clients, the net cost of compliance adds only a marginal amount to the cost of each shipment.
Maintaining a flexible labor pool can challenge even experienced companies. Businesses with strong seasonal shifts or with a sudden hit product can find themselves faced with sudden staff shortfalls. When product fulfillment services develop strategies to accommodate all of the customers housed at a shared facility, workers enjoy more consistent hours and better pay. More highly skilled, satisfied workers help client companies make timely shipments at lower per-unit costs.
Todays most sophisticated distribution and fulfillment services can handle product "kitting" or even light assembly of finished goods. For instance, if a product consists of multiple parts from multiple manufacturing centers, they can be pulled together at a central facility closer to end users. Assembling or packaging a complete kit at the last possible step before fulfillment to a customer can trim excess shipping costs. Some companies even use this kitting strategy to blend product elements from multiple manufacturing sources during periods of peak activity.