If you have a business or are a trader who deals in a considerable amount of stock there are two things which you must organise, storage and distribution. Your stock needs somewhere like a warehouse to be stored whilst awaiting purchase and must also have some way of arriving and leaving your storage facility.
You have two options; you could bring both in house or you can choose a third party service provider to do both. Here are three reasons why you should always choose to outsource over bringing both in-house.
Workforce
When choosing to run storage and distribution in-house there is a number of things to consider regarding staff. You are likely going to have to employ new staff to work both in your warehouse and to drive your trucks/lorries. This is straight forward enough if you have the budget, but there is plenty of training which needs to be considered.
To drive a heavy goods vehicle in the UK you must have a valid car licence, be over the age of 18 and get a full Driver Certificate of Professional Competence (CPC). To find drivers with this qualification is obviously trickier than staff with a normal car licence, also it is an added thing to worry about if you decide to train existing staff to drive a HGV instead.
As for warehouse staff, there are a number of skills staff must be trained in to operate efficiently. For example, you wouldn’t want untrained staff driving forklifts, running the risk of damaging considerable amounts of stock and therefore losing your business money. Health and Safety Executive provide lots of guidelines and as you will find, your staff will need plenty of training and therefore extra time away from actual work to allow them to complete day-to-day jobs.
If you opt to outsource either of these things to a third party all of these workforce issues suddenly disappear. Third party organisations are staffed by fully trained professionals who you can just sit back and let them do their jobs. Signing up means you pay to allow them to do everything for you, all you need is to supply them with destination details and delivery times. This means you have a lot less to worry about, giving you plenty more time to focus on running your business.
Investment
Choosing to distribute or store your own stock means making some large investment. Depending on the location of your original office or workplace you are either going to need to invest in a warehouse, entirely new premises, build an extension warehouse or buy an existing warehouse. On top of this you are going to have to invest in a number of vehicles to transport your stock.
Speaking to third party logistical company Masters Logistical, they explained how “it can be more of a risk for businesses to go it alone because the costs can massively deviate from what they originally budgeted with building new premises and running vehicles. You can’t plan for things like vehicle breakdowns, warehouse repairs or even building setbacks which will end up being added expenses.”
“3rd party logistics companies like ours are much safer because you sign to a deal which is a flat rate of payment which can allow some flexibility in accordance to how much stock you have at different times of the year”
Not only could it end up being cheaper choosing to outsource, at least you are left in the assurance that you only need to pay your annual or monthly fees and everything is taken care of.
Location
As a business who trades in large or small quantities of stock, your location is important. Your stock needs to be strategically positioned so that it is near good transport links such as motorways, docks or airports. However, there is no guaranteeing your initial business is in a strategically helpful place, therefore attaching a warehouse and transporting from that location will almost certainly put strain on your delivery staff.
The beauty of choosing to outsource is that all the best logistical companies are easily accessible therefore their transporting of the stock is much slicker and efficient, making your business run smoother and keeps your clients happy.
These are just three of the reasons why outsourcing your logistics is much better than bringing everything in-house, but there are plenty more such as shortened administration and reduced insurance bills. If you are a new business looking to expand then the first thing you should consider is third party outsourcing before you take the risk of building warehouses or buying a fleet of lorries.