Benefits of Outsourcing Warehousing Operations

, , ,

Many start-up firms and entrepreneurs invest in relatively small-scale warehousing operations or handle their logistics internally to reduce costs. However, there could come a time when outsourcing your warehousing operations becomes an attractive option.

Whether due to increased complexity, rapid growth or reducing risk, using a third-party logistics (3PL) company can reduce costs by eliminating the need to invest in new technology, labour, warehouse space, safety measures and transportation.

Utilising the expertise of professionals can boost efficiency and improve performance, which can produce longer-term effectiveness relating to customer satisfaction, expansion and revenue.

CEOs, CFOs and COOs, should regularly evaluate their supply chain and identify whether there is scope to outsource logistics and bring value to the business.

While you might be keen to develop an internal warehousing operation, mastering the growing complexity of logistics can be a challenge, especially while striving to maintain optimal performance in other business areas.

If you lack the resources, time or expertise to invest in internal logistics, why not outsource your warehousing operations?

What is Warehousing?

Warehousing refers to storing physical products or raw goods in a large building for sale or distribution.

Various businesses use warehouses to temporarily store their products before shipping them to other locations such as customer residences or a depot. Many eCommerce retailers also use warehouses to store goods they’ve purchased in bulk, reducing delivery miles and improving deliverability efficiency.

The demand for warehousing increased significantly following the COVID-19 outbreak, with the pandemic-fuelled eCommerce boom leading to a 614% increase in warehouse occupancy. According to recent projections, the global warehousing market will hit $326BN by 2024 due to the growing appetite for online shopping and shifts in consumer demand.

The eCommerce boom has also been linked to the 3PL boom. Logistics companies increased their occupancy by more than 42% in 2021 and now account for 20% of all warehousing space in Britain.

Unsurprisingly, the fastest-growing sector is online retailers, with ASOS, Etsy, Shopify and Ocado registering strong growth.

Although warehouse capacity for high street retailers did decrease in 2021, many have limited space to hold inventory in-store and utilise warehousing to keep up with demand, especially during high volume shopping periods such as the festive holiday.

Importance of Warehousing in Logistics

Warehousing is an essential part of the supply chain. When done effectively, it can improve your firm’s order fulfilment, protect against processing issues and increase labour productivity, leading to greater customer satisfaction.

Whether you own a B2B or B2C company, storing goods in bulk can help improve company margins by allowing executives to negotiate lower prices for large orders with suppliers.

Even if you own a small business, keeping inventory available amid fluctuating demand will ensure goods stay in stock and mitigate against the bullwhip effect.

The bullwhip effect can be costly to all organisations involved in the supply chain, resulting in:

  • Reduced lead time
  • Poor customer experience
  • Lost revenue
  • Missed production schedules

Order fulfilment companies seemingly face new challenges every day, with one of the most prominent issues now being improving delivery times.

As consumers have become accustomed to same and next-day delivery, outsourcing warehousing and letting specialists handle your order fulfilment requirements could save you money and boost your productivity.

Benefits of Outsourcing Warehousing

Still unconvinced? Here are eight reasons you should consider outsourcing your warehouse operations:

#1 Reduce Overhead Costs

Outsourcing warehousing means you’re only required to pay for the space you need instead of building/renting and running an entire warehouse yourself.

Unless you have a large inventory and need to constantly use an entire warehouse, outsourcing the job is a far more practical option. An external warehousing company is also more likely to have access to related facilities and materials, meaning you’ll also save on packaging and other servicing costs.

Besides the obvious “pay for what you use” benefit, you also won’t need to fork out employee salaries and utility costs.

#2 Better Use of Space

If you’re storing stock on your company premises or in your home, this could become an inconvenience as your business grows and you run out of floor or shelf space.

Utilising a warehouse would be a more cost-effective option. Also, as these facilities are designed to store goods, this significantly reduces the risk of damage and any potential implications with your insurance policy.

#3 Easy Scalability

Outsourcing your warehouse operations can significantly boost productivity and customer fulfilment by giving the back-office tasks of stock management, invoicing and delivery to specialists.

Most modern warehouses are equipped with advanced technology such as automation to streamline operations, reduce error and react swiftly to changes in the market.

Outsourcing warehouse operations makes supply operations more easily scalable due to increased flexibility, which is key to minimising loss and disruption, as recent years have proven.

#4 Improves Shipping and Delivery Speed

Benefit from quicker shipping and delivery times by outsourcing your warehousing. However, it’s best to choose the geographical location of the warehouse strategically to eliminate delays.

For example, those that ship by sea should find a port-centric service to keep delivery times as short as possible and keep customers happy.

If you deliver UK-wide, using multiple warehouses could pave the way for business expansion and increase your return-on-investment (ROI) by allowing you to serve customers all over the country quickly.

Whatever you decide, it’s essential to outsource a warehouse with good transport connections to ensure you can deliver goods timely.

#5 Increased Security

Outsourcing warehousing significantly reduces the risk of damage and lays the responsibility of the warehouse operations with the third-party company.

To maintain the credibility of their business, warehouse companies will prioritise security as those with a reputation for poor security will be the first to go out of business.

#6 Value-Added Services

Some warehouse providers offer additional services such as packaging materials, inventory management, reverse logistics and kitting, which means combining multiple products into a single package.

Working with 3PLs can give you the tools needed to operate in compliance with applicable laws and regulations while keeping costs low to ensure you remain competitive in the ever-evolving marketplace.

#7 Increased Flexibility

The flexibility that outsourcing warehousing offers reduces labour costs and eradicates concerns about providing specialist training to staff or managing employee levels during peak and non-peak performance periods.

Using an outsourced warehouse will allow you to hone your budget and dedicate more time and resources to other vital areas of your business, thus improving the quality of your service.

#8 Specialised Solutions

Warehouse companies are better equipped to handle large order volumes and special handling requirements such as heavy, fragile or hazardous goods as staff have received specialised training.

They can also react swiftly to changes in the marketplace and customer activity, which reduces disruption and losses while increasing peace of mind.


Or, contact us using the form below


Tell us your needs/requirements here...

4 + 4 = ?


what is ecommerce shipping

Impact of Supply Chain Inflation on Consumer Prices

, , , ,
Supply chains have struggled to meet pent-up demand arising from COVID-19, and as a result, the shortages of goods and services has caused upward pressure on prices. Until kinks in the supply chain are ironed out, consumers will continue to experience elevated pricing...
Black Friday planning

Black Friday 2022 – Guide for ecommerce businesses

Black Friday is fairly new to the UK, but since its popularity spurt a few years ago it remains an extremely busy period for retailers and eCommerce stores and has been quite the learning experience for many shop owners. Its huge spike in demand…
warehouse fulfiment

Benefits of Outsourcing Warehousing Operations

, , ,
Benefits of Outsourcing Warehousing Operations. For help with e-commerce fulfilment, warehousing, storage, pick and packing, call Pointbid Logistics 0121 326 7368
christmas warehouse hours

Warehouse Operating Hours During The Christmas Period 2022

Please note the warehouse operating hours for this forthcoming Christmas season.
Electric vehicles

New Car Market Impacted by Supply Chain Squeeze

Freight prices are forecast to increase by two to seven times high in 2023, despite prices already being at record highs. According to Freightos, the average cost of shipping a 40-ft container from Asia to Europe is...

Russia’s Invasion of Ukraine Impacting Supply Chains

, , , ,
Transport Tightens as Russia-Ukraine War Escalates - Military conflict between Ukraine and Russia will deliver yet another blow to global supply chains, particularly those heavily reliant on energy resources. Ukraine is the second-largest country in Europe, and the clash with Russia has already...
warehouse fulfiment

Retail Logistics – Trends, Challenges and Tips to Improve

, , , ,
A retailer's success largely depends on the relationship between brand and consumer, with the ability to meet their expectations around fast, affordable delivery likely to enhance customer loyalty and boost conversion.
Cyber Risks in the Logistics Industry

Navigating Cyber Risks in the Logistics Industry

, , ,
Many people wonder why logistics and transportation companies are targeted by hackers, especially when compared to other organisations, such as healthcare which store sensitive information that is valuable and protected by law...
ecommerce fulfilment services

E-commerce Fulfilment Services – Are They Right For You?

, , , ,
You may have heard about outsourced e-commerce fulfilment services, but you may not fully understand what it is and whether it's of any benefit to you and your business. But don't worry, take a look below where we have answered some of the most…
ecommerce online shopping

How to maximise e-commerce profitability in 2022

, , ,
How to maximise e-commerce profitability in 2021 - Despite the dramatic rise in online sales, maintaining profitability within e-commerce can still be a concern for business owners, particularly given the uncertainty surrounding post-Brexit trading rules and customers seeking value for money amid the pandemic.
inventory management

What is Inventory Control? Tips and Optimisation Techniques

, ,
Tips & Techniques for Inventory Control. For help with e-commerce fulfilment, warehousing, storage, pick and packing, call Pointbid Logistics 0121 326 7368
international shipping

How to Choose the Right Shipping Carrier for Your Business

, , , ,
Read our Guide on How to Choose the Right Shipping Carrier for Your Business. For help with e-commerce fulfilment, warehousing, storage, pick and packing, call Pointbid Logistics 0121 326 7368



0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *