Globalization has never reached the peak it is at today. Technology is advancing from strength to strength, making the impossible attainable. E-commerce is rising in popularity and in progress. With all these complicated changes happening in the business world, supply chains have grown to become quite complex and fragile systems.
With the many challenges to the supply chain and global threats beyond anyone’s control, operating a successful supply chain is one of the most difficult things any business has ever had to do. However, staying current in this competitive world, it has never been more essential to the success of a business.
However, many businesses today are beginning to look outside their own organization to outsource various aspects of their operations. One such aspect is that of logistics.
Outsourcing Is Taking a Lead Role
These days, freight costs average around 10 percent of the cost involved in selling a product. So, logistics teams have their work cut out trying to balance costs while remaining profitable. Not every average businessperson has the in-depth knowledge needed to handle the challenges of this volatile industry. Therefore, many people are outsourcing their logistics to other specialists.
Many have found there are benefits in regard to cost, service, and control and have found this outside help to be of great advantage to their business. To learn more about the specifics of logistics outsourcing, click here.
In this article, we will now consider the pros, cons, and things to think about if you are considering outsourcing your logistics to an external provider.
The Advantages of Outsourcing Logistics
There are several reasons why many companies are looking for external providers for their logistic services. Here are just a few:
#1: It Saves You Time and Money
Time and money are two of your most valuable assets, and outsourcing your logistics services can help you save both. You don’t have to spend money renting or running a warehouse. It’s the fulfillment company that will manage your inventory and store products.
This means that you won’t have all the extra costs of unused space or warehouse workers. With that in mind, you can quickly check stock levels while investing your saved time on boosting sales and expanding your business.
#2: It Can Help You to Expand Your Business
Growing business is the top goal for any company owner. And with logistics outsourced to another company, it’s a lot easier to scale and expand your online business. The logistic provider will have no limit as to how much stock they can hold and how many orders they can fulfill. You can even take your business to a global scale with certain logistics providers!
#3: It Doesn’t Take Long to Get Going
The set-up of a logistics integration doesn’t take as long as you make expect. Many logistics providers will be able to quickly integrate with the platforms you currently use for stock and sales. Therefore, your global distribution will be up and running in no time!
#4: You Will Still Have Control Over Logistics
Outsourcing your logistics services doesn’t mean that you hand over all control and that things will happen without any participation on your part. You will be able to track all orders and inventory levels, and you can set guidelines when it comes to packaging and labeling.
The information you have of order status can be shared with your customers, and you can manage subscriptions easily. You’re not handing over your baby; you’re simply letting another company give you a helping hand.
What Are Some Disadvantages of Outsourcing Logistics?
It’s important to have a balanced view of this logistics solution. There are perks, but it’s not a perfect answer. There are some disadvantages that you need to be familiar with so that you can make an informed decision about how to move forward:
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You Will Need to Let Go of Some Responsibility
There will be a substantial part of your customer dealings and communications that you will need to hand over to the logistics provider. If there are errors with orders, that is your responsibility as the seller, and it is not the logistic provider that is to blame.
The logistics process will only be as good as the provider you decide to employ. If there’s a delay in packaging and delivering, that is out of your hands, and there’s little you can do about it.
With this in mind, it’s essential that you get all the information you can in order to pick a reliable provider with a low error rate.
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It Is an Extra Expense
As discussed, outsourcing logistics will save you money, but it will cost you some money too. If you’ve been used to handling these processes yourself, the extra expense of getting a third party to handle them is something you need to weigh up and consider.
However, if you’ve begun to feel overwhelmed with your orders and the responsibility of fulfilling them, it may be time to hand over the reins. Despite the expense, you will soon see the financial benefits as your business is able to keep up with influxes of orders, and you can focus on marketing and driving sales
Who Should You Outsource to?
If you’ve concluded that outsourcing your logistics is the way to go, how do you go about choosing the right provider? It is clearly an important decision to make as the service of your provider will ultimately reflect on you as a brand and business.
Therefore, do thorough research and ask other businesses for their suggestions. Get the best value for money and compare prices and offers from a few providers that you can shortlist. Get in touch with your potential providers and speak to them directly. Ask questions, ask for information, and ask for anything you need that will help you to make the best decision for your business.
Essentially, you need a reliable provider that will support your business and expand as your need grows. Making the right choice when it comes to outsourcing logistics could take your online business to the next level!
