The more your business grows, the more inventory you’ll need to store, and your on-site storage may not have the bandwidth to handle it. When you reach this point, you’ll face an important decision: Do you handle your storage needs by upscaling your in-house system or delve into outsourced warehousing?
While every business is different, we’re here to make the case for the benefits of outsourcing to a third-party warehouse. Find them below, and discover where to find local warehousing for your logistics needs.
What is outsourced warehousing?
Warehouse outsourcing refers to the act of contracting with an independent company to handle your storage needs. Typically, you’ll only pay for a set amount of storage in the facility rather than renting the entire warehouse space. Depending on the type of company you partner with, you might also have access to other logistics services, like distribution and deliveries.
Learn more about the different types of logistics providers on our blog post: How to choose the right transportation company for your business.
What are the benefits of outsourced warehouse operations?
Some potential benefits you can enjoy from partnering with a third-party warehouse include the following.
Outsourced Warehousing is More Cost-Effective
If you want to save money, paying another company to manage your warehousing needs may seem counter-intuitive. But in reality, a 2016 case report by G&D Integrated found that companies save an average of 9% on their logistics costs and 5% on their inventory costs by outsourcing to a third-party.
After all, when you don’t need to pay staff, lease space, or other warehouse expenses, you’ll have more funds to spend elsewhere.
Improved Flexibility
If your storage needs fluctuate throughout the year, a warehouse can offer more flexibility for storage. You’ll only lease as much space as you need at any given time and can scale up or down accordingly.
This arrangement is also ideal if your business ever needs to downsize since you won’t be on the hook for wasted warehouse space.
Quicker Fulfillment
Distribution warehouses have dedicated loading docks, giving warehouse staff easy access to the trucks for loading and unloading. Some warehouses also employ drivers or own trucks, meaning you don’t have to work with a separate contractor, and the trucks are on-site and ready to load. According to an August 2024 survey from Extensiv, over 50% of warehouses in 2024 can fulfill orders within 60 minutes.
Plus, many warehouses have central locations near major roadways, which allows your items to make it on their way faster.
A Broader Range of Services
Speaking of contractors: Many third-party warehouses offer more than just storage. Some warehouses are owned and operated by companies that also offer trucking, distribution, or reverse logistics services. So, you can save money by meeting multiple logistics needs with the same partner.
Improved Organization
Modern warehouses keep their facilities organized through a warehouse management system (WMS.) These internal systems keep track of every item that enters the facility and allows personnel to see where they’re located with a quick search. You don’t need to manually update spreadsheets to know what you have in-stock or where you have it.
Better Warehouse Security Measures
If you’re worried about keeping valuable items safe from would-be thieves, a warehouse can offer better security than an in-house storage method. For instance, warehouse staff can keep an eye out for any suspicious activity or personnel without badges. The warehouse may also have security cameras, alarms, and other measures to keep your items secure while they’re in storage.
Outsourced Warehousing is Specialized Storage
Some warehouses deal specifically with the storage of potentially hazardous materials, like chemicals. Moreover, they already implement industry-standard safety methods and employ staff trained in proper safety techniques. Therefore, you don’t need to put yourself or your employees in danger, and you can rest assured that your items are in the hands of experienced professionals.
Temperature Control
If you have temperature-sensitive items, specialized warehouses can offer cold storage or heating to keep your inventory safe from the elements. Additionally, you don’t need to pay for specialized storage areas or energy bills.
Outsourced Warehousing Provides Access to Industry Experts
You wear a lot of hats as a business owner. However, by outsourcing to a third-party logistics company, you’re taking a task off your plate.
Instead of figuring things out as you go, you’re partnering with a team of professionals who already know the industry inside and out. For instance, they can offer their advice on your specific needs and find solutions that are right for your business, all without the need to research on your own.
More Time for Your Business
Lastly, and perhaps most importantly, working with a third-party warehouse saves you valuable time and mental energy. When you trust that your storage needs are in good hands, you can devote more time to your company’s other needs and focus on building the best business you can.
A Rhode Island Warehouse for Your Needs
If you’re looking for a warehouse to meet your brand’s logistics needs in the New England area, N&D Transportation Company has your back.
We offer both long and short-term storage at our 12-acre distribution and warehousing facility in Rhode Island. We offer heating to keep items safe from the winter chill and can provide direct distribution throughout the New England area, including in Rhode Island, New York, New Jersey, and Eastern Pennsylvania.
With over 50 years of logistics industry experience, we’re happy to bring our knowledge to help your company thrive. Contact us today to learn more about outsource warehousing services.
