What to Know Regarding Warehouse Distribution Services
If you are a retail startup, what is your plan for warehousing and distributing your inventory? Let’s explore a couple of ways eCommerce businesses approach fulfillment and inventory management.
First, there’s self-fulfillment. The idea behind this model is that startups begin by handling warehousing and distribution themselves – pick, pack, and ship orders without the help of a fulfillment provider. This also involves storage, ensuring enough product is kept in stock, and maintaining a healthy supply chain. While it’s cost-effective in the short term for small businesses to handle their own fulfillment work, as you grow, self-fulfilling orders will eventually slow you down. Plus, there are hidden costs to self-fulfillment: more time spent on packing and shipping means less time working on other parts of your business, such as sales, marketing, or customer service. Some companies outsource warehousing and distribution almost from day one; others make the move later when growth outpaces their abilities to keep up with demand, thus also affecting price points and quality customer service.
That brings us to second option, which is utilizing a third-party logistics provider, also known as a “3PL.” 3PLs do warehousing, picking and packing, shipping, returns management, and customer service for you. Some even offer storefront development or advertising services to help drive sales beyond the initial product launch. This is a good option if your business grows fast, and you don’t need (or don’t want) an in-house fulfillment team. 3PL warehouses are usually located near major shipping hubs (airports, seaports, or even railroad stations).
Implementing a good warehouse and inventory management system is also important. Without a single platform to manage all of your logistics services, you may find yourself using multiple systems that don’t talk to each other. This can result in miscommunication and delays that waste your time and money. It also doubles the time needed to learn and track information on different technology platforms. It’s imperative you utilize a platform that can link together all activities, and provide dashboards that help you understand and manage your distribution. A good 3PL will either have a system they can provide to you, or even modify to integrate with your existing system. By partnering with a 3PL, you’ll be able to properly scale your distribution as your business grows.
Aeronet Worldwide has 3PL experience you can leverage. Backed by our domestic and international distribution centers, we have the resources and expertise to manage products for a variety of different industries, and tailor a program that satisfies your specific requirements. You can read more about it, and get in contact with us here.
