When starting or scaling a business, it can be hard to know what to outsource and what to tackle in-house. Although it may be tempting to try to keep everything under one roof, there can be big benefits to outsourcing certain aspects of a business. One example is fulfillment. Product fulfillment is a large operation that requires a significant space and staffing investment. By outsourcing fulfillment, many businesses realize big benefits in cost and operational efficiency. But when does it make sense to outsource fulfillment? Here are a few scenarios:
1. You do not have the capital or time to hire. The average cost to hire an employee in the US is $4,000. This does not account for the ongoing costs of training, managing, and terminating employees. Outsourced labor can provide a quick, affordable, low hassle solution.
2. You want to scale your business but you’d need a bigger space for fulfillment. CNBC reports that the U.S. may need to add 1 billion sq. ft. of warehouse space in the next four years to keep up with demand from the e-commerce sector. Outsourcing fulfillment is a perfect solution because it helps a company smoothly scale operations without a major investment in space and labor.
3. You want to stay focused on core business goals. Managing an entire warehouse for product fulfillment is a full-time job. From the big picture decisions to day-to-day obstacles, fulfillment operations can become a major time suck. Outsourcing allows you the freedom to spend your time on running your business, perfecting your product, or meeting with investors.
4.You have high turnover or hard-to-fill positions. It can be hard to keep long–term warehouse employees. Budgets and operational efficiency are negatively impacted when you cannot find the right fit. Outsourced labor is a trained workforce waiting to be used.
5.Your headquarters location is logistically inferior. If you plan to ship your products nationwide, you will need a warehouse that can handle nationwide distribution. If your office is located far from a metropolitan area it can be difficult to logistically manage fulfillment and stay competitive. Contract fulfillment warehouses are ideally located for the best shipping speeds and rates nationwide, leaving you free to manage the rest of your business from anywhere.
These are just a few of the reasons that companies are increasingly outsourcing labor to cut costs and increase efficiency. If you are considering outsourcing your fulfillment operations, log on to www.pac.com/contractservices to learn more about our elite team of packaging professionals who are waiting to take on your project.