subject: Fulfillment Centers Can Reduce Shipping Costs [print this page] The vast majority of companies that ship their products to customers have traditionally stored merchandise themselves. Needless to say, this comes at a cost to the business. Any business person can count off the many expenses involved with on-site warehousing, from the building itself, to upkeep, maintenance and utilities. As you can imagine, removing these expenses can save you a great deal of money.
The most important thing to any business is always making a profit. As we all know, there are just two ways to move the bottom line. You can either increase your prices, or you can reduce your expenses. Unless you are in an industry that has absolutely no competition (an incredibly rare circumstance), the chances are you don't want to raise your prices if possible. Consequently, cutting costs may be the only solution.
For a lot of businesses, labour is typically the highest expense. Many businesses pay workers to pick pack and ship products directly from their own warehouses. The problem with this method is that it means paying staff to man the warehouse even when business is slow. One of the biggest sources of financial loss within businesses these days is time loss. Time spent by employees waiting for something to do is not time well spent. One answer to this problem is to add shipping duties with other obligations that an employee may have. Of course, not all workers are used to multi-tasking and this can cause a drop in efficiency.
You can reduce the need for in house warehousing and shipping personal by using fulfillment centers, sharply reducing the number of workers needed to run your operation and allowing your workers to focus on other, more important tasks. Fulfillment centers specialise in storing items until they need to be shipped, then packing and shipping them. As that's all they do, their operations are often remarkably efficient. In actual fact, fulfillment centers are so efficient that they can handle all the warehousing, packing and shipping needs of several companies at the same time, saving all of them time and money. Think of it like sharing a warehouse with a number of other businesses and yet still having staff available whenever you need them.
Fulfillment Centers Help You Save Both Money and Time
Whether your operation is big or small fulfillment centers can save you time and money. Many people see them as an best way for smaller, startup businesses to outsource their warehousing and shipping, allowing start-up companies to grow at a faster pace than their facilities would otherwise allow. The savings achieved through the use of fulfillment centers only grows as the size of the operation grows. In actual fact, some of the most common users of fulfillment centers are extremely profitable larger businesses. Rather than hiring new staff, predicting required manpower, training costs, health benefits, recruiting expenses and more, you will only pay for the storage and shipping services you actually use.
Perhaps the best thing about using fulfillment centers is the fact that fulfillment centers hire and train staff to become experts in warehousing and shipping. Just as when you outsource any other type of labor, you will reduce labour costs by using a team of people that are good at what they do and can do it right and faster the very first time.
by: Jeff Ehrlich.
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