The Importance of Distribution Logistics
Distribution logistics is one of the most important aspects of the supply chain for any business. When it comes to order processing, warehousing, and transportation, you have the option of doing it yourself through your own warehouse or outsourcing it a third-party party logistics company. Here are the advantages of both:
Benefits of Owning a Warehouse Space
Cost.Owning your own warehouse space will not only save you money but it will also be the most cost-effective choice long-term. The overall benefits of managing the logistics yourself are far greater than outsourcing to a third party. Plus, there are a variety of warehouse management software today that can help you track inventory and custom orders to ensure order accuracy.
Control. One of the biggest benefits of owning your own warehouse space is having direct control over your staff and inventory. You can personally ensure that your products are stored, handled and taken care of properly.
Distance. When you build or purchase your own warehouse, you have the option of choosing a location that is convenient or close to your business’ headquarters. This allows you to better detect or rectify quality problems.
Tax Benefits. Your warehouse space is considered commercial real estate, which means that you can take advantage of numerous tax benefits on both the state and federal level.
Benefits of a Third Party Logistics Company
Cost. Utilizing a third party logistics company can save you the initial out-of-pocket cost of purchasing or building your own warehouse. On top of that, a third party logistics company can also get you better transport rates through volume discounts, saving you money.
Expertise. A third party logistics company is experienced in price negotiation and is knowledgeable in warehousing and distribution management. Companies working with them can benefit from their experience and the access they have to the latest technologies in things like inventory management, tracking, and reporting.
Time. When it comes to time, a third party logistics company can benefit your company in many ways. But primarily, they can help you devote more time and attention to other aspects of your company by eliminating all the time you need to spend managing the supply chain.
Scalability. Besides optimizing the logistics of your company, a third party logistics company can also easily scale and adapt to your business’ continuing growth. This provides you the ability to scale space, labor and transportation according to your inventory needs
Which Should You Use?
There are a number of aspects that can determine whether you should purchase/build your own warehouse or outsource to a third party logistics company. Factors such as your business’ existing infrastructure and the type of industry you serve all influence which decision is best for your business. At ReachOut Business Solutions, we can provide you the expert resources and counsel you need to choose the right distribution logistics for your business.
