What are the Advantages and Disadvantages of Warehousing?

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When you are deciding whether or not to outsource your company’s warehouse operations, it can be a difficult decision to make. After all, there are many factors to consider before coming to a decision. However, for small and medium sized businesses that have outgrown their own warehouse space or for those who are looking to expand into new markets in new locations warehouse can be a very effective, efficient solution for company growth. Learn more about the advantages and disadvantages of warehousing to consider before making your final decision.

What are the Disadvantages of Warehousing?

With every big decision, there will always be a couple of downsides. Warehousing benefits typically outweigh the cons, however, below are some issues you may find when outsourcing your warehousing.

Determining Which Type of Warehouse You Need

Determining which type of warehouse you need is not going to be an easy task. You'll need to have superb knowledge of your business operations, your goods, and the amount of storage you need to determine which type of warehouse is right for you. Picking the wrong option could result in a world of drawbacks. Luckily, through contract warehousing, you're not tied down to a long-term investment.

Furthermore, while this might take a little time to determine, there are many online resources to help you decide on the right contract warehouse. You can also speak to the people running the warehouse themselves and ask them questions to determine if they are the right fit for your company.

Less Control

With contract warehousing, many are wary due to the belief that they’ll have less control over their operations. While this can be true with the wrong provider, choosing the right provider, clearly defining needs, and understanding the services offered can help businesses attain greater control. Furthermore, the right warehouse provider can help your business achieve better customer service compared to if a business were to do it on their own. This is because of the changes in customer experience and the increasing complexities in the warehousing industry today.

What are the Advantages of Warehousing?

When you choose the right provider, there are many big advantages to warehousing that can significantly benefit your business.

Significantly Lower Investments

Contract warehousing prompts far smaller investments on a time-sensitive scale – making it an ideal option for smaller businesses.

This means that you don't have to make considerable investments to have sufficient warehouse space. Wholesalers, importers, manufacturers, and most smaller businesses that need product storage can benefit from contract warehousing – it's less costly, more productive, and requires less commitment overall.

Safety, Security, and Insurance

Leaving your products under the watchful eye of your contract warehousing will ensure maximum security.

When you're not the owner of your warehouse, you don't have to worry about security. All the stored products in the warehouse are protected with insurance, a security team, and dozens of cameras.

Location and Distribution

Another essential advantage for warehousing is the location. Storing your items in an on-hand, available warehouse is critical – and contract warehousing allows you to do so.

Starting and owning your warehouse is extremely expensive, but it's also time-consuming and takes a lot of planning. Most contract warehousing is located in multiple available locations, allowing you to access your stock and wares quickly – no matter where you are.

Flexibility and Scalability

Another great benefit of utilizing contract warehousing within your business is that its scalability is on par with its flexibility. You can use only as much space as you need. Different companies require different amounts of storage at different times of the year – this is a life-saving and cost-effective benefit.

Aside from the scalability, the flexibility that these types of warehouses offer is immense. As they serve multiple clients and already own a large-scale warehouse, the packages, deals, and options you have are far more flexible than investing in your own warehouse.

Lower Risks

Running a business is always a turbulent thing to do. No one can know what tomorrow brings for sure, and if your business seems to be grinding through, a costly warehouse is only going to drag you down. People don't usually pay mind to the amount of time, effort, and money warehouses mandate.

Using contract warehousing in your business will cost you far less, and thus lower risks if things don't go as planned.

Is Warehousing Right for Your Business?

Benefits of contract warehousing far outweigh the disadvantages. Warehousing can significantly increase customer experience and offers your business flexibility, scalability, lower risk and more. Learn more about if warehousing is right for your business by contacting our management team at JRC Dedicated Services. We are happy to give you more information on warehousing and answer any questions you may have.

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