In the business world, there are a wide variety of warehousing options for companies to choose from. Some companies purchase entire warehouses of their own, others rent out warehouse space from local companies, and still others choose to use third party warehouses. In today’s blog post, we’ll be talking all about third party warehousing and how it can benefit businesses.
Third party warehousing is one of the main components of third party logistics, or 3PL. This strategy has been around since the 1980s, and it has only gotten more strategic and accessible since then. It gives business owners the option to outsource warehousing to a third party in order to expedite services, reduce costs, and streamline processes.
The Benefits of Third Party Warehousing
There are several benefits to third party warehousing, including reduced costs, increased efficiency, and nearly unlimited room for growth.
Like the other components of 3PL (e.g,. inventory management and order fulfillment), third party warehousing saves companies a lot of money. By utilizing this warehousing process, they don’t have to buy their own warehouse or hire employees to run that warehouse! Furthermore, they don’t have to employ an entire shipping and fulfillment team. This cuts down on many expenses associated with owning a business.
Third party warehouses are managed by people who are experts in efficiency. They have the tools, equipment, and software it takes to streamline processes and provide fast turnaround times, quick shipping, and accurate fulfillment. All of these things lead to happier customers.
More Room for Growth
With third party warehousing, you don’t have to worry about outgrowing your storage room or current warehouse, since your provider takes care of warehousing. Additionally, now that you don’t have to handle the logistics of order fulfillment, you can focus your time and energy on growing your business.
What Kinds of Companies Use Third Party Warehousing?
Third party warehousing is not limited to any one kind of business or industry. Small businesses and large businesses in every industry around the world can benefit from third party warehousing. As a consumer, chances are that many of your favorite companies, from a small business on Etsy to a major retailer, use third party warehousing.
Third Party Warehousing vs. Drop Shipping
If you have heard of drop shipping, you might be wondering if third party warehousing is the same thing. It’s not. While there are many similarities between the two, there’s one extremely big difference: retailers that use drop shipping don’t possess ownership of their inventory. Retailers that use third party warehousing, on the other hand, do possess ownership of their inventory. (Learn more about drop shipping.)
Because they own their inventory, retailers who utilize third party warehousing have complete control over their products and prices; they just don’t have to deal with the nitty gritty logistics of getting those products into customer hands.
Is Third Party Warehousing Right for Your Company?
Third party warehousing is a great option for business owners who want to hand off logistics activities to someone else to handle in order to focus more on the other aspects of running a business. For business owners who want to maintain control of their own warehouse space and inventory management, third party warehousing might not be the right option.
Modern Express Warehouse Solutions
We offer a range of storage, distribution, and logistics options, as well as secure, long-term storage solutions for businesses in Northern California. Our team is available 24/7 to address storage status updates and questions via phone and email. If you’d like to learn more about our warehousing solutions, contact us today!