5 Tips for Choosing an Outsourced Warehouse Supplier
We’ve talked before about the benefits of using an outsourced warehouse, but once you’ve decided it’s time to do so, how do you go about choosing the right provider? Here are our top five tips for finding the right third-party warehouse supplier without getting lost amongst all the options.
1. Consider your current needs as well as your short and medium term plans
If you only focus on what you need today, you’ll likely be back to the drawing board a few years down the line. Save time later by choosing a provider that can scale as your requirements grow. Similarly, there are some services that you may not need, for example, if you have no intention of ever outsourcing returns processing, you could choose a provider that doesn’t offer this option. Here are some of the services you may need to consider when researching different suppliers:
- Storage: Storing your goods for a period of time. There are different kinds of storage depending on the commodity, so check potential suppliers can offer the right storage for your product.
- Cross-docking: Goods are stored while waiting for other shipments for the same order before they are consolidated and prepared for delivery.
- Palletising: Placing your goods onto pallets for easier handling and storage.
- Sorting: Organising goods by set groupings, e.g. Stock Keeping Unit (SKU)
- Labelling: Ensuring packaging is labelled correctly
- Pick and pack: Receiving orders, retrieving the products and packing for outbound shipment.
- Onward Distribution: Shipping your order to you or your customer.
- Repacking: Sometimes, goods arrive in packaging that isn’t suitable for delivery. Warehouses offering this service will receive your items along with replacement packaging and repackage accordingly.
- Ticketing: Picking different items and applying a ticket (possibly that of a retailer) to the item based on a set of instructions.
- Order fulfilment: Receiving orders from a customer and fulfilling it accordingly.
- Returns management: Receiving and properly handling returned goods on your behalf.
2. Determine your technology requirements
Establishing your technology requirements is critical when sourcing a warehousing partner. How do you want to communicate with your warehouse? You could need regular inventory updates by SKU, or you may need them to receive orders directly from your website for processing in real time. Ask each potential supplier about their Warehouse Management System (WMS), so you have a thorough understanding of its capabilities and future roadmap. What integrations already exist? Can it work with your shopping basket software? Does it work with specific marketplaces such as Amazon for example?
3. Be clear on your budget
However you decide to store goods, fulfil, and distribute orders or manage your returns; it will have an impact on your profit margins and bottom line. It’s therefore vital you are clear on what services you need and what budget you have for these services before you speak with potential suppliers. This way, you’ll be clear on which options offer a viable solution.
4. Location, Location, Location
The preferred location for your outsourced warehouse or warehouses may dictate which suppliers you consider. While it may be possible to fulfil your orders from one warehouse, cost and time may dictate that two or more facilities would be suited to your needs. Considering your entire supply chain will help you determine where your warehouses would be ideally located. For example, a port-centric warehouse can offer benefits such as reducing freight miles to an inland depot and distribution centre and prevents doubling back when goods are transported to logistics centres before retracing their steps to the customer.
5. Visit the warehouse yourself
When considering outsourced warehouse facilities, nothing can beat visiting the warehouse yourself to assess the standard of facilities and see their working practices in action. A professional looking website can hide a multitude of sins, so don’t skip the step of inspecting the warehouse just because you’re impressed with the quote and sales material, visit in person before signing on the dotted line. Look out for how employees work and interact, ask questions about processes such as storage, fulfilment, security and health and safety, meet the staff and look out for evidence of excellent communication. If you’re not sure what you should be asking your potential suppliers, here are a few sample questions:
- What type of racking and storage is available for [insert your commodity here]?
- What are your standard operating hours? How do holiday periods/ bank holidays affect these hours?
- What warehouse management systems can you integrate with?
- Do you provide any value-added services?
- What is the average turnaround time for an order?
- What is your courier policy?
- Are there any commodities not able to be serviced at this location?
- What are your security procedures?
- Do you work with specific marketplaces such as Amazon?
Choosing the right warehousing partner is vital and can have a significant impact on your company’s success so consider the tips above when choosing your warehousing partner to make sure your relationship is a good one from day one.
If you would like to consider John Good Shipping as your warehouse supplier or anything else, please contact us at firstname.lastname@example.org.