How Fulfillment Centers Can Reduce Your Labor Costs
The majority of companies involved in shipping products out to customers typically warehouse products themselves. This obviously comes at a cost. Any businessman can count the numerous expenses involved with storing inventory and shipping on site, from the building itself, to maintenance, utilities and upkeep. When you factor in labor costs too, it’s clear to see that you could save yourself a great deal of money by finding a way to reduce shipping costs.
The most important thing to any company has always been making money. As everyone knows, there are only two ways you can move the bottom line. You can either increase your prices, or you can reduce your expenses. Increasing prices is typically not a good idea as it would probably affect your sales. For this reason, cutting costs is often the only solution.
For a lot of businesses, labour wages tend to be the single highest expense. Many businesses pay workers to pick pack and ship products directly from their own warehouses. The drawback with this system is that it means paying staff to man the warehouse even when business is slow. Wasted time is the biggest drain on resources modern businesses face. Time spent by employees with nothing to do is not time well spent. One answer to this problem is to add shipping responsibilities with other duties that a worker might have. However, not all employees are good at multi-tasking and this can lead to a drop in efficiency.
You can abolish the need for in-house storage and shipping personal by using fulfillment centers, helping you cut shipping costs and saving you a lot of time & money. Fulfillment centers are dedicated to storing items for other businesses. They will then pick pack and ship them when needed. Since that is their sole purpose, their operations are often remarkably efficient. Fulfillment centers can save labor costs for all of the companies that use them because the same packing and shipping employees are put to work handling the shipping requirements of several companies, leaving less down time and ultimately less expense. Think of it like sharing warehouse employees amongst several businesses, and yet still having them ready to work whenever you need them.
Fulfillment Centers Can Help You Save Money
Fulfillment Centers can save you money and time regardless of the size of your company. Some people mistakenly think that fulfillment centers are used only by smaller companies that do not have the facility to store their own merchandise. While it is true that small companies sometimes find fulfillment centers valuable they are not the only ones to see the benefits. The savings achieved by companies using fulfillment centers only grows with the size of the operation. In fact, many of the most common users of fulfillment centers are extremely profitable larger companies and enterprises. Some of them have even gotten where they are today thanks to fulfillment services. Instead of paying for staff they may or may not need at any one time, along with holiday pay, health benefits and bonuses, they only pay for the services they actually need and use.
Perhaps the most significant way that using fulfillment centers saves you labor costs is the fact that fulfillment centers hire and train individuals to become experts at warehousing and shipping. Like contracting any other type of labor, you will reduce labor costs by using a team of people that know what they are doing and can do it right and faster the first time.
Jeff Ehrlich is the head of FulfillmentPlusNY which offers pick pack and ship operations for a diverse group of customers across the country.Contact Jeff for assembly services.
