Finding warehouse space or fulfillment services can be tricky and time consuming. Plus, it can present a real bottleneck to delivering your product if this piece of your supply chain isn’t running at top efficiency. So it makes sense that savvy managers will look at commission-based brokers and consultants who offer to find warehouse space as needed for seasonal and other high-demand times. But not all of the providers offering to help you meet your needs are equal. How do you know what will be most effective for your business?
The Problem: Finding Warehouse Space and Managing Logistics
Fulfilling logistics needs is definitely big business. Logistics costs accounted for 8.3 percent of U.S. GDP in 2014, according to the Council of Supply Chain Management Professionals (CSCMP). Many seasonal businesses, smaller companies and start-ups need a varying amount of space for their products, and the ability to scale is important.
One Solution: Commission-Based Brokers
One business model that has recently emerged looks at warehouse space via the scope of the “sharing economy” and offers to find any amount of space, from small to large, for companies that need it.
The way they do this is by matching those businesses who need space and those who have it have sprung up via software-based solutions. You have a need, and the software finds a vendor who has open space. It’s essentially an AirBnB for short-term warehouse space rather than short-term vacation rentals. Sounds good so far, right?
The problem with these companies is that they make a commission when they successfully match up those with extra and those with not enough. Because they only get paid if they successfully match you, they may find a warehousing solution for you that doesn’t meet your needs or meet your expectations for quality and timeliness. You don’t want to be the equivalent of the guest who shows up to his AirBnB rental with family in tow to find it’s actually a party den in a run-down neighborhood.
Plus, they get paid for as long as you use the service! Furthermore, each time you need more or different warehouse space, you pay a commission fee to the matchmaking service. This can add up over time. You’re essentially paying for flexibility, even if you don’t need it. Over the long haul, ask yourself this question – Do you really think that you’re going to be getting the best price for service when the warehouse has to cover the costs of commissions for the brokerage service? The answer is a resounding “no”!
Finally, warehouse space isn’t all equal. Your choice of a warehouse facility can speed you up or slow you down. By treating warehouse space as a simple commodity, without regard to the actual service provided by the warehouse, you may make a critical error that will impact your delivery times and customer service.
A Better Solution: Fulfillment Lead Service Like Ours
In contrast, 3PL (third-party logistics) providers that carefully vet potential suppliers and charge a one-time fee for putting you in touch with a warehouse or fulfillment service may make better financial sense. The consultant is looking for a long-term match, and is helping you build a relationship with a vendor who can scale up to meet your needs, without charging you for that go-between service each time you need something.
Here’s how it works with us. FulfillmentCompanies.net asks you a few simple questions about what you’re looking for and your business requirements. We work with our pre-screened and high-quality companies to suggest a few that will be able to meet your current and future needs. Price quotes from these companies are free to you — you can compare the different options and costs and make the decision that is customized and best for your individual business.
Our goal is to help you make an informed decision that is right for you, and to help your business grow. Have more questions? Visit our website or contact us today to get more information on how we can help you meet your goals.