Top Ways to Cut Costs in Fulfillment: For In-House and Outsourced Services

How to cut fulfillment costsStaying within a budget is likely a fact of life for your business, despite maybe overstepping those boundaries on occasion. Part of this might relate to an important business aspect: Fulfillment.

If you’re doing fulfillment services in-house, the costs are no doubt already overwhelming. It’s not a recommended process if you’re still a small business that needs some help to grow.

Then again, maybe you’ve reached a point where your company is large enough now to handle some fulfillment duties. Do you know how to keep your expenses in check so they don’t run out of control and create financial jeopardy?

Even if you outsource your fulfillment to a third-party warehouse, expenses could still balloon if you don’t pay attention to what they’re doing. In this case, staying closely communicated with the fulfillment center is imperative to know exactly what your expenses are.

Here’s top ways to cut costs in fulfillment for both in-house and outsourced situations.

Start With an Audit

No matter if you do fulfillment in-house or outsourcing to a fulfillment center, you need to start with an audit to see where you could cut expenses. Auditing helps better determine what your business needs are so you see where to cut if you’re spending more money than necessary.

What you needed last year is perhaps different this year, meaning any tech you invested in then could maybe become eliminated now to save money.

Areas where you could cut or reorganize in-house or in a warehouse include direct and indirect labor, outbound and inbound freight, occupancy, and packing materials.

Your Receiving Costs

This is another cost usually associated with working with 3PL warehouses. Accepting and verifying deliveries of your inventory is a typical process in warehousing, though they’re going to charge you a fee for the service. The problem is, the fee is perhaps higher than you’re willing to spend.

It’s all the more reason to vet a fulfillment center before you start to work with them to compare their receiving fees.

Using Shared Space

A shared space warehouse can cut costs considerably, especially if your own in-house fulfillment is becoming impossible due to lack of space. Some fulfillment centers offer shared space warehouses to accommodate more than one client.

Doing so eliminates having to lease out space on your own to accommodate your growth. The shared space service also cuts costs considerably since you’re sharing costs with others. At the same time, you’re getting a warehouse that keeps you up on the latest fulfillment changes.

More Advanced Technology

Not all state-of-the-art technology is expensive, though the investment can save you money in helping to speed up deliveries. However, using advanced tech through an outsourced fulfillment center saves you on overhead investments.

Many warehouses that outsource give you a fixed rate while you still enjoy the latest technology to assure your customers get deliveries sooner than later.

Using What You Have in a More Productive Way

Sometimes you can save money by just being more productive with the things you already own on-site. It’s possible to do the same with a warehouse you partner with year-round.

By getting as much productivity out of what you already own, you’ll come out ahead, though you need to look carefully at various things. Areas like effective product replenishment, slotting practices for picking, efficient inventory management, quality assurance, and automation systems are just some things to streamline for savings.

Automation is a growing area in many industrial areas, and it reduces your work force costs while placing less burdens on existing warehouse staff.

Contact us at insightQuote to use our service to find the perfect fulfillment center that keeps costs at a minimum.

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