I was talking to one of our clients this week, which was really illuminating. He was talking about how easy it was to decide to outsource his fulfilment. He was talking about how he investigated getting a warehouse of his own. But felt he was too small to justify a whole place, but his products were too big for him to have them all at home. I then reminded him that warehousing not just about renting the shed. Here’s what we came up with as your ‘New Warehouse Checklist’, and the things you need to budget for;
- Rent
- Legal (premises negotiation)
- Licenses
- Registering for HMRC Fulfillment Scheme
- Rates
- Staff
- Insurance
- Utilities
- Racking
- Packaging
- Label machines
- Systems
The list goes on and on, doesn’t it?
The technology to run the warehouse – at least £1000 a month – is not inconsiderable but vital. Its got to integrate with your website, and all the carriers and any other marketplaces you might be on such as Amazon. Sort out your warehouse management system. You’ll probably need tech support to do this. And think of the time to learn it all. Its quite complicated this logistics lark!
Then you must negotiate rates with carriers, and to get good rates you need considerable volume, so that will be tricky. And the carriers are great, but not perfect. So, there’s logistics management time is needed too. So, you are going to need people. And people need management too. You’ve got the pressure and time needed to do all of the above. Covering team sickness. The list is endless.
And actually, all of this isn’t your specialty subject, it’s not what you should be focusing on, you should be focusing on finding a great product and marketing it to new customers. Not running your logistics. Its just good business sense. You can see why our client thought it was ano brainer to outsource to Diamond Logistics.
Actually, I have a brand new case study for this. A client of Hemel Hempstead’s was paying £1350 for her warehousing alone. Now for warehousing and despatch for her small business she pays £700 and that includes despatches. It’s not a big account but those savings are the same regardless of size. Halve your logistics overheads? Save all that time too? That must be good business.
Therefore, before you make the ginormous decision to get your own warehouse think twice. Come in to have a chat, have a look round, see how we help other clients just like you. And discover how by outsourcing logistics to Diamond is not just much more cost effective than running your own warehouse. It may be the best business move you have ever made.
