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Business warehousing has come a long way since the middle part of the 20th century. Even more changes have taken place during the 21st century. The idea of business warehousing is no longer one that is limited to the individual companies; many companies have chosen to outsource their warehousing to supply chain logistics companies rather than maintain inventory on their own premises.
While this may seem a frivolous expense when compared to the cost of maintaining a staff of workers and fleet of transportation vehicles, quite the opposite is true. It isn’t difficult to figure out how outsourcing all business warehousing needs might be more economical for the companies.
How can outsourcing business warehousing be beneficial to a company’s profit margin? Even if you look at the minimal salaries companies usually pay warehouse workers, there is still a financial savings because when they outsource supply chain management services, they can eliminate the employees who handle those functions, thus placing them in another capacity where they will be less of a financial burden to the company. In addition, any employees who are eliminated because of outsourcing means not only a savings in payroll but also in benefits.
While there may be some additional expense at the onset of outsourcing business warehousing, it will pay for itself in the long-term. For instance, if the company lays off warehouse workers they will possibly face higher unemployment assessments as a result of those claims. However, the lower cost factors the company will face as a result of using a third party for business warehousing will eventually offset those initial costs. In addition, the company will not have to spend time training any new employees when someone leaves or assumes a new position within the company. All of these factors play into the overhead costs a company faces when they maintain their own staff of business warehousing employees.
In this time of high unemployment companies are looking to save money so they can avoid terminating any of their employees. One of the first places they may look to do this is within their business warehousing sector. If they outsource those functions, they can avoid layoffs in other capacities within the company. They may even be able to place those employees in other capacities within the company, especially those who have the skills that will allow them to perform other functions. The others will have a good opportunity to find employment within the business warehousing sector of the many fulfillment companies that are opening nationwide.