Every business works in a unique way; some benefit from contract warehousing, while others seek multi-client (shared) warehousing solutions to fulfill their requirements. Multi-client warehousing allows you to share the space with other customers and offers a flexible, affordable method to store your products. Here’s what you need to know about multi-client warehousing and distribution services, and how it differs from dedicated warehousing.
The Difference between Dedicated and Shared Warehousing
A dedicated warehouse, or a contract warehouse, deals with the management of a warehouse facility occupied by a single tenant. You may own or rent the space, but you will have to pay for all labour, operations, technology implementations, equipment, and value-added services. A shared warehouse is the opposite. Also known as a multi-client or public warehouse, it is where multiple businesses can operate under a single distribution centre. All the tenants can enjoy shared labour, capital equipment expenditures, material handling equipment, and more.
In the first option, you manage all the costs of running your warehouse and deal with the expenses yourself. It usually requires a multi-year commitment that includes labour structure, equipment expenditures, a warehouse management system, and all operational processes. The building lease can be tied to the client or the third-party logistics provider, but a contract agreement must be made.
In the second scenario, you can enjoy the flexibility of shorter contract terms. The third-party logistics provider will own the facility and equip it with everything that you need. The costs are spread out evenly across all the companies that use the facility, and many of these costs become variable and fluctuate with the volume and activity levels of your business depending on the time of year.
Advantages of Multi-Client Warehousing
Compared to dedicated warehousing, shared warehousing offers shorter, more flexible contracts. This makes it more useful for startup companies, as well as those with a smaller client base, seasonal products, or products where demand fluctuates. In any of these situations, shared warehousing is the better option. Shared warehousing allows you access to space that can be reduced or increased to match your personal business demands. Multi-client warehousing provides a solution to rapidly changing distribution needs, without the commitment to a long-term contract. It is also a great option for businesses that require several smaller locations, offering multiple distribution points instead of one large warehouse.
Improved Service and Efficiency
By allowing a third-party warehousing company to help you, you gain improved service and efficiency from logistic experts, access to analytics tools, and tighter control over your inventory. By teaming up, you can maximize space management and reduce costs, allowing you to give better service to your customers. Third-party logistics providers also have adequate staff that are professional, experienced, and knowledgeable to take the worries of storage management off your shoulders.
Cost is one of the biggest challenges for growing businesses. Multi-client warehousing provides a solution by allowing you to share your space with other businesses. By sharing labour and spreading our operational costs among all the customers, you can achieve significant savings. You will only be paying for space that you use, which means there are no large, expensive warehouses being paid for that are standing half empty. Shared warehousing eliminates the need for you to hire your own staff to take care of your warehousing responsibilities such as packing, storing, and distribution. If you require specialized tools, equipment, or additional services, you can share these costs evenly amongst the other customers.
Disadvantages of Multi-Client Warehousing
One of the primary drawbacks of multiple fulfillment locations are the fixed costs. Sharing warehouse space with other companies means that you may have to pay for double the inventory space and handling costs. Although the amount is shared with the different clients, you may be paying for more than you actually need.
Space availability and competition is another disadvantage of multi-client warehousing. You may have your eyes set on a specific distribution centre but may not be able to get the access you want because other companies have sought after it as well.
Another concern is system incompatibility. This may lead to problems with communication between you and the third-party logistics provider, as well as the other clients using the distribution centre.
Partner with Lean Supply Solutions for Multi-Client Warehousing Solutions
Despite some drawbacks, the benefits of shared warehousing for small or seasonal businesses outweigh them. The flexibility and a low level of commitment is exactly what a small or seasonal business requires. Your business could change on a dime, which means that you need to be able to access scalable services and the best level of service to keep your customers coming back. With the right third-party logistics provider, you can reap the benefits of multi-client warehousing services.
Lean Supply Solutions will integrate your supply chain for you, providing the services you need. We will assemble and manage the resources, capabilities, and technologies of your organization with the assistance of external service providers so that you have expertise to manage your resources. Our services include contract logistics, e-commerce fulfillment services, inventory planning and management, supply chain management and optimization, pick-and-pack services, freight and warehousing, reverse logistics management, and more.
When you’re ready to reap the benefits of multi-client warehousing, Lean Supply Solutions is ready to help you. To learn more about warehousing and distribution in Toronto with our 3PL logistics services, or to ask any questions, contact us today.
- Published in Blog
Working in the retail and distribution industry means paying attention to ensure that your customers have a great experience. You cannot achieve success if people don’t shop at your store. That’s why one of your primary goals should be to leave your customers happy every time they interact with your business, whether it be online, or at your brick and mortar store. When it comes to e-commerce fulfillment services, you need to stay on top of everything. E-commerce is transforming the retail and distribution industry, and here’s what you need to know.
How e-Commerce Is Redefining the Retail and Distribution Industries
Personalized Customer Experience
Personalizing the customer experience has never been more possible than with e-commerce. There is a new class of retail stores that provide experiences that offer higher value than what can be found online. The ability for customers to interact with your products or services through product demos and other special events is extremely valuable. A brick-and-mortar store can support your online store by allowing your customers a more hands-on experience with your products. There are retail companies that sell online and carry no dedicated inventory; however, their customers can go to their physical store to pick up their online orders and make returns if they need to. While they are at the physical store, for instance, a customer can enjoy a complimentary beverage and talk with tailors on site. The personal touch goes a long way!
Analyzing the Data
The customer experience can only be enhanced by analyzing data. The process can be as simple as using cameras and surveys or by using sensor technologies and other more sophisticated methods. Data solutions do not always have to be expensive or complex. For example, a retailer might track the path that customers take once they enter their store. After analyzing the data, they may realize that the reason why some products aren’t selling as well is because there is a table blocking customers from accessing the items. Analyzing this data helps retailers to problem-solve and gives them the tools to train their staff to encourage customers to visit sections that may be less visible.
A recent study discovered that 92% of shoppers prefer stores that connect to mobile experiences. It also found that nearly 75% of customers want a mobile platform to shop for quicker checkout times. By digitizing your physical infrastructure based on customer experience and convenience, you can make the most of mobile technology. Using both platforms will help you be more successful and have a better response from your customers. Your mobile experience should be easy to navigate to help your customers acquire your products as quickly as possible.
Guide to e-Commerce Shipping and Fulfillment
Shipping Rates and Methods
It’s important to consider your shipping rates and methods as you prepare for e-commerce fulfillment. Will you make your customers pay the full cost of shipping or will you offer free or flat rate shipping to make it more manageable for them? The latter options may cost you more without the right connections in the supply chain, but charging the full amount of shipping to your customers could increase the rate of cart abandonment.
Packaging options is another area to consider with e-commerce shipping and fulfillment. You should make sure that the packaging isn’t too heavy, which could raise your shipping costs, but also not too weak, so that your products risk damage. You may want access to a variety of packaging options, so that you can make informed decisions about each kind of product.
Insurance and Tracking
Depending on the kind of products that you are selling, as well as their value, shipping insurance and tracking may be something you require. These features offer a great deal of security, so that you know where your products are along the way. It also provides a resource in case any of your packages get lost or damaged. Some services offer complimentary coverage for up to $200. You can also consider purchasing insurance on big-ticket items alone, so that if these items get lost, you’ll have coverage. It is best to compare various courier prices to see which options are best for you. Some shipping services include insurance into their price.
Labelling Your Packages
After figuring out your presentation, packaging, carrier, and costs, you will need to decide how you want to label your packages. If you are new to e-commerce, you may simply write the shipping and return addresses on the packages by hand. This may be manageable while you have very few orders, but once your business starts to gain momentum, writing by hand can be time-consuming, tedious, and not scalable. By teaming up with a third-party logistics provider, you can benefit from packaging and labelling services. They have the equipment and processes necessary to ensure that the right labels are put on your packages without you having to write with a sharpie.
Choose Lean Supply Solutions as Your Third-Party Logistics Service Provider
When it comes to e-commerce, you need to look at the big picture and consider what really impacts the customer experience. Once you find these challenges, it’s important to consider how your company will address them. Customers pick up mistakes and watch to see how quickly you correct them. The points mentioned above can help you prepare for unforeseen challenges that could impact your customer service.
There are a variety of tools and technologies available to improve your operations for greater transparency and efficiency, as well as increase your customer relationships. Working with a 3PL provider can help you deal with challenges that come along the way in terms of costs, logistics, customer satisfaction, and changing expectations from suppliers and consumers. With their experience and network, they can find you quick and effective solutions and bring you a variety of advantages such as supply chain management software and technology.
When you’re ready to benefit from these services, Lean Supply Solutions is ready to help you. We rise to the challenge of meeting our clients’ needs through our services which include product fulfillment, warehousing and distribution, e-commerce fulfillment, warehouse pick and pack, order fulfillment, and more. To learn more about outsourcing to our e-commerce fulfillment services in Canada, or to ask any questions, contact us today.
- Published in Blog