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How Contract Warehousing Helps You Expand Your Business

How Contract Warehousing Helps You Expand Your Business

If you plan to expand your business, you ultimately want to increase sales. There are two basic ways to do so, either on their own or in combination. First, you can literally increase your sales volume. Second, you can increase prices.

But, if you are in a position to increase prices and not suffer a loss in sales volume, why are you reading this post?!

So let’s talk about increasing sales volume. This too may be done in a number of ways. You can expand sales of current products, bring on additional product lines, and/or increase your markets.

For each of these main ways to increase your sales volume to expand your business, contract warehousing can be vital to their success.

6 Reasons Why Contract Warehousing is Key to Business Expansion

There is inherent risk in expanding your business, even in the best of times. Expanding too fast or slow can be problematic, if not fatal. Not having all the pieces in place, in the right measure, can also doom the effort.

The truth is, regardless of how accurate your forecasts and market research is, business expansion is a bit of a gamble. And that’s where contract warehousing comes in. It can reduce the risks you face in expanding your business.

Makes Your Business More Resilient

The overarching benefit in contract warehousing for business expansion is that it makes your business more resilient. We mentioned earlier that expansion is risky even when times are good. But, not only are we not in the best of times, we are in decidedly uncertain times. Your business must focus on resilience to deal with disruptions to your supply chain, labour issues and tightening money supply.

You need to make a financial commitment to support your expansion. Contract warehousing reduces that commitment in many ways.

Lowers Your Investment Costs

You likely need more warehouse space to support your expansion. (Below, we’ll talk about how contract warehousing can help even if you don’t need more space). Financing the investment in warehouse space is getting more costly as we speak. But not with contract warehousing space.

Improves Your Scalability

Business resilience means being able to weather unforeseen disruptions. Like if your expansion plans take a hit due to supply chain, staffing and/or market issues. Contract warehousing gives you raw warehouse space scalability to reduce your costs as needed to help you get past the disruptions and stay on track for expansion.

More Than Just Warehousing

Many contract warehousing offerings include options that can also help support your expansion. Picking and packing, fulfillment, transportation and even overall supply chain management can all be made part of your warehousing contract. In a way, just about the the only logistical thing contract warehousing can’t do is make the sales for you.

The Up-to-Date Systems You Need for Expansion

So what happens when you add entirely new product lines, new SKUs and new handling requirements? Your existing inventory and warehousing management systems must be able and ready to handle the extra load. With contract warehousing, the systems to track your business expansion are already in place. Of course, it eliminates the costs – and risks – of investing in new systems. But it also eliminates the cost of implementing those systems, including installation and training, which can also interrupt your expansion.

You Get to Focus on Improving Sales

We mentioned that contracting won’t make the sale for you. But what it does is give you more time, energy and resources to do so. With so many of the elements of business expansion tasks and risks minimized, you are in a position to better manage the expansion – and simultaneously make you business more resilient.

Want to learn more about supporting business expansion? Check out our article 4 Benefits of Using Third-Party Logistics Services.

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