How Fulfillment Centers Can Cut Your Labor Costs

The vast majority of companies that ship their products to customers have always stored their own stock. This obviously can be quite expensive. The list of expenses associated with storing, packing and shipping your own inventory can be as long as your order list from the building itself, to upkeep, maintenance, utilities, etc. you can save yourself a whole lot of money if you can find a way to reduce shipping costs.

Business has always been about making a profit. As everyone knows, there are only two ways you can increase your profit margin. You can put your prices up, or you can cut costs. Unless you happen to be in a business that has virtually no competition (a truly rare circumstance), odds are you don't want to raise your prices if at all possible. So, reducing costs is often the best solution.

Labour is the single highest expense for most businesses. For businesses that need to pick pack and ship products, paying employees to be on site when items need to be shipped often means paying them even when things are slow and no product needs to be moved. One of the greatest causes of financial loss within businesses today is wasted time. Time spent by employees with nothing to do is not time well spent. Of course, some companies give the staff members responsible for packing and shipping other responsibilities. However, not everyone is good at multi-tasking and this can cause a drop in efficiency.

Using fulfillment centers will eradicate the need for in house storage and shipping personnel, helping you reduce shipping costs and saving you a good deal of time & money. Fulfillment centers focus on storing products for other businesses. They will then pick pack and ship them on demand. As that’s all they do, their operations are often remarkably efficient. Fulfillment centers can save labor costs for every company that employs them as the same packing and shipping workers are put to work handling the shipping requirements of several companies, leaving less down time and ultimately less expense. It's like sharing a warehouse with several businesses but still having staff ready to work whenever you need them.

Fulfillment Centers Can Save You Money and Time

Whether your company is big or small fulfillment centers can save you money and time. Most see them as the ideal way for smaller, start up companies to outsource their storage and shipping, allowing start up companies to grow at a faster rate than their facilities would otherwise allow. The savings realized by companies using fulfillment centers will grow with the size of the operation. In fact, some of the most common users of fulfillment centers are successful larger companies and enterprises. Rather than hiring new staff, predicting required manpower, training costs, health benefits, recruiting expenses and more, you will only pay for the storage and shipping services actually used.

Perhaps the best way which using fulfillment centers saves you labor costs is the fact that fulfillment centers hire and train individuals to become experts at warehousing and shipping. Just as when you contract any other kind of labour, you will reduce labor costs by using a team of people that know what they are doing and will get it right the very first time.

By: Jeff Ehrlich

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Jeff Ehrlich is the owner of FulfillmentPlusNY which operates fulfillment services for a wide range of customers globally.Contact Jeff for pick, pack and ship services.