When a business is getting off the ground, the fulfillment warehouse is not the prime concern. Bigger priorities include building demand, securing capital, and recruiting a top-notch team.
But as the business grows, early choices concerning fulfillment operations can actually impede future growth. One example is choosing a smaller, local fulfillment warehouse to handle the early-stage needs of your business.
Let’s be clear – a local “mom and pop” operation can have decided advantages while your business gains traction. Service is typically excellent and you can visit the warehouse any time.
But there is a downside to choosing a partner for the present and not the future.
Small, local operations often cannot scale with your business. This puts you in the painful position of having to transition to a new provider just as you accelerate into the growth phase of your business. When you relocate inventory, change over systems, and educate new partners on fulfillment processes, operational gaffes can occur. These gaffes can disrupt the business and frustrate customers.
Can your fulfillment warehouse scale?
You want a fulfillment partner that can scale to meet your needs today and when INC magazine calls about a certain list. To determine if you’ve outgrown your fulfillment warehouse, or to help choose the right partner right out of the gate, here are a few questions to ask:
- Can your partner quickly and easily expand to additional fulfillment warehouses? The warehousing and fulfillment industry is dominated by small, local and regional companies. Most of these are owner-operated, single-facility operations. You can certainly contract with additional partners in other parts of the country as your business requires. But this creates complexity and adds management time.
- Does your partner have a warehouse management system (WMS) that can meet your future needs? Today’s small order volumes and single-unit shipments may evolve to a far larger number of very complex orders that could pull from one of thousands of SKUs. You’ll need systems to manage that complexity, and even integrate with warehouse automation equipment. Small, local operations tend to use manual picking processes and rarely have the capital to invest in a full-featured WMS system.
- Are your orders processed in 24 hours or less, even during peak volume periods? This is another limitation of a small fulfillment warehouse with limited staff. When demand spikes occur unexpectedly, it can easily overwhelm the operation and cause shipment delays. Larger fulfillment operations share staff across many different customers, so it’s easier to scale labor to meet demand. And engineering resources are often available to redesign processes and introduce labor saving automation to maximize productivity.
10-question quiz gauges ability to scale
If you’re wondering if you’ve outgrown your fulfillment warehouse, take our complete 10-Question Quiz: “Can Your Fulfillment Operations Scale?”
