Contract Warehousing vs Public Warehousing
Contract warehousing provides space and resources dedicated to a single operation as opposed to a public or third-party logistics (3PL) warehouse, where multiple companies share space, equipment, and personnel. With a contract operation, competition for space availability, dock appointments, and material handling personnel is eliminated.
Benefits of Contract Warehousing
Utilizing a contract warehousing provider will reduce costs, improve operational performance, and remove the limitations associated with public warehousing. It will also allow your company to focus on its core competency. Contracted warehouse space is advantageous if any of the following problems affect your operation:
- Difficulty recruiting and training warehouse staff in a tight labor market
- Sub-par warehouse technology lacking critical functionality and customizability
- Limited capital to allocate towards material handling equipment (MHE), proper racking, and technology
- Operational inefficiencies due to facility location and layout
WOW Logistics® Contract Operations Solution
Contract Operations, WOW Logistics’ contract warehousing service, has the people, processes, systems, and tools to drive efficiency and cost-savings within your operation. With our solution, you will benefit from the following:
The Right People – Our experienced logistics-industry recruiters know how to find top talent, and our proven onboarding and training programs heavily focus on safety, best practices, and standard operating procedures. We also help foster the success of your operation with a temporary startup management team.
Innovative Technology – WOW’s top-tier warehouse management system (WMS) is customized by our in-house IT professionals. Our WMS offers maximum monitoring capabilities using real-time, customizable reporting and the ability to adapt to the needs of any operation.
Optimal Equipment Selection – MHE, racking, and technology are expensive. We help minimize these costs by covering the upfront capital investment and spreading the cost over longer periods. Our engineering team analyzes your operation to determine the equipment that best fits your needs.
In addition to Contract Operations, WOW Logistics also offers integrated supply chain solutions focused on real estate development, inventory financing, and transportation brokerage.
Explore our website to learn more.
Defining Inventory Financing
Inventory financing is a form of asset-based lending, such as a revolving line of credit or a short-term loan, used to fund inventory purchases. The service is primarily utilized by businesses that are required to pay suppliers before selling product to their customers. While the line of credit or loan is active, the purchased inventory serves as collateral for loan security if the loan cannot be repaid.
Why should I finance my inventory?
Inventory build-ups restrict large sums of capital for long periods of time. If your company self-funds its inventory, your product carrying capacity may be limited, which hinders growth potential. Moreover, inventory continues to incur costs through inbound transportation and storage/handling fees.
Financing your inventory enables you to meet the needs of your customers while also growing your business through strategic initiatives. Consider utilizing this service if you need any of the following within your operation:
- A cost-effective source of capital for strategic business initiatives
- The ability to store your inventory for a certain amount of time before selling it
- A reduction of your working capital without decreasing your inventory
- Locked in favorable prices to minimize the impact of commodity price volatility
An inventory financing provider will help you address these needs so you can direct cash back into your business. Not all inventory financing services are created equal, however, and it’s important to thoroughly evaluate all available options so you can select the best solution for your business. Items to compare when determining the most cost-effective choice include advance rates, interest rates, fees, and restrictions.
WOW Logistics® Inventory Financing Solution
The WOW COMMODITY PURCHASE PROGRAM®, WOW Logistics’ inventory financing service, eliminates the need for you to use your internal capital to fund inventory. We purchase inventory at 100% of its value, as opposed to the 60% advance rate offered by most banking institutions. We require no upfront equity or monthly payments, including storage and handling costs, until your product sells and ships. Our solution also offers you the ability to flex up and down matching inventory build-ups with no non-use fees or long-term commitments.
The WOW COMMODITY PURCHASE PROGRAM is just one service within WOW Logistics’ integrated supply chain service offerings. We also offer solutions focused on warehouse operations, transportation brokerage, and real estate development.
Learn more about WOW Logistics by exploring our website.
Why Do Companies Choose to Outsource?
Are you faced with the decision between insourcing or outsourcing your company’s warehouse operations? Leaders in many companies, across various industries, eventually must make this choice. Above all, your company’s core business focus should be the most critical deciding factor.
Insourcing warehousing operations requires substantial upfront capital costs and the allocation of essential resources, including people, technology, and time. This distribution of resources will deter focus from your company’s core competencies and continued innovation, impacting its ability to foster sustained growth.
The choice to insource your warehouse operations will inevitably result in a full-blown logistics operation within your product- or service- based company. As the operation grows over time, it will require additional valuable resources to maintain efficiency. Ultimately, most company leaders elect to outsource their supply chain operations to cut costs and refocus on their core business.
Considering this, take a moment to ask yourself: is logistics the core focus of my company?
If the answer is no, then outsourcing your warehouse operations to a dedicated supply chain solutions provider is your most practicable option.
Benefits to Outsourcing Your Supply Chain Operations
There are many advantages to hiring a third-party logistics provider. Supply chain solution companies are constantly adapting to new customer requirements, pricing pressure, and the need to innovate. The best providers continuously evolve their people, processes, technological systems, and material handling equipment to better serve their customers.
After hiring a supply chain solutions provider, your company would realize considerable benefits—the most significant of which are listed below:
- Staff with industry expertise leading to better solutions, more efficient operations, and higher levels of customer service
- Access to an advanced warehouse management system for increased inventory accuracy
- Largely reduced upfront capital costs and operating expenses
- The establishment of Key Performance Indicators (KPIs) for supply chain performance evaluations
The most significant benefit to outsourcing, however, links back to your core business focus—hiring professionals to manage your supply chain operations allows your company to devote its resources to core competencies that drive growth and profitability, rather than warehousing and distribution.
WOW Logistics® Supply Chain Solutions
WOW Logistics has more than forty years of experience designing, building, and managing warehouses. We’ve grown to expand our service offerings beyond 3PL warehousing—our integrated supply chain solutions exist within three core business areas: Operations, Real Estate Development, and Commodity Purchasing. Food-grade storage expertise, top-tier technology, and our commitment to customer satisfaction have established us as an industry leader within supply chain management. The image below provides a simple overview of our service offerings. How can we help your business?
Explore our website to learn more about our services or contact us regarding your supply chain needs.