Online Retailers should not run their own warehouse unless they wish to invest millions to make it their competitive advantage such as Amazon.
There was a time when I was deep into running my own warehouse operation. We had row after row of narrow isle high ceiling pallet racking. We had conveyor systems, automated scanners and scales. We had packing stations, air bag machines and insta-pack machines. We built our own barcode software and inventory receiving, picking and packing system focused on efficiency and accuracy. It was a well oiled machine and UPS said we were the largest UPS ground shipper in Lincoln Nebraska at the time shipping a full 53 foot truckload or more each day.
The lesson I learned was that I could spend tons of money to build an efficient and well oiled warehouse opperation to run efficiently and accurately but the return on this investment will never pay back. It’s a bad investment of money and more importantly your time for eCommerce sellers to build something that has already been built, is offered as a service at a cost that’s more competitive than you can build yourself. This wheel has already been built and there are many third party services already available to take this burden off your hands and manage this task more professionally and with greater speed and accuracy than you can ever build on your own.
The other problem with spending your time on warehouse management is that packing boxes and shipping orders is a “Money Moving” task as I explain in my eCommerce Money for Nothing LIFESTYLE book. The more time you spend focused on the money moving tasks, the less time you have to spend on the money making tasks. While you spend your time re-building a process and operation that is available as a third party service you fall farther and farther behind when it comes to the making money tasks.
I came to this realization in 2011 when I found myself spending too much of my time concerned with how the box was packed, how quickly the orders could ship out and all the details of warehousing such as pallet locations, inventory cycle counts, recycling used boxes, label printers, utilities, insurance, fire extinguishers, conveyors systems, security systems and many more. These are all details that distract you from focusing your attention on the money making tasks of your business.
When I found a third party service to take all these worries away and deliver my packages as quickly and efficiently as I could do myself for a cost that was equal or less than I could do myself I knew this was the right decision for my company. I didn’t understand the full impact of the time drain from running my own warehouse operation until I lifted this burden off my shoulders. The amount of time that was now available to focus my energy on the money making tasks of my business or to just go out and enjoy life while they pack my boxes and ship my orders every day was one of the smartest decisions I made when I decided to build my eCommerce Money for Nothing business model.
If you would like to hear more about this decision and the real impact on my bottom line, you can read about it in volume one of eCommerce Money for Nothing here.
It’s time for you to sell smarter!