Internal Warehousing vs. Outsourcing Warehousing: What Works for You?

Posted on June 23, 2021

outsource warehouseThe global warehousing market is anticipated to grow to an incredible $60.95billion by the end of this calendar year. If that doesn’t give you an indication of how important warehouses are to the global economy, we don’t know what will! But there’s one key question when it comes to warehousing that impacts all businesses. Should you go with internal warehousing, or should you outsource?

Internal warehousing vs. outsourcing warehousing; the clash of the titans! We’re going to outline what these two options are, as well as things to consider when making your decision.

What is Internal Warehousing and Outsourced Warehousing?

Internal warehousing is a process through which a business organizes its warehouse needs in-house. This usually involves purchasing a warehouse space outright. Or, it involves committing to renting one to manage over an extended period.

Outsourced warehousing, as you’ve probably guessed, is the opposite of this approach. Outsourced warehousing is where a business outsources its warehousing needs to a specialist company. This involves paying the outsourced company a regular fee for their warehouse needs. Think of this as akin to other outsourced business solutions such as software.

Warehousing companies will usually have additional services alongside providing the warehouse itself. These can include fleet offerings, outsourced transportation, or even import/export opportunities. But the services you’ll get when outsourcing will always depend on which company you go with. If you choose to go in-house, you’ll be handling everything yourself.

Now that you know the main difference between these two options, let’s delve deeper into a comparison of certain core factors.

Internal Warehousing vs. Outsourcing Warehousing: Total Cost

The total cost of a solution should never be the only factor in making your decision, but every business manager knows its importance. In truth, the cost is by no means a benefit of warehousing insourcing. In fact, outsourcing will typically work out better on your wallet than going your own way. This is because of the many factors and support structures involved in warehousing.

If you’re going in-house, you’ll need to hire your own warehouse employees to manage your warehouse at all times. This can include security staff or installation. It will also likely include a large number of employees if you’re planning to operate for several hours a day. Not only that, but you’ll need to pay to organize any transportation from your warehouse. This may involve purchasing your own fleet or paying for additional logistics assistance.

All of these factors can add up. With outsourcing, as long as you go with a reliable provider, many of these services come included in the price. You can even add on things like fulfillment services. There’s also the case of price flexibility. With outsourcing, you can only choose to pay for the services you need. If you go in-house, you’re gonna be paying for everything, whether you like it or not.

Internal Warehousing vs. Outsourcing Warehousing: Strain on Time and Resources

As an additional point to the total cost, the time and resources your business puts into your warehouse must be considered. If you’re managing warehouse operations yourself, you’ll need to dedicate time and resources to this aspect of your business every day. That involves either more staff or more time spent by your current staff members.

It’s also added stress on you, the business owner. It’s one more part of your company that you have to oversee at all times. This management is a doubly challenging one today thanks to the ongoing pandemic.

With an outsource warehouse, you can leave this managerial aspect in the hands of the outsourced company. They’ll be able to oversee your warehouse, which allows you more time to dedicate to other business matters. That includes aspects like inventory management and resource allocation, as well as additional logistics. These are all business operations that cost both time and money to manage appropriately.

Internal Warehousing vs. Outsourcing Warehousing: An Expert Touch Under One Roof

There’s no denying that warehousing isn’t an easy thing to learn how to do. As mentioned above, aspects like employees and inventory management can make the whole process quite complicated. This is particularly true when you start factoring in transportation logistics and deliveries. If you go in-house, these are all things you’ll need to train in or pay someone top dollar to fulfill.

With an outsourced warehouse, you’re paying for an expert touch from day one. You’ll be able to obtain an early quotation, where you can be flexible in deciding which services are best for your company. You can then rest assured that your warehousing is in good hands at all times.

Crucially, all of this can be handled under one roof. You don’t need to go to five different companies to guarantee your warehouse is operating properly. All it takes is one reliable business to keep everything under control.

Should I Get an In-House Warehouse or Outsource?

As with every business decision, the answer to this question is down to you. But as you can see by the above, there are numerous notable benefits to outsourcing when compared with an in-house solution. For the vast majority of businesses, outsourcing is a better choice.

You can dedicate less of your budget and resources to an expertly managed operation. You can then also dedicate more of your own time to other business matters. You can even get additional assistance with things like transportation and logistics. This would normally involve enquiring at a huge number of other companies simply to receive quotations.

If you’re in need of a warehouse, it’s likely that outsourcing is the way forward for your company.

Where Can I Find Out More About Warehousing?

With that, the battle between internal warehousing vs. outsourcing warehousing should have finally been put to bed. Warehousing can be complicated though, so you likely have more questions.

To find out more about anything involving warehousing, take a look through previous posts on our website. Or if you’re looking for a dedicated warehousing solution, make sure to contact our team directly today.