What is Contract Warehousing?

Whether your business is a bootstrapped startup or an established firm seeing rapid expansion, you may find yourself needing to invest in cost-effective warehousing services. This is where contract warehousing really shines.


WarehouseContract warehouses are simply establishments that perform all the normal warehouse functions of receiving, inventory, storage, and shipping – all under the operation of a third party company. These contractors are dedicated warehousers with their own facilities, saving business owners the expense of purchasing and maintaining additional property and/or construction.


Why use a contract warehouse?

Some business owners might question the reasoning of contracting out warehouse services, rather than establishing their own facilities over which they can exert full authority. While dedicated warehouses are not without their merits, there are a number of excellent reasons to consider outsourcing this operation:


• Easy scalability

If your warehousing needs are somewhat volatile, and are expected to alternately increase and decrease over long periods of time, contracting service lets you quickly adjust inventory space and shipping capacity – without ever running the risks of paying for facilities you aren’t using at the moment, or not having the means to expand in time to meet demand.


• Diversified locations

If your business has recently expanded to new territory, far from your current warehouses, it may be economical to establish a closer base of operations. Contract warehouses are pre-established and provide an excellent way to explore the possibility of a long-term facility at a fraction of the initial cost.


• Limited Resources

Not all businesses can – or want to – afford the costs of operating their own warehouse facilities. Not only is the financial load of establishing an initial setup substantial, but maintaining one or multiple warehouses demands considerable attention of management. Outsourcing these important, but mundane, aspects allows business owners to direct their focus towards creative and expansionary ideals while retaining considerable control over the details of their operational contract.


For more information on contract warehousing in the Atlanta or Savannah areas, contact the transportation experts at Bonded Service today.