As e-commerce continues to expand, consumer expectations rise at an unprecedented pace. This compels retailers and logistics companies to adapt rapidly. The demand for fast and direct shipping creates a complex landscape for small logistics businesses to tread. Efficiently managing its intricate components —like order tracking and inventory management — can prove to be time-consuming and challenging. 

Every logistics company knows that managing inventory requires seamlessly keeping track of orders, restocking, product storage, and predicting future needs without hiccups. Running these tasks smoothly helps to put your business at the forefront for e-commerce success. Here, outsourcing logistics plays a transformative role, allowing your company to put focus on your core operations while leaving the task of inventory management to specialized experts. 

What is outsourcing?  

Outsourcing is the strategic practice of hiring external firms to handle specific tasks or functions. For logistics companies, this involves entrusting operations like customer service, order processing, fulfillment, inventory tracking, and other inventory management tasks to business process outsourcing (BPO) firms. Bottomline, this approach can help your business reduce costs, streamline processes, and improve efficiency. 

Can inventory management be outsourced?  

Any administrative tasks that can be managed in the back-office can be outsourced to a remote, secure external team. A third-party outsourcing provider can help you set up your own dedicated team with their own equipment integrated with yours. This includes the most important sections of inventory management such as:  

  • Forecasting which items will be selling in the short to medium term 
  • Ordering or manufacturing items at the right time 
  • Organizing your storage and rotation of inventory, and managing your warehouse or storage space if necessary 
  • Training and communicating with your on-ground staff to manage stock or raw materials 
  • Inventory control and accurate scheduling distribution and delivery of items 
  • POS software management, as well as analyzing your accounts 

For these tasks, you’ll need experts with proven experience in the areas of forecasting and inventory auditing. This outsourced team can communicate with your core operations team to carry out fulfillment in real-time.  Partnering with an outsourcing provider that understands your business is essential to source and recruit the right experts for these tasks, giving you a competitive edge.  

What do you stand to gain from outsourcing inventory management?  

Outsourced inventory management ensures that you avoid the most common problems of overstocking (or getting stuck with unmovable excess inventory) and running out of inventory (which will lead to losses in terms of expenses and sales opportunities). 

But those are just the tip of the iceberg. Businesses choose to outsource some or all of their inventory management. 

  1. Utilize Inventory Tracking Software: 43% of small businesses do not monitor their inventory. Don’t be one of them! Inventory management software, like ERP and EDI, streamlines data sharing, giving you a better overview of your supply chain. Outsourcing gives you access to these tools for real-time insights, helping you avoid excess inventory or stockouts. This empowers you to make accurate decisions to keep the right inventory levels based on market demands — ultimately allowing you to reallocate costs to other areas.  
  1. Accurate Inventory Control: Did you know that inventory accuracy in the U.S. is only at 63%? With advanced analytics at your fingertips, outsourcing can help you create an optimized stock order plan based on historical data of your market and its fluctuations. Outsourcing inventory auditing tasks will also help cut down on administrative time so your team can focus on more impactful tasks.  
  1. Cost Efficiency: Harnessing outsourcing solutions helps you cut down costs, especially when it comes to storage and general operational costs. You’ll also spend just the right amount on resources for your on-ground team, allowing them to execute timely deliveries.  
  1. Value Added Services: With inventory management handled externally, you can cater your services based on your consumer’s purchasing trends and their expectations. By outsourcing non-core activities such as customer service, you can put more focus on the overall customer experience and engage with your market, giving you more opportunities for sales.  

Bottom Line 

Outsourcing inventory management positions ensures optimized stock levels to meet market expectations while minimizing operational challenges. By leveraging logistics and fulfillment outsourcing, you gain valuable support at a fraction of the cost. In addition, you also streamline your real-time operations to achieve more. 

FGC+ provides cost-effective outsourcing solutions for small and medium businesses. Our end-to-end solutions take a consultative approach to understand your business better, so we can cater our solutions to deliver full-service, quality outsourced services. Learn more about us at www.fgcplus.com.