For most retailers, Christmas is an extremely challenging time of the year. Whatever the time of year, retail bosses will have the festive period in mind; making the most of the seasonal opportunities can require considerable planning. Without good Christmas sales, many retailers simply would not be able to survive, so planning ahead is vital.
The Seasonal Distribution Challenge
The problem for most retailers is stepping up their operation without incurring massive costs that wipe out any profits. Distribution of products at this time of the year often requires extra warehousing and extra staff to pick, pack and despatch goods. Obtaining these extra resources at Christmas can prove expensive and put up the distribution cost of each item, which cuts into the profit made on each item. Other per item costs such as postage remains stable and does not go up according to the volume of products handled.
Fortunately, there is a simple answer. Companies can put fulfillment of customer orders into the hands of a third party fulfillment or distribution center. The cost of using third party fulfillment services is usually far lower than leasing additional warehouse space and hiring extra staff. In fact, the cost savings are so great that an increasing number of firms are using a third party fulfillment service for their distribution throughout the year.
Handing over all product handling to a third party frees firm up to grow their business. There is no need to worry about running a warehouse and staffing it, so everyone in the company can focus on other important tasks.
