The cost of managing inventory remains one of the biggest factors that can impact your bottom line. Whether it is the warehouse costs associated with storing product or shipping freight to brick-and-mortar outlets, it may seem that managing your logistics spend is impossible. The truth is that there are ways to control costs and identify opportunities to manage spend in a more proactive manner.
Here are three ways to reduce your logistics management spend:
- Consider your location. In certain geographical areas of the United States, you will pay a higher premium for warehousing space and transportation solutions. There are many factors that can influence your costs based on geography alone. Real estate costs can be higher in certain markets. There may be fewer transportation lanes available to move freight. If you need both east coast and west coast distribution, it may be cheaper to partner with a provider who is based in the Midwest. Depending on what your specific needs are, your brand may benefit from a geographical analysis to determine the best location for your needs.
- Improve your existing processes. Some brands may find that they may experience increased spend due to the adoption of ineffective processes. It is important to work with your logistics provider to ensure that continuous improvement and quality control efforts are put into place. For example, evaluating something like order accuracy and adopting processes such as a checkpoint system for order verification can help reduce redundancies, improve customer satisfaction and help reduce costly mistakes.
- Use forecasting. Accurate forecasting can help position a brand for success if used correctly. Forecasting can help your brand make informed decisions throughout the year, helping you better anticipate your spend. If your brand faces seasonal fluctuations or other variables, your logistics spend may increase if you are not properly prepared. By understanding the nuances associated with your products, you can work with your provider to scale correctly and better anticipate costs.
The best way to control your logistics management spend is to find a provider who serves as a partner and an extension of your business and has your needs in mind.