Protactix

Sounds like double talk. But with the economy getting (staying) more unpredictable, now is the time to focus on what your business can lose so that it can gain (or at least survive).

I believe Sales and Customer Service must stay inside.  Warehousing and Fulfillment should be outsourced by utilizing an Outsourced Warehousing & Distribution Solution.

The approach: Outsource functions that your customer does not “see”.

We had a client that wanted to expand into the US market.  They ran the numbers and determined that with their budget limitations, if they were to duplicate their offshore business in the US, including Order Fulfillment Services, they could not afford the quality level of marketing and customer service they knew their product required.

The cost advantages of outsourcing warehousing and fulfillment in this client’s case were: One, reduced upfront costs, since personnel did not have to be relocated from the home country, no fixed office, warehouse or staffing commitment had to be made in advance. Two: Shorter learning curve for staff. Three, and perhaps most importantly, flexibility.  Because outsourcing fees were set as a percentage of sales, costs followed success, rather than being fixed and a drag on free cash, especially in the early months.

By outsourcing their US warehousing and fulfillment, but keeping their marketing and customer service in house, they reached their five year plan goals in a little over three years.

Although this client’s opportunity for outsourcing was a result of “opening” in a new country, similar, although perhaps not as dramatic results, can be achieved by most any business.

Their process of analysis can apply to any function that any company and particularly any small business is considering outsourcing.

The process:

One.   Looking at your business from the customer’s side, what does your business do for them? Use only one verb. Example: “install”, “supply” or “manufacture” as in “install window blinds”, “supply paper goods” or “manufacture precision instruments” .

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