Whenever a company has problems with storage, it is not always a good idea to build storage facilities.
Indeed, sometimes it is not always necessary to do this particularly if the storage necessity is only a few times per year.
Contract warehouse facilities are available and this usually comes at very good rates.
A 3PL (third part logistics) providers will take on the responsibility of taking on the goods and making sure that they are kept in the best order.
Most companies will want to concentrate on their core activities like production and not be caught up in the melee of finding places big enough to store the goods produced.
This can take an inordinate amount of time and expense which means that the end product will no longer be competitively priced.
Therefore, when large orders are received, it is much better to use a third party to store the goods prior to dispatch so that the company can get on with the job at hand.
Another great aspect of using third parties for storage is that their housing facilities are normally state of the art.
They may well have high ceilings to take all the pallets or containers, plus good ventilation and air conditioning if necessary.
Plus they will know in advance how to take care of the goods.
This is particularly important where the goods have sell by dates or are edible products.
Within the storage facilities they will have up to the minute equipment to carry and load the goods whether it is coming into the facility or being taken out.
This can be important so that the goods do not get damaged in transit.
There would be no point having damaged stock being sent out to a retailing chain since this would preclude future orders.
These suppliers can even take care of the supply chain that the vendor wants.
Perhaps they are supplying goods to a nationwide chain store, and the logistics behind this can be quite a headache.
But these third party companies will be able to manage the goods and deliver to wherever they are supposed to be on time, in good order and without and defects.
At the end of the stock run, they can even dispose of redundant stock as per the wishes of the vendor.
In other words, they take the strain off the manufacturer or importer to leave them free to search for other business or to manufacture new lines.
With a sister company, these third party suppliers can often repackage goods to make it easier to fulfill small orders, or for the goods to go into branded boxes.
Again, this is a great service that takes the pressure away from the importer or manufacturer.
This service must be considered as a value added service to the vendor and, although it will add some increase to end price, the consumer benefits by having goods delivered on time and in good condition.
Market forces dictate that there will always be a necessity for their services.