What Is a Third Party Collection?

The third-party warehouse, or contract warehouse, refers to a warehouse method in which an enterprise subcontracts logistics activities such as warehouses to external companies, and external companies and enterprises provide comprehensive logistics services.

Third party warehouse

Right!

Third-party warehouses are contract warehouses.

Third-party repositories are different

Effective use of resources. The use of third-party warehouses is more effective than the self-built warehouses in dealing with seasonal and low-season storage problems that are common to products. It can effectively use equipment and space. At the same time, third-party warehouse management is professional and management experts Innovative distribution concepts and more ways to reduce costs make logistics systems more efficient.

Expand the market. Third-party warehouse enterprises have strategically located equipment and services, and the owner of the warehouse management and a series of services in different locations are the same. Many companies have reduced the number of their own warehouses to a limited number and subcontracted the logistics of the regions to contract warehouse companies. Through this network of combining own warehouses and contract warehouses, while maintaining direct control of centralized warehouse facilities, enterprises use contract warehouses to reduce direct labor costs and expand the geographic location of the market.

Reduce transportation costs. The third-party warehouse enterprise handles a large number of goods of different shippers at the same time. After LCL operation, it can greatly reduce the transportation cost through large-scale transportation.

Testing of new markets. Consignee companies can use short-term third-party warehouses to investigate market demand for products when they promote existing products or launch new products. When an enterprise tries to enter a new market area, it takes a long time to set up a distribution facility, and through a third-party warehouse network, the enterprise can achieve its purpose.

Although third-party warehouses have certain advantages, there are also some disadvantages. Among them, the loss of direct control over logistics activities is the most worrying issue. The enterprise contract warehouse has less control over the operation process and employment of employees. This factor has become the biggest obstacle for enterprises with higher commodity value to use the contract warehouse.