I was just having a conversation with a wholesaler of novelty goods and he was talking about selling up because his overheads were too high, he was just covering the costs but no profit. I asked him why after over 40 years in business this was now not so profitable. He mentioned that most of his type of business was on line and he could no longer compete.
I then thought if he had outsourced a lot of the business to say a fulfilment company to hold his stock and deliver when required it would have saved him a lot of money. He could outsource his phone calls and have them answered by a telephone answering service that can take the information and orders, a cost saving as well as not having to employ a member of staff.
Just one cost saving on his warehouse worked out to be about £30k. That would literally be added to his bottom line profit. Employing a member of staff would have cost him another £25k with all the associated costs. This is just two examples of where they could have saved costs but there are many more.
What could you do with the extra income. Of course, your cash flow would look great and this could help you expand your business with more products and resources.
Business has changed over the last 10 years where you don’t need to have warehouses or even staff but still sell products and services with most of the business functions outsourced.
Just an example of this is one of our clients who sell garden furniture. Their stock is held with a fulfilment company, Orders are taken by their team or by us in telephone-answering.biz and stock is all sent from the port directly to the fulfilment house who in turn check the stock and ship when required. The invoices and credit card payments are all paperless and the follow up for delivery is of course with the couriers. Even most of the marketing is outsourced This leaves the directors to concentrate on sales as well as looking for more products.