Consolidated Shipping & Warehousing in Nigeria: What is it, and how does it work?

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Consolidated shipping is the process of combining multiple shipments into one to cut costs. Warehousing involves storing goods in a centralized location, rather than individual stores directly receiving and sending out their stock. A company that offers consolidated shipping and warehousing services is known as a third-party logistics provider (or 3PL provider). These companies work with other businesses to help them store and ship their products more efficiently. A good 3PL partner has the same goals as you: cost-effective operations and happy customers. Let’s take a look at what exactly this means for your business.

What is Consolidated Shipping?

Consolidated shipping is the process of combining multiple shipments into one. This means you send out more shipments at once and collect the payment once, rather than sending out a smaller amount of shipments every week or month, and collecting payment for each separately. When you consolidate shipments, you can take advantage of volume discounts, which are discounts offered on larger quantities of a product. You’ll likely want to consolidate shipments if you’re selling a product that does not have to be sent out on a regular basis, and for which payment is not due each time you ship it out. For example, you might be selling an appliance that doesn’t need to be sent out every few days. You’ll also likely want to consolidate shipments if you often only have a few orders at a time.

Consolidated Shipping in Nigeria – How it works

Before we go over the advantages and disadvantages of consolidated shipping, let’s first talk about how it works; You’ll have to hire a 3PL company to manage your shipping logistics. Once you’ve done that, they’ll set up a centralized warehouse where they’ll store your products. When an order comes in, the 3PL company will pick the product from the warehouse and ship it to the customer. When another order comes in, they’ll pick the product from the warehouse and ship it to the customer. Once the warehouse is clear of products, the 3PL company will send it to you, and you’ll be responsible for restocking the warehouse.

Advantages of Consolidated Shipping

Increased profit – When you decide to consolidate your shipments, you will be able to ship more products in less time. This will increase your overall profit because you will have more products shipped in less time. This will allow you to make more money per day because you will not have to wait for a certain amount of days to ship each product one at a time.

Easier to manage customers – Customers will appreciate getting their product faster, which will make them happier with your business. Customers want to get what they paid for, but they also want the product to get to them as fast as possible. When you ship products one at a time, it can take a long time for customers to get their products. When you consolidate your shipments, you will have more products shipped at once, which will allow customers to get their product faster.

Disadvantages of Consolidated Shipping

Warehouse space – If a 3PL provider offers free warehousing, you’ll have to store your product in their warehouse. While this may not be a bad thing for a short period of time, if you have to store your product there for longer than a few months, you may need to pay the 3PL provider extra to keep it there. It’s good to factor this in when you decide to consolidate your shipments.

Extra costs – When you consolidate shipments, you may have to pay storage fees, extra shipping fees, and other miscellaneous fees that weren’t part of your original plan. While consolidating shipments might seem like an easy solution, it may end up costing you more money in the long run.

Warehousing in Nigeria – How it works

As we’ve discussed above, warehousing involves storing goods in a centralized location. A 3PL provider will likely offer both warehousing and consolidated shipping. A good 3PL partner will have their own warehouse, where they’ll store your products. When someone places an order, the 3PL provider will pick the product from the warehouse and ship it to the customer. When another order comes in, they’ll pick the product from the warehouse and ship it to the customer. Once the warehouse is clear of products, the 3PL provider will send them to you.

Warehousing Advantages

Bigger shipment size – When you warehouse your products, your shipments are likely to be larger, because you’re consolidating a lot of orders at once into one shipment. This can benefit you if you’re trying to take advantage of volume discounts, as larger shipments will qualify for them. Greater profit – Because your shipments are likely to be larger, you can charge more for your products. You can use this extra profit to offset the fees associated with warehousing.

Warehousing Disadvantages

Longer waiting times – If you’re relying on a 3PL provider for your warehousing, you may have to wait a few days for your products to be picked up from the warehouse and sent to you.

Higher shipping rates – If you pay a 3PL provider to do your warehousing, you may be charged extra for shipping.

Key Takeaway

A 3PL provider can help you save time, money, and energy by offering warehousing and consolidated shipping services. Before you sign a contract with a 3PL provider, be sure to discuss all of their pricing details. You may want to consider hiring a 3PL provider if you have high-volume or irregularly-timed orders.