For numerous reasons – no space of your own to storage goods, outsourcing efficient and top of the line storage service, unwillingness to deal with storage maintenance and related equipment and services on your own – whatever the reason may be, there are types of goods and types of companies who use outsourced service to storage their goods and materials.

Whilst this saves you more space, time and almost certainly inventory dealings like handling, shipping etc, there are still a couple of things you should be aware of when having inventory held by third parties.

What you must ask is a strict reporting on the movement of goods – incoming, outgoing and also waste. These you can reconcile with supplier invoices and sales. The reason behind this is fairly simple – the fees also comprise of handling charges. It may very well be that the numbers on paper are bigger than the actual reality is. Of course you also want to have an overview of the movements in general even if you have no reason to believe your partner is cheating you.

The same applies as with your own inventory at your premises – you need to have regular stock counts. Now it may be that you want and you are able to perform it yourself on third party premises, but regardless of the fact, you want to make sure the counts are performed having sensible rules (i.e. no double reading, all differences are noted, double check on differences noted etc). It is essentially your assets they are dealing with there.

If you have regular reporting and stock counts sorted and validated, you can rest assured that your inventory is managed almost as good as you would manage it.