The Current State of Supply Chain

Warehouse space was at a premium across the United States even before COVID-19, but the pandemic’s impact on consumer habits and supply chain delays have led to significantly reduced overall availability. ECommerce brands increased stock to avoid missed opportunities, and warehouse space is more scarce than ever before. The move to just-in-case inventory strategies provided short-term protection for individual companies, but we’re now seeing a much broader impact due to those changes. 

All of the extra products must go somewhere, especially as we wait for consumer sales to catch up to this excess. The bullwhip effect has localized, as store and warehouse shelves move from empty to overstocked. Such excess makes it difficult for your business and all fulfillment partners to run their operations. That stretches beyond 3PLs to carriers and even inbound hubs and ports, which have begun to implement fees on containers that sit for more than a short period of time.

As the needs of your business change, Red Stag Fulfillment is determined to evolve our warehouse strategy to continue providing you with operational excellence and superior service. In 2022, Red Stag Fulfillment will update our pricing structure to include long-term storage rates. This page will explain the reasoning behind those rates and how they will work broadly. Your Account Representative will reach out to your team directly with precise dates and pricing concerning your particular SKUs.

Why Red Stag is Adopting Long-term Storage

To avoid stockouts from supply chain backlogs, companies are keeping extra inventory for long periods, putting significant pressure on 3PLs like Red Stag Fulfillment. Our operations focus is on moving your products quickly, not storing massive amounts of inventory for significant periods of time. As customer demands change and there is added pressure on 3PLs to serve as traditional warehouses, fee structures must change to properly protect each business.

Fulfillment providers are only successful when they're filling orders for eCommerce businesses. That activity enables them to maintain the high service levels your customers demand, in particular 100% order accuracy and on-time delivery. These rate changes will enable us to continue providing you the operational excellence you've come to expect and help your company continue to grow and scale. 

How These Rates Will Function

Red Stag plans a two-stage rate structure for long-term storage pricing.

1. Product that has not rotated in more than 180 days will be assessed a small long-term storage fee on top of normal storage costs.
2. At 365 days, stagnant products will face a higher long-term storage fee that will continue until sales drop the oldest unit below 365 days.

Don't worry — your account manager will work with your company closely to ensure that you have ample time to prepare and help push slow-moving inventory before any storage increases could occur. 

These rate increases are easily avoided by keeping up-to-date and realistic inventories and by rotating out slow-moving products so that your operations have more consistent orders across all SKUs. However, if your business needs to store more goods over long periods of time, you will have the option to control inventory as you see fit.

In short, this model takes what would be the fixed cost of storage for an eCommerce business and makes it variable to incentivize business owners to push slow-moving inventory and keep products moving swiftly.