I found this discovery to be very eye-opening and thought I would share what I have learned. Apparently, by outsourcing shipping and warehousing requirements to third party companies there are tremendous benefits to be had by both the suppliers and the consumers alike.

Benefits to the Supplier

1) Reduction in Expenditure: the total costs for retailers to manage their own warehousing and shipping needs can quickly skyrocket. They would have to take into consideration the cost to maintain one or more warehouses, staffing requirements and inventory management; all of which can be very expensive. By contracting a supply chain management company to handle these requirements (such as to pick and pack products), the company can save a considerable amount of money.

2) Greater Efficiency and Effectiveness: another benefit is that when these services are outsourced to a company that specializes in these areas (storing and shipping inventory etc.), there is greater efficiency in the entire process. Furthermore, this allows the suppliers to focus exclusively on producing and/or selling their products.

Benefits to Consumers

Just as there are benefits to the suppliers there are also some direct benefits to the consumers as well.

1) Lower Charges: sometimes consumers will benefit from a suppliers decision to outsource to a supply chain management company. These companies usually have warehouses at a number of different locations therefore if the product is shipped from an outlet nearer to the consumer, their shipping and handling charges will be significantly reduced.

2) Quicker Service: another potential advantage of closer warehouses to the customer is that their purchases will likely reach them quicker than if they were shipped from a supplier who is much farther away.

If you haven’t read that book yet,
by all means pick it up it’s a fantastic read.  I will do my
best to convey the idea.  One of the most disorganized emergency
rooms in the country received a cool gift in the form of a new
computer system. It gave doctors and nurses access to insane amounts
of data about their patients at one of several terminals throughout a
hospital.  The result was immediate.  Patients received
better care.

Deviously, to launch the system, the hospital
administrator simply set up the computer and labeled it as something
that the doctors were not to use.  This reverse psychology was
of course very effective and within a short time there was a line of
people waiting to use the computer.  It had access to records,
tests, data. All this information being constantly updated for each
patient in the emergency room.

Knowledge is power, trite but
true.  When important knowledge is cataloged, stored, indexed,
filed and available to the people who need it they have the power to
help others.  There are plenty of other examples from the book
that bear out this same point.  But something about the life or
death nature of an emergency room makes the point more vividly. 
I think that the free, open, and honest trade of important ideas is
the most fundamental thing we all take for granted.  Before we
had the computer, people walked out to their doorsteps stooped down
and picked up a paper. They believed what it said because they had
no other choice.  Now we all have access to such masses of
information that we take it for granted.