Faced with rising material costs and downward price pressure in the market, businesses naturally look to streamline operations to the greatest extent possible, and to extract every last bit of value from their existing resources. For wineries, one manifestation of this effort is the tendency to keep as many aspects of the business in-house as they can, avoiding fees to third-party providers. This is a laudable and occasionally successful strategy, but does it work for fulfillment? There are many complexities and hidden costs in fulfillment, some of which may be unknown to wineries at the time they consider whether to outsource their fulfillment operation. Cost burdens such as direct labor, packing materials, inventory management, and various operating expenses are all associated with keeping work in house. Time-consuming administrative, scheduling, logistics, and other support activities can drain precious resources as well, though may add little or no value. This short white paper considers some of these costs, and aims to help provide wineries with the critical information they need to make this important decision.

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