Tips to Find the Right Warehouse

Today, the retail sector is witnessing a shift from the traditional supply chain processes and efficient warehousing management has become synonymous with retail success.

As the e-commerce consumer trends have picked the market by storm,

  • Consumers have started opting for same-day and next-day delivery features
  • B2B consumers abandon sellers who offer a delayed order fulfillment rate
  • Consumers expect businesses to offer free or low-cost shipping facilities

43% of supply chain executives say that inefficient warehousing increases the shipping cost.

Having considered that, you need to find the right warehouse for your business.

It must increase supply chain efficiency, grow your turnover, and reduce shrinkage. This is only a quick glimpse of what you can expect from an efficient warehousing setup.

But, there is a long list of factors that you must consider before finalizing a warehouse.

10 Tips to Choose the Right Warehouse for Your Business:

 1. Define the Right Size and Scalability

Inevitably the first consideration factor is the size of your warehouse. There is an array of questions that help you define the size of your warehouse. These include:

  • What would be a sufficient area for my inventory and warehousing operations?
  • Does the warehouse offer decent space for upscaling and downscaling the inventory?
  • Do you have an excess spare area that is adding to your total cost?
  • Is the warehouse capable of supporting your future scalability goals?
  • Does the size of the warehouse impede the efficiency of your supply chain operations?

2.  Analyze the Location and Ease of Operations

The warehouse location has a significant impetus on your operations and shipping cost.

You must ponder several factors to search for the right location for your warehouse. These include:

  • The distance of your warehouse from your distribution locations.
  • The distance and cost of transportation from the warehouse to the delivery destination
  • The frequency at which the stocks are received or delivered
  • The aptness of an area for warehousing and supply chain operations
  • If the warehouse is serving as the base for final delivery, it must be close to delivery locations

3.  Check the Logistical Integrations and Support

While you plan the right location, the immediate next step is to check the logistical setup.

Unless it is your first warehouse setup, you would know the importance of logistics integration. It defines the right location for your warehouse.

Some crucial considerations include:

  • Your warehouse must be in close vicinity with important ports and land routes
  • You must be able to set up your fleet base within the proximity of your warehouse
  • If you transport cargo through railways, ensure easy railway station access.
  • You should have easy accessibility to rental logistics and land transport setups
  • Also, consider your warehouse location for its proximity with air connectivity
  • Evaluate the ease and cost of transportation access for your warehouse location

4.  Research the Workforce Availability, Skills, and Cost

As you move ahead into finding the right location, you need to check the labor availability.

The demographics you choose must avail you surplus labor for warehouse operations. Moreover, this workforce must have the skills you need for your business. Or the local labor you hire must be qualified enough to learn the new ropes with ease.

A factor that you might have spotted from a mile away is the cost of hiring a workforce.

A labor surplus economy might help you hire laborers for a competitive salary pay-out. Meanwhile, a stranded warehouse setup requires you to pay extra for labor transportation.

You can do some online research to get a closer look at the demographic attributes:

  • Research “{city} demographics” on Google to learn the characteristics and income level of the population in the city.
  • Browse through the city or state government sites for crucial demographics data.

5. Scrutinize the Several Cost Factors

Today, retail businesses find it daunting to offer free or low-cost shipping services. A way to curtail the shipping cost significantly is by reducing the warehousing cost.

Oodles of factors add to the cost of your warehouse. Some of the most crucial ones include:

  • Cost of the warehouse property based on its size, layout, and location
  • The operational efficiency of the warehouse and its significance on the cost
  • The cost of distribution from the warehouse or using it as a delivery base
  • The cost of forwarding or shipping to other locations from the warehouse
  • The cost of managing the warehouse, staff management, and resource management

You need detailed financial planning to minimize the cost of the warehouse for your business. The idea is to increase your operational efficiency and grow your business turnover.

6. Assess the Warehouse Layout 

Your warehouse layout contributes substantially towards your operational efficiency. And it increases or reduces your daily overhead cost.

Your warehouse layout must support the type of inventory or products you sell.

For instance, a pharmaceuticals business might need a specific medicine storage facility.

Ensure that your warehouse layout aligns with your operational procedures. And it must also bring enough room for innovation.

Your supply chain staff must have easy access to all the facilities and resources. And your warehouse must help you reduce the daily operational cost.

For example, heavy equipment handling requires more warehouse space and a stable setup.

A tightly confined space can decrease your operational efficiency. And this will increase the total operations cost.

Some businesses need basement setup, multi-storied setup, specific chambers, etc.

A warehouse may offer packaging, dispatching, reverse logistics, stock labeling operations, etc.

7. Evaluate your Warehouse’s Safety and Goods’ Security

A crucial part of inventory management includes safeguarding it against any mishap. You must protect it against any damage, theft, and inappropriate handling.

You must audit the security before you entrust a warehouse provider for your goods. And the warehouse provide must assure you of no-risk warehouse storage and operations.

Also, the warehouse setup must offer a quick and unblemished setup for risk handling.

For instance,

If your goods are susceptible to fire, you need a reliable fire extinguishing setup. Moreover, there must be an emergency fire station setup in close vicinity.

Ensure to conduct a documented discussion with your provider about the warehouse security.

8. Discuss the Insurance Policy and other Contract Documents

An irrefutable way of validating your warehouse security is by insuring your goods. It is probable that the warehouse provider has the insurance policy already in place. But, you must discuss the details like policy renewal date, insurance cover, cost, etc.

A warehouse provider might also discuss other areas and government policies. You must make time for an attentive discussion on all these policies.

The warehouse provider might have an affiliation with recognized warehouse associations.

This adds a sense of credibility and commitment to the warehouse services.

Some warehouse service providers also follow and deliver stringent warehousing standards.

9. Consider the Technological Advancement that You may Require

The warehouse you choose has a significant impetus on the efficiency of the supply chain.

You might need to integrate a reliable warehouse management system. And this system must be compatible with your e-commerce or retail backend technology.

Some businesses might also integrate IoT and automated warehouse management tools.

Your warehouse might include the use of drones and electronic data exchange setups.

Before you buy a warehouse, check its technological compatibility with your business.

10. Scrutinize the Area-specific Factors

A crucial factor that we often turn blind eyes upon is the area-specific conditions.

The local government might have limited-time operating norms in specific areas. Or some high-traffic areas might increase your logistics management and transportation time.

Moreover, you must check the weather conditions typical to an area.

For example, areas with extreme weather conditions might increase product damage risk.

Moreover, these areas are likely to offer you low productivity.

Avoid setting up a warehouse in areas prone to floods, earthquakes, hurricanes, etc.

If other factors are favorable and the only resort, you might build for such an area. But, ensure meeting the specific building requirements to eliminate the mishaps

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