If you’ve just started an e-commerce business and it’s growing, one of the next steps you should take is running a warehouse to keep up with the demand of your consumers. However, selecting a warehouse management system can be quite confusing and overwhelming for many business owners.
For one, you may need to consider the location of the warehouse in order to meet customers’ last-mile delivery expectations. But the difficulties don’t just end there—you may also need to cater to your company’s other specific warehousing needs.
Fortunately, difficult doesn’t mean impossible. Read on to learn the 9 essential factors to consider when selecting a warehouse for your business’ inventory.
9 Important Considerations When Choosing a Warehouse for Your Business
1. Location
When selecting a warehouse to meet your business’ needs, location is one of the primary factors to consider. It would determine how easily and quickly you can deliver and receive packages. That’s why it should be situated in a place where it is extremely convenient for your customers, clients, and employees to reach you.
Choosing a location for your warehouse is also quite difficult. To make the job easier and less complicated, ask yourself first if your target audience lives nearby. Is it a specific area where most of your product or service deliveries are being made? If not, then better look for another warehouse location.
2. Access
An integral part of choosing the right warehouse location is considering the kind of access you might have.
It’s vital that you select a warehouse located near major highways to ensure faster and easy transportation of goods. And if you’re planning to cater to international customers, you should choose a warehouse location that must be at least close to seaports and airports. Doing so would help you reduce expensive fuel spendings and ultimately save money in the long run.
3. Storage Space
To ensure all logistic requirements are met, selecting a warehouse with sufficient storage space is essential.
But in order to know how much storage capacity you really need, you have to take note of current inventory and stock levels, the average speed of delivery and order fulfillment, and your long-term business goals. Be realistic and ask yourself if you would need the extra space if such plans come to fruition. It’s better to stick with a warehouse that has an extra wiggle room because it allows for more growth later on.
It’s also important to know that since there are different types of warehouse storage, you also have to carefully assess your specific business needs. This would help you maximize the available warehouse space and speed up logistics processes accordingly.
4. Cost
This is also one of the most important factors to consider when choosing a warehouse for your business.
Before making the final decision, you should be aware of additional, and often hidden costs when it comes to leasing a particular warehouse. Do you really need to splurge on a higher-valued property closer to your target market? Or would you be able to save when you choose a lower-valued warehouse but pay instead on transportation costs?
You should also compare different terms of the lease and carefully study it. For instance, tenants usually pay for costly warehouse repairs in net leases. While in triple net leases, you are responsible not only for the maintenance of the property but also the real estate taxes and insurance.
Tip: Look for a warehouse property under the gross lease. This means that the insurance, maintenance, and property taxes of the warehouse are all the responsibilities of the landlord.
5. Value-added Services
Aside from the costs of a specific warehouse, you should also consider the additional services you might get for a specific contract. Ask the landlord or warehouse provider if they offer basic packages that include storage and shipping services together with inspection and dispatching.
It’s even better if a particular warehouse offers packaging, labeling, daily and monthly reporting, and reverse logistics.
Overall, by choosing a warehouse that provides other additional logistics services, you’re getting value for your hard-earned money. You can enjoy increased visibility, easier coordination, and more flexibility because you’re only working with one warehousing service provider.
6. Technology
An up-to-date warehouse management system is just as important as any bonus packages.
You need to make sure that the warehouse you choose is equipped with automated technology. This would ultimately minimize human error and speed up workflow processes.
However, while it’s good to have advanced robotics in your own warehouse, simply investing in conveyor belts can greatly improve your logistics turn-around time.
Tip: If you have used an existing computer software before and it worked perfectly fine, ask the landlord if their warehouse system is compatible with it.
7. Employee Availability
The most advanced warehouses would still need a human operator. As such, the surrounding job market is another factor you should consider when choosing a warehouse.
Look for a warehouse situated in an area where you can easily source employees for your business. You should also consider the educational facilities around the area where you can train staff. Once you do, it’s best to figure out as early as possible if you’ll be able to manage the warehouse 24/7. Or if there are any competitors nearby that would hinder your operations.
Having considered all of these factors, you can expect efficiently managed order fulfillment as well as the timely delivery of your products.
8. Reputation
When selecting a warehouse, most business owners just consider the physical, obvious aspects such as the location, storage area, and cost. Rarely do they take into consideration the reputation a warehouse provider has. This small fact is extremely important, though, in making the right decision.
You should choose a warehouse provider that has numerous experiences working with other businesses. Do also consider the type of companies they have already worked with.
For instance, food distributors may find it reassuring once they found out a specific warehouse provider has partnered with a fellow food distributor before. This just means that the logistics company can perfectly meet food-grade requirements. Apparel and electronics distributors, on the other hand, have a completely different set of warehouse specifications.
Tip: You may also check if the warehouse provider is a member of any internationally-acclaimed organizations such as the International Warehouse Logistics Association (IWLA).
9. Risk
By now, you have probably shortlisted a couple of warehouses. But before making the final decision, you should ask each one about their incident rates, safety precautions, and damage plans. Do also take into consideration their insurance coverage policies.
As always, it’s best to be clear upfront about what kind of responsibilities are exactly covered in the contract. Doing so would ultimately keep the whole bulk of your products safe and secure.
ALSO READ: 7 Reasons to Use a Warehouse Management System
Choosing the right warehouse can be a challenge. You have to consider a lot of things such as your specific warehousing needs and proximity to your target market. Fortunately, with these essential factors in mind, you can easily select the right warehouse for your business’ inventory.
Still need help? Worklink Services Inc., a reliable logistics company in the Philippines, has a range of warehousing solutions. For over 20 years in the logistics industry, we have been providing warehousing services for our clients in the Philippines. Let us help you grow your business by contacting us today!
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