We know that warehousing is a significant part of any manufacturing business. It helps accumulate the goods to be transported for a brief period. But do you know that it is a necessary investment for the logistics business as well? Many may see it as an additional expense, which is not required, but that is untrue. Warehousing helps boost productivity for the logistics sector by storing goods that cannot be transported overnight. It also gives the business owner better control over the delivery system and ensures timely deliveries, which helps improve brand reputation.

If you have a logistics business, you should consider the following advantages of warehousing to make a calculated decision.

Enhance inventory management

Many a time, small business owners do not care to track or manage their inventories, which lead to customer dissatisfaction through delayed orders and absence of products. Having a warehouse to store the goods will help you track your inventory from time to time and alert your customers on products that are out of stock, as well as offer effective alternatives.

Infographic created by WSI, a fullfillment logistics company
Encourages business expansion

In the absence of a warehouse, you may need to limit the influx of goods, as they have to be stored at the main establishment. Outsourcing the storage to a warehouse will not only resolve space issues but also allow you to use that space for advanced business operations. For example, if you are planning to expand your business and set up a manufacturing unit, you can do that without limiting product intake.

Reduce price volatility

The market prices keep changing depending on situations. However, if you have a warehouse to store goods for a longer duration, such price volatilities can be managed better. When there is inflation, you can offer discounts to help your customers get their supplies without burning a hole in their pocket. You can also meet high demands without increasing your expenses.

Business support

Warehousing not only helps store goods but also packs and ships them whenever needed. These are additional services offered by the warehouses to support your business. You may also get loans from the bank using your warehouse receipt. It functions as your security to borrow money for crucial business operations. Thus, keeping a warehouse can also help you in your rainy days, when you need to raise funds for important upgrades.

Improve customer service

The delivery system is an essential factor that determines the brand reputation of a logistics business. If your customers have an idea about the approximate time that their orders will take to reach, they will pay readily. And warehousing helps provide that information. As you can track and manage your inventory better, customer satisfaction is guaranteed through timely deliveries. It also helps reduce errors in deliveries and prevent loss of products during transportation.

Reduce external risks

Storing the finished goods in your main office space puts them at the risk of fire, thefts, and other external threats. Transferring these goods to a warehouse can make you breathe a sigh of relief. Effective warehouse services ensure 100% risk management with proper insurance coverage. If there is any damage, the insurance company of the warehousing service provider is liable to pay for it. Hence, you can rest assured that the warehouse service providers will take the most care of your goods.

Now that you are aware of the advantages of warehousing, you need to know how to choose the right one. The following suggestions may help:

• Location – Consider the location of the warehouse and make sure that it is not too far from your main office or operational area.
• Rents and taxes – Affordability is a primary concern for many business owners planning to I vest in warehousing. Compare the rents and taxes of multiple warehouses before making a decision.
• Additional benefits – As mentioned earlier, some warehouses go the extra mile to meet their customers’ specific needs. You should see if you find one like that.
• Labor skills and availability – If the warehouse employs unskilled labor, you may have doubts regarding its efficiency. Hence, make sure you get a thorough idea about the skills and costs of labor and how well-equipped they are in handling storage goods.
• Accessibility – The warehouse should be accessible from important landmarks, highways, and busy spots to increase the speed of deliveries. If possible, you should also check their proximity to ports and airports to ensure the seamless flow of goods.

Talk to your distributors and suppliers before making a final decision. Check the storage space and see if it meets your requirements. You need not pay for extra space if you do not need one. However, if you do not want to change your warehouse, as it is too good in every aspect, you should assess your potential scalability and rent the storage space accordingly.

Start warehousing today to take your business a notch up!