The Upside of Shared Warehousing

Every business has differing needs and when you are searching for a solution to store your products and meet storage requirements, there are two types of warehouses to examine. There is the dedicated warehouse, often a perfect solution for the bigger, long-standing business and the shared warehouse.

The dedicated warehouse is a space owned or rented solely by your company. The rent is the same amount every month. You and your company are responsible for the overall operation and are in complete control over the space, including the managing of staff and overhead costs.

These costs are fixed regardless of the volume of orders.

The shared warehouse is a space where more than one company stores their products and it is managed by a third party. Many smaller companies may look toward the advantages of a multi-client warehouse because it offers cost-effective and flexible storage.

warehousing

You may have reservations about sharing space with other companies in a shared warehouse, however, there are more advantages than disadvantages. Here are three of the advantages:

Cost

The costs for the warehouse space, including personnel and facility management, are shared by all the companies using the space. You pay for the space that you use; no worries of a half empty warehouse taking up resources.
Shared warehouses eliminate the need for you to hire employees to pack, store and ship your products. You are not paying full-time wages if there is only part-time work. Costs can differ between dedicated warehousing companies, too.

Shared Resources

This does not mean that you and the other companies will be sharing each other’s products. Sharing resources means that your products can be stored in the specific way they need to be stored; such as refrigerated or temperature controlled.
If your business requires specialized tools, equipment or packing, the costs are divided among the customers, reducing the overall expense.

Knowledge and Expertise

You will have access to the most up-to-date management systems. These warehouses are usually managed by logistic experts who focus on maximizing space management, reducing costs and have the expertise and knowledge of dealing with multiple products.
They are familiar with how to manage freight correctly and in a timely manner. You are also able to monitor your inventory with online reporting and this ultimately will benefit your customers.

Shared warehousing is especially advantageous for companies that are just starting up, have a product that fluctuates in demand or has a small clientele base. If your business requires several distribution points versus one large facility than shared warehousing is an optimal solution.

Contracts

Contracts for shared warehousing can be shorter which offers flexibility for your needs.

The costs for these warehouses are spread more equally across the companies that use the space. Most costs in storing products fluctuate with the time of year and the demands of the customer. This affects the volume and activity levels of your product.

Shared warehousing allows your business to adjust to these cyclical changes without finding yourself with a half empty warehouse that costs your business unnecessary expense.