When you're storing goods, you might think it's as simple as building or renting a warehouse. But, the type of storage space you select can have an impact on your ability to fulfill orders on time, every time and satisfy customers. This is why it's critical that you spend some time giving thought to the type of warehouse you need to support your business objectives.
To help you select the best type of warehouse for your business, we've outlined the different types in this post.
Distribution warehouses are used to store and sell large quantities of goods. Typically, distribution centers house goods from multiple manufacturers that in turn sell to retailers. Goods are usually housed for a short period of time; in some cases for just days at a time. The distribution center is a key part of the supply chain, so it's important to set it up correctly. With a smoothly run supply chain, you'll be able to better serve a high volume of customers.
Climate-controlled warehouses are most often used to store and ship perishable goods. Climate-controlled warehouses can range from humidity controlled environments—to store things like fresh flowers— to freezers that store frozen foods. Whatever the type of perishable, climate-controlled warehouses are a must to keep your fast-moving goods at the required temperature and thus, resellable.
Private warehouses are typically owned by large retail corporations or companies that privately store goods. Also known as proprietary warehousing, such facilities demand an upfront, capital investment to build and maintain. A private warehouse may be built on-site near manufacturing or off-site. This option is great for established companies that are willing to make a financial investment in the storage of their own goods.
A public warehouse is a great option for companies with short-term warehousing needs. For example, if a manufacturer or retailer runs out space to store goods, a viable option is a public warehouse, where you can rent space to store your overflow goods for a short period of time. This type of storage facility is great as it allows you to deal with overflow until you know you are ready for an additional warehouse.
An automated warehouse is highly efficient, fast and agile. Automated warehouses use order tracking software to receive, store and move goods. An automated warehouse also uses modern equipment like forklifts, racking and pallets to move goods quickly within the warehouse. With the right wholesale distribution software, you'll have less incidence of human error and the ability to receive and ship goods more efficiently.
A fulfillment center is a third-party (3PL) warehouse where warehousing, order processing, picking, packing and shipping for eCommerce partners is handled. Fulfillment centers are used by many eCommerce merchants today to outsource their storage and shipping of goods. In this model, sellers ship goods to the fulfillment center and when an order is placed, the fulfillment center ships out the order. This eliminates the need for growing eCommerce retailers to maintain their own warehouse.
In any case, whichever warehouse you choose to go with, be sure to consider both your short-term and long-term distribution needs. You may end up choosing a public warehouse or fulfillment center as you grow your business. Or if you know that demand is already on the rise and you're an established business with the capital available, it may make sense to build or rent your own warehouse.
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Categories: Wholesale Distribution