Once you’ve started searching for warehousing for your company, you can choose between either shared warehousing or dedicated warehousing.
Prior to making your decision, you should learn about the requirements of each and the overall budget you have. This will help you decide on the right option.
Ultimately, each warehousing style has its own pros and cons to consider.
Using Dedicated Warehousing
One of the benefits of using dedicated warehousing is that the company utilizing it is in charge of the entire space, with free reign over all operations. With dedicated warehousing, your company will be the only entity that makes decisions regarding how the warehouse space is run.
On the other hand, you will also have to account for all of the costs associated with the day-to-day use of maintaining the warehousing operations.
Expenses with dedicated warehousing may include equipment, utilities, rental fees, insurance, or mortgage incurred over time. These expenses are also static in most cases, with fixed rates.
Utilizing Shared Warehousing
Shared warehousing works completely differently compared to dedicated warehousing and trucking services. Businesses share a service warehousing space with other companies with this type of warehousing.
However, businesses receive more than simply access to the space; the supplier also maintains the facility, which means that costs associated with maintenance and operation are divided between all of the companies sharing the warehouse.
This helps each business save money because they don’t need to be concerned regarding spending. Companies also don’t need to hire staff to maintain the warehouse.
Prices will vary based on the options selected, with overall costs fluctuating depending on how much activity each business is expected to generate, including the buying and selling of inventory.
Benefits of Utilizing Shared Warehousing
Small businesses just starting up are the ones that will reap the most benefits from using shared warehousing. Demand often fluctuates, which may make it challenging to determine appropriate levels of inventory.
Shared warehousing is also ideal for companies that may want to reduce their warehousing space or increase it as their inventory shrinks or expands.
Smaller companies will likely benefit most from shared warehousing, but at the same time larger more established companies may want to consider dedicated warehousing for full control.
Shared warehousing is more cost-effective for many types of businesses that are just getting started and may not have the largest budget to work with when looking for warehousing services.
Managing warehouse space is also another distraction that’s eliminated with shared warehousing, whereas businesses are entirely responsible for managing their space with dedicated warehousing.
To get the most from your warehousing operations, you should consider which option works best for you. If you’re a start-up with an inventory and budget that’s constantly changing, you’ll likely see the benefits of shared warehousing.
If you’re a large business that requires ample space to maintain a vast inventory, with a budget that allows for the hiring of management staff and larger space, dedicated warehousing is ultimately the better option. Consider what your business requires and choose accordingly, as both types of warehousing have their benefits.