Finding a warehouse for your business can be challenging, but you can simplify the process if you know what to look for. You need to think about efficiency, cost-effectiveness, and great customer service, among other crucial factors.
Since your warehouse plays an essential role in your entire supply chain, you need to find the right one for your unique business needs. Read on to find out how.
How to Find the Right Warehouse for You
There are three primary steps in selecting the right warehouse for your needs.
Step 1: Assess what you need.
This step is very straightforward. You can’t randomly pick a building for storing inventory without considering your needs first. For example, you need to make sure the size of the space accommodates how much inventory you have. Additionally, if you are storing perishable items or any semi-vulnerable item for an extended period of time, you’ll need to make sure temperature control is a top priority.
Some questions you should ask yourself before choosing a warehouse include:
- What type of products do I need to store?
- Is this going to be the sole warehouse I use to store all of my products?
- Am I looking for an additional warehouse to boost efficiency and lower costs?
- Do I need a warehouse to store surplus goods?
- Are you looking for expansion opportunities?
Whichever the case, define your needs and let them be your guiding light.
Step 2: Decide between leasing vs. purchasing a warehouse.
Another choice you’ll have to make is deciding whether to lease or purchase a warehouse. Both provide a variety of benefits, as well as a few disadvantages, so there is no choice that is better than the other. It really depends on your personal preferences and business situation.
Leasing provides many benefits. Some advantages of leasing include:
- You don’t have to provide a down payment
- You can also get a graduated lease, under which your landlord might adjust your monthly payments periodically.
- Many landlords are happy to cover a great number of renovations and other warehouse improvements.
One downside of leasing, however, is you won’t receive tax benefits, nor will you build equity.
On the other hand, purchasing a warehouse means providing a large investment up front. While this is a disadvantage initially, purchasing offers a wide variety of advantages as well:
- You’ll build equity
- You’ll get tax benefits
- You can build upon and change the structure of your purchased warehouse in order to meet your ever-changing needs
There’s no one-size-fits-all solution, so carefully consider your needs to make the right decision for your business.
Step 3: Secure a warehouse in advance.
The last thing you’d want to do is search frantically for a warehouse when you desperately need it. You could lose business and make haste decisions that might not bode well for your company.
You should secure one well in advance, way before you need it so that you can make a smooth transition and ensure you make a decision that benefits the growth of your business.
Important Things to Consider Before Choosing a Warehouse
Once you’ve determined your needs and decided to lease or buy a warehouse, it’s time to consider several crucial factors for choosing the right facility.
1. Storage requirements
Are your core products fragile or perishable goods? Perhaps potentially hazardous materials? Consider the type of products you’re going to store to find a location that’s equipped to store them properly.
Keep in mind the square footage, flexibility, safety regulations, grading and packing, and anything else that ensures safe and adequate inventory storage.
Most importantly, make sure your chosen warehouse has proper risk management practices in place, such as fire suppression systems and surveillance. Of course, you can always install those later.
2. Proximity to target customers
If your warehouse is close to your target customers, you can offer faster delivery, which translates to lower shipping costs and better customer service.
Your carrier services should also be in close proximity to streamline the shipping process and lower your transportation costs.
3. Labor requirements
Take the time to research the demographics at the warehouse location you’re considering. Find out if there may be high demand for warehouse workers, which could mean you’d need to offer higher salaries.
Research the available workforce’s skills in handling your products to determine if you may need to train them. Find out everything about the workforce at your desired location to see if you can work with quality employees who would boost your operational efficiency.
4. Expansion plans
Does the warehouse that you’re eyeing have the room for a potential expansion? If you plan on growing your business, make sure the facility can accommodate the growth.
Check if it offers flexible, cost-effective options for scaling up if you have plans for expanding your business, especially if you’re thinking about reaching new markets.
Choosing the right warehouse for your business does require a lot of planning in advance, but it doesn’t have to be complicated. If you follow these essential tips, you’ll secure an excellent warehouse in no time.
If you need top-notch warehouse management services in Chicago and the surrounding area, JRC Dedicated Services is here for you.
Contact us today to request a free quote or to get a free consultation and discuss your warehousing needs.