Tips on Choosing the Right Warehouse Space for Your Business
Consider location, price and size, of course. But wait, there is more in it?
Choosing a site for your first warehouse can be a bittersweet milestone to hit as a small business owner. On one hand, you’re probably seeking more storage because you’re growing or seeing an increase in sales; on the other hand, you’re getting into the daunting real estate game.
The perfect warehouse space for your business will be influenced by many factors like:
- Job market of the area
- Future expansion
It is important that you give them some thoughts. This is where commercial leasing experts can help with narrowing down your choices.
Here are three most important factors to consider when searching for warehouse space:
Location is likely the most important factor when it comes to deciding where to store your inventory. You’ll need to think about a location’s proximity to your customer base as well as your suppliers.
Brand perception is another, albeit less crucial, point to think about when selecting a warehouse location. Depending on the nature of your industry, you may want to tie your brand to a specific geographic location.
And before you look for any other features of the space, it might be useful to ask yourself some pertinent questions, such as:
- What measures are there for security and fire suppression?
- How many containers and/or packages can be shipped to and from this location per week?
- Will this space be able to handle storage, inspection, dispatch, labeling, packaging, inventory and reporting?
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Although warehouses comes with high real estate prices. But it usually comes with the savings on freight costs, especially for companies that ship in high volume, may offset the property prices. Business owners should also take labor costs into account. If a specific state has more desirable wage bracket, look into properties in smaller towns outside of that state’s major cities. Even within a state, real estate and labor prices can fluctuate.
Local political and economic climate can also affect prices. For instance, certain states may offer tax incentives that offset the initial price of the property. Sales tax is another point to consider because you’ll need to collect and remit taxes to the state government where your warehouse is located.
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How much space you need depends on a few key parameters, most important of which is the size of your product. It’s the difference between storing refrigerators and microchips.
The nature of your product also determines how you organize it within the warehouse. One common option is stacking product from floor to ceiling using metal racks to save storage space, which is ideal for piecemeal items. But racking can be heavy investment.
The alternative is to organize inventory on the floor, which is suitable for product that is packaged in stackable pallets, but the downside is it occupies more space. It’s tempting to use racks, but sometimes just paying for extra floor space can work out better financially.
Another crucial consideration is sales volume and the resulting rate of product turnover. For industries such as technology and consumer electronics, where demand is consistently high and inventory moves in and out of the warehouse within a month, racking may not be worth the initial investment and effort. For products that sit longer because demand is spotty or linked to seasonality, racks may make more sense.
You should not need to move all your stuff to a new space too often either. So, take your time and choose a reliable real estate company when looking for a warehouse with office space for Lease.
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