Running your own business comes with a wide variety of challenges, and you constantly need to improve business processes in order to boost efficiency, so you can scale your business for future needs. One of the best ways to make running a business easier is to make your supply chain run as smoothly as possible. Your supply chain is complex and made up of many moving parts including your manufacturers, vendors, transportation solutions, and, of course, warehouses.
Traditionally, companies simply need warehouses for storage space, and the need for that isn’t going anywhere any time soon. In fact, thanks to the incredible popularity of e-commerce, it’s estimated that the United States will need an additional 1 billion square feet of warehouse space to keep up with customer demand. This is partially due to the COVID-19 pandemic, which saw more customers going online than ever in the midst of lockdown restrictions. This makes industrial real estate extremely valuable, and closed-down stores and malls are already being converted into logistics centers and warehouses. Of course, the importance of warehousing goes beyond storage space these days. Here are a few other lesser-known benefits.
Inventory Management
No retail business can operate without properly taking stock of its inventory and ensuring that it keeps moving. Keeping it moving is the difficult part for most businesses. It’s believed that, on average, only about 10% of a store’s inventory is in transit at any given time, and the rest remains stationary, either on store shelves or in a warehouse somewhere.
It’s one thing if you’re an apparel retailer, and you have boxes of your popular stretch pants for women sitting on your own shelves or in your own storage locations. But what happens when your customers who shop women’s pants want work pants, dress pants, slim fit trousers, or stretchy pants that offer the perfect fit, and you don’t have them in stock? If they’re just sitting in your vendor’s warehouse, then you’ll have a backed-up inventory on your hands.
You need effective inventory management to keep track of the goods that you actually own and accurately convert them to revenue once they’re sold. You also need to know immediately when you’re running low on stock in your store, so you can automatically order more from your warehouse. When you go with professional warehouse rentals, their supervisors will often have their own inventory management software that you can integrate with. This way, you have a great option to take the headache out of your inventory, so you can focus on your core business tasks.
Better Production
You can get more out of a warehouse than simply storing and tracking your finished products. It can also make it easier to monitor your production quality and costs if you have your raw materials shipped there, so you can track everything from the start of production to the finished product. This also makes it easier to track the source of any faulty raw materials, and it will be easier to pinpoint any bottlenecks in your supply chain.
Customer Satisfaction
Since warehousing saves you from having to fulfill each customer order from your own production facility, it’s much easier to guarantee timely deliveries. This also makes it much easier to keep up with the heightened demand during the holidays and annual sales, such as Black Friday or summer clearance sales. With warehousing, you can scale for growth easily by simply expanding your inventory in the building, whereas scaling your own store may require you to move locations and take on a variety of additional costs.
Having company warehouse space means that you can cut costs, keep better track of your production and inventory, and keep customers satisfied with quick order fulfillment.
