Finding a Great Warehouse to Meet Long Term Business Storage and Fulfillment Needs
When looking to find warehouse space for your business, there are many considerations. The important thing is to lay those down on paper – and measure potential warehousing partners against your exact current needs, and how it can meet potential future needs. Not all warehouses are created equal. Sure, you may just want a cheap place to hold some buyer beware. Here we outline key considerations that should be on your list when evaluating potential warehousing partners.
Questions to Consider When “Interviewing” Potential 3rd Party Warehousing Companies
1. Can the warehouse meet your growth needs and grow with you?
2. Is there a variable inventory storage cost structure that will allow you to save during seasonal downturns when you need less space? And additional space during peak season, “on demand”, when business is up?
3. Will they add you as an additionally insured on their insurance policy and provide you a certificate of insurance?
4. Is the warehouse clean and tidy? Suitable for your product?
5. Is adequate security in place?
6. Do they have rodent and pest control measures in place?
7. Do they meet required standards for building safety and maintenance (look around, are fire extinguishers in place and is inventory well stacked on appropriate racks).
8. Do they provide fulfillment services?
9. How is fulfillment services billed – what is the cost structure?
10. Are they connected to transportation carriers that can cost effectively deliver your freight to customers or other centers>
11. Do they have attractive courier account rates which you can leverage – can they pass on their discount to you to help you realize savings to offset warehousing costs.
12. What is the total cost to you?
With the last point on warehousing services cost, be careful to make an apples-to-apples comparison. Based on the services/benefits you need (the questions above of which will help); formulate what each prospective warehousing partner can offer, the ones you will need now or in future, and then come up with a projected budgeted cost.
Switching from One Warehouse to Another – Measure Costs Carefully Now
Consider warehouse switching costs now. If you go with a lower cost warehousing service provider because some advanced services you might require in future, not now, then compare short term savings to the costs of switching – moving all your warehoused inventory to a new warehouse location. Consider also soft-costs. A key facet of employing a 3pl warehousing partner is that they’re closely integrating into your operations and will become a key partner and hopefully, problem solver.
Having to re-establish a strong relationship with a new partner requires “starting over” in many respects. You have to re-explain everything you need as you’re leaving a warehouse and the people there that know you and your business well. There’s cost there. Also, beware 3PL ‘s that are larger and where your only interaction is with a salesperson. Often, promises come easy and are not always backed by operational there are caveats. Flesh those out early and visit, speak to management on the floor. Ensure that the service they provide is exactly what you need and that they’re doing it for others, too.
