So, you're finally outgrowing your warehouse. That's great—right?
Maybe yes, and maybe no. Running out of room in your warehouse can be a sign of great growth for your business, but it could just as easily be a sign of storage mismanagement.
Before you rent another warehouse or pack up your current inventory to move to a bigger location, you must first determine the reasons why you are running out of space. This determination will help you make informed decisions about what to do next and how you can improve your warehouse operations.
Reasons Why You're Outgrowing Your Warehouse
1. Increased Inventory Volume
Sales are up, and you need more space to hold inventory. This is a great problem to have, and it is a strong sign that your business is growing. You must have the appropriate storage space in order to meet your customers' increasing demands.
2. Improved Shipping Process
As your business grows, you may find that it is necessary to open another distribution center. For example, you may want to have one center on the East Coast and one on the West Coast to provide faster and more efficient service to your customers. Creating a more efficient delivery to your customers and an opportunity to streamline your warehouse operations.
3. Temporary Storage Needs
Is it your busy season and you have more inventory than normal? Did you get a great deal on bulk inventory and now have no place to store it? If the need for more space is a short-term problem, you may only need a temporary storage solution rather than searching for a new warehouse. If this will be seasonal, maybe warehouse operations procedures need to put in place to handle this recurring need.
4. Warehouse Redesign
If your current warehouse structure is not working efficiently, you may need to create a storage plan that works for you. For example, some businesses keep their fast-moving inventory in their primary warehouse while storing slower-moving or excess inventory in a nearby secondary warehouse. If this is the solution to your problem be sure to update your warehouse operations procedures to ensure delivery of any new stock to the correct warehouse.
5. Storage Mismanagement
Another reason that you may be out of space is that you are holding too much unwanted inventory. If you have inventory that has been sitting on the shelf for years, you will need to make executive decisions about what can stay and what needs to go.
Once you determine the reasons why you are growing out of your space, you will be able to find viable solutions that allow you to meet your storage needs.
- Larger Warehouse: When you simply need more space, a larger warehouse is the best solution. If costs are a concern, you can try to move further away from the city than your current location. This may allow you to find a larger warehouse for the same price.
- Secondary Warehouse: Whether you want to open a new distribution center or you have excess inventory you need to put somewhere, opening a secondary warehouse is the ideal solution.
- Third-Party Logistics: When you're in a bind and you need a place to store, and even ship, inventory on a short-term basis, third-party logistics can help. These professional service companies can help you avoid the need to rent a new space by providing the storage for you for as long as you need it.
- Sale of Old Inventory: There comes a point when your old inventory may be costing you more in storage than it's worth. Having a sale can help you move your older inventory out of your warehouse to make room new items. There are even companies that will purchase an entire container of goods to help move these items quickly.
There are many variables to consider when deciding what action to take when you've outgrown your warehouse.
A professional logistics consultant can help you make the right choices for your business. They can assess your current warehouse's structure and work with you to determine which additional warehouse options will be best for your specific situation. Don't forget to implement warehouse operations best practices if you will be following any of these outlined solutions.