To lease or not to lease a warehouse: Cloud-based technology gives business owners a new tool to tackle needs.
One size does not fit all. That’s particularly true when it comes to warehousing. There simply is no single warehouse solution that works for every business in every market condition. But determining whether it makes sense to lease a warehouse or explore a mixture of solutions is a daunting undertaking for any business owner. The need for space is often immediate and spending months evaluating providers creates the possibility of unrealized revenue and increased loss rates from inefficiencies.
Questions inevitably arise during the process. And the answers determine how businesses will tackle the most central challenges to warehousing and fulfillment which invariably determine the overall health of a company. Fortunately, as I point out below, the emergence of cloud-based technology has given businesses a new tool for shaping more agile and shock-resistant supply chains. As a result, the answer to the question whether or not to lease a warehouse has evolved.
Here are some of the other questions I encountered — and the answers I found:
How do I vet warehouse providers?
Let’s say you run a small business that has recently experienced rapid growth. While, initially, you were able to make do with a local solution, your business is gaining ground in other regions. Now, its future viability hinges on how quickly you scale up warehousing capacity and fulfillment services to meet the demand.
Until recently, business owners had few options but to call warehouse operators across the country or hire an agent to do the work for them. But comparing warehouse KPIs typically takes months — and that’s before the start of contract negotiations, which can add weeks, if not months, to the process. Hiring a contract logistics partner (3PL) also tends to be slow — the setup may take six months to a year — and often requires the submission of a growth forecast that despite best efforts and lengthy analysis can easily miss the actuals. How much time do you have?
What’s new: On-demand warehousing software platforms now let you tap into vast networks of logistics providers. With the Warehowz cloud-based platform, for instance, you can cut your search for warehouse space and services from months to hours. The vetting has already been done for you. All you need to do is choose one or several providers and then sign one uniform contract with all your customized KPIs. A dedicated Warehowz Relationship Manager guides you through each step in this process. Applying best practices and acumen gathered through thousands of hours of network development, our team will help you deliver the highest level of supply chain results for your business. With Warehowz, even a micro-company can have a nationwide delivery and fulfillment network typically reserved for large corporations.
How do I know which locations would be optimal for my business?
As demand for speedy deliveries has picked up, so has the need for businesses to get closer to their customer base. The booming construction of warehouses and multi-level warehouses in urban areas underscore that trend. But few companies can lease a warehouse long term and invest in labor and equipment before establishing whether the location really is as lucrative as they hope. Ideally, you want to explore new markets without the weight of a long-term lease and other overhead costs.
How you can make it happen: The Warehowz on-demand warehousing platform is not only about space; it is also designed to manage your supply chain. On-demand warehousing adds agility to your warehouse network, allowing you to run trials in promising markets before making a more permanent move. At Warehowz, we actively provide our clients with customized suggestions based on their current structure and growth mode. If we think your business would benefit from an additional warehouse in, let’s say, the Southwest, we will say so and help you make it happen.
What’s the best way to deliver a product without spending too much?
The nature of e-commerce means micro-businesses have a greater chance of success. A local favorite can suddenly become a nationwide player. Even without large-volume orders, you can incrementally grow your business by serving customers across the country or in regions where your products are showing promise. The biggest challenge to an expanded scope: delivery costs. Leasing warehouses from coast to coast is hardly a sound plan for a small business, nor is patching together a distribution network of partners, all with their own tracking systems and fee structures, which still may not cover all the areas you need.
Here’s something you should know: You can gain access today to a nationwide delivery and fulfillment network that lets you negotiate prices and pay as you go. As a result of Warehowz’s partnership with Estes Express, the nation’s largest privately owned freight transportation carrier, you can leverage the Warehowz on-demand warehousing platform to take advantage of Estes’ vast network of end-to-end transportation and custom logistics services, including a large selection of cross-docking facilities. Warehowz gives you a clear view of your entire network and enables ease of monitoring of every shipment.
Is it really possible to replicate our internal delivery system?
Short answer: Yes. I often talk to companies that are reluctant to leverage on-demand warehousing because they believe their own internal delivery system is so complex that no one else can do it. Trust me, it can be replicated. Success depends on leveraging technology, partners, and thoughtful engagement. It can be done.
How can I determine whether I got a good deal?
A “good deal” rarely equals the cheapest option. What is the condition of the facility? What services are included? Manually calling or emailing every warehouse candidate is, again, a very time-consuming endeavor that may still not secure the type of deal that you need.
A better way: Leverage an on-demand warehousing platform for a quick, efficient, and insightful analysis of available warehouses, service offerings, and pricing options in your target location. The Warehowz technology and our dedicated relationship managers will provide immediate access to years of supply chain expertise. Now, that is a better way.
Do you have more questions for me about on-demand warehousing and how Warehowz can help your business grow? Let’s talk.