Could On-Demand Warehousing Be the Right Fit for Your Supply Chain?
Thanks to the current global environment, the already rapidly expanding world of e-commerce has exploded as customers and businesses focus on ways to meet the needs of their clientele safely and efficiently.
As businesses and companies alike reflect on how to stay competitive, they are often seeking solutions that will allow them more flexibility while simultaneously cutting costs. The costs associated with leasing a warehouse, for example, can be astronomical. For many, the availability of warehouse properties and their associated costs can be so prohibitive that they block potential business owners from attempting to follow through on their visions of a successful ecommerce business. At worst, they drive current business owners into desperate measures to maintain their inventory storage spaces.
Looking for a warehousing solution that will allow your business to run smoothly without the hassle of owning a warehouse? Reach out to our team of warehousing and distribution experts for a free consultation to discuss how Redwood Logistics can help you.
What is on-demand warehousing?
An available solution to the problem of prohibitive warehousing costs is on-demand warehousing. Essentially, on-demand warehousing is a logistics strategy that matches businesses with a need for short-term or temporary warehouse space with warehouses that have excess capacity.
Thanks in large part to eCommerce giant Amazon, consumers have developed an expectation that products ordered will arrive in a very short window of time, leaving businesses that are unable to offer 1-2 day shipping at a distinct disadvantage. Utilizing logistics strategies like on-demand warehousing can help small to medium-sized businesses circumvent this issue by adding additional warehouse space and order fulfillment in strategic locations across the country, thus shortening shipping times.
There are many types of on-demand warehouses
The above is only one example of how on-demand warehousing provides a variety of advantages, chief among them being flexibility. There are a variety of models, but the most common is where the warehouse owner acts as a fulfillment company- handling warehouse storage, inventory, picking, packing, shipping, and more. This kind of flexibility allows business owners to elect to opt-in to complete fulfillment services and is more akin to a 3PL service.
Alternatively, they can decide how much they wish to take on themselves and work with the warehouse company or fulfillment partner to delegate aspects of their supply chain. This model can be especially beneficial for small business owners, who may need less inventory space. Having access to a suite of supply chain management services in addition to product storage is a boon.
On-demand warehousing is also scalable, which is an important aspect for businesses that experience seasonal shifts in volume or are attempting to grow or expand.
On-demand warehousing grows with the needs of the businesses it serves and allows companies to make decisions such as adding new products to their lineup without fear of space availability constraints. It also allows business owners and start-ups to work within shorter timeframes, having no need to commit to longer leases typically associated with warehouse spaces that are not shared. On-demand warehousing often has inventory storage options for as little as six months to a year.
In addition to the flexibility, scalability, and short term lengths available, on-demand warehousing assures that the warehouse space being used already meets security and climate control needs. When leasing your own warehouse space, the additional costs associated with assuring that the building is secure, whether that be in making adjustments to the structure or hiring security professionals to keep an eye on your product, means costs continue to add up. This applies as well to climate control concerns.
However, when engaging with an on-demand warehousing solution, these concerns are covered by the warehouse owner and are usually built into the competitive pricing for space. The best warehousing providers use the latest available technologies to protect their partners’ inventory from theft and vandalism, weather concerns, and other potential damage costs.
Understanding all the factors of on-demand warehousing
Finally, on-demand warehousing includes systems like micro-warehousing or micro-fulfillment centers. With last-mile delivery being a huge focus for goods that need to be close to urban centers, are branded to a specific region, or are only relevant in specific areas with specific weather conditions, utilizing local warehouse space makes the most sense.
There is a broad range of factors driving the expansion and growth of on-demand warehousing centers. Warehouse consolidation, small business expansion, and cost-cutting, the rise of eCommerce, and so on. The growth of this industry availability of their options works to the benefit of companies seeking to expand their reach, scale their inventory storage options, partner with a 3PL or warehousing/fulfillment company, shorten their shipping times, or save on real estate purchasing or leasing costs.
No matter which reason, on-demand warehousing can be a huge ROI for many companies. Contact Redwood Logistics today to find out how you can get started with an on-demand warehousing solution.