Learn All About The Types of Warehouses & The One That Will Suit Your eCommerce Business
The concept of warehousing is one of the most important aspects of any business. It might seem to be quite simple for many, however, it has a lot of diversification. There are a variety of warehouses, each having a niche of its own. Various factors such as the industry, location, and business requirements decide the kind of warehousing that’s right for your business. The type of warehouse you choose, in turn, has a strong impact on order fulfillment, ultimately impacting your customer relations directly. The more orders you fulfill on time, the more satisfaction builds among your customers.
It’s already the festive season and you must have ordered in bulk to meet the demands of your customers. What do you do now? You need eCommerce warehousing. However, before making any decisions, you must take a closer look at the different types of warehouses available for you to make an informed decision.
If you’re wondering which warehousing will suit your business the most, you’re at the right place. In this article, we will discuss everything about the different types of warehouses and the one that is right for your business.
Types of Warehouses
Distribution centers are warehouses that have larger space than other warehouses. These centers enable faster movement of goods of large quantities within a short period. Goods are procured from multiple suppliers and are quickly transferred to various customers.
These centers are an important part of the supply chain, as they provide fast and reliable movement of goods. Most of these centers have computerized control leading to higher efficiency. To increase efficiency and lower delivery time, you will often find these centers close to transportation centers.
In the case of perishable products, goods are stored in the center for less than a day, as they enter early morning and are distributed to customers by evening.
Public warehouses are the ones owned by the government or semi-government bodies. They are lent out to private sector companies to stock up goods upon paying a certain amount of rent. For small businesses and eCommerce startups that are not in a position to own a warehouse and need to store goods for a short period, public warehouses are a great option. This storage facility allows small businesses to deal with the overflow of goods until they are ready to own an additional warehouse. The affordability and accessibility of public warehouses attract small business owners to utilize the facility for their short-term storage needs.
As the name suggests, private warehouses are privately owned by large retail corporations, wholesalers, manufacturers or distributors. Large online marketplaces also have their privately-owned warehouses to store merchandise. These private companies purchase products in bulk for a peak season and store them in the warehouse for the systematic distribution of orders that are bound to come their way.
Private warehousing, also known as proprietary warehousing, requires capital investments by the owner, hence its best for established companies. Although it warrants investment in the start, it turns out to be exceedingly cost-effective in the long run. Private warehouses can also be a good option for small-scale eCommerce businesses if they require a long-term strategic presence in an important region.
Bonded warehouses are mainly owned and run by the government or private agencies. This type of storage is used to store imported goods before custom duties are levied on them, as the companies storing goods in these warehouses do not pay any duty charges until their items are released. The private agencies that run bonded warehouses have to obtain a license from the government before getting into this business.
Through this mechanism, the government makes sure that the importers pay their taxes on time. Without paying the duties, no importer can open their goods. Bonded warehouses are perfect for importers, as they can keep their items duty-free even for a long time until they find their customers. Such warehouses play a crucial role in cross-border trade, making them ideal for eCommerce businesses involved in international trade.
As the name goes, these warehouses are used to store items that need to be kept at a specific temperature, mostly perishables. Climate controlled warehouses can range from humidity-controlled environments that can store fresh fruits, flowers, etc, to freezers that store frozen foods. If you are into perishable items, climate-controlled warehouses are a must to keep your items fresh.
In today’s era of automation, warehouses are not left behind. Smart warehouses use artificial intelligence in their storage and fulfillment process. Everything is automated starting from packing items to transporting goods to the end-customers. These warehouses require minimal manual supervision, as they operate using the latest technologies. eCommerce giants like Amazon and Alibaba use smart warehouses to ensure their order fulfillment is less prone to human error.
Which Warehouse is Best For you?
Each warehouse has a purpose of its own. Whichever warehouse you opt for, ensure to keep both your short term as well as long-term distribution needs in mind. For example, if you are into the business of perishable products, you might consider going for distribution centers. If you’re an established business and have the capital to invest, you may choose a private warehouse for your business. If you’re into cross border trade and involve a lot in international shipping, you may want to opt bonded warehouses.