Top 7 Factors to Consider for Warehouse Location & Construction

If you are planning to start a eCommerce business, one of the first task is investing your money according to a curated and well researched business strategy. Warehousing is one such essential segment of your online business strategy. It is used to manage and store the products to be sold online.

What is a Warehouse?

Warehouse is essentially a place or a building which is used to store products for stocking, packing, and shipping preparation. 

If you’re thinking about constructing a new warehouse and going through the selection criteria for choosing the best location for the building, there are certain factors you must keep in mind.

Factors for warehouse location and construction

Below are the factors that affects the construction of your warehouse and needs to be considered while finalizing your warehouse location:

Warehouse layout and flow

The design of a warehouse is determined by the type of operations to be conducted inside it. Remember that the old buildings are not very useful in carrying out the material flow for any business. Certain factors like ceiling height and column spacing can restrict the type of equipment that can be accommodated in the given space.

According to warehouse design standards, new centers built in the last ten years or so are designed to have clear spans between 24’ and 34’. Larger, automated centers with very narrow aisles and picking systems are now built to 54’.

Improper design can hamper the inward flow of raw materials and the outward flow of goods. This means that the flow of products within the warehouse must be formulated and identified before the design is built. The operations within the warehouse and the flow of goods will help determine the final design. 

So, before you decide on making a particular building as your warehouse, it is essential for you to thoroughly determine whether the layout and space will aptly fit your requirements or not.

Warehousing and storage makes up 25% of the largest employers of the material moving machine operators—by far the highest among any industry. Your layout and design must be ergonomic to prevent injuries and accidents. For instance, it must not include uneven surfaces, unprotected edges in racks and bins, etc. 

Related Post: Warehouse Management 101 for Small Scale Businesses

Availability of Skilled Workforce

Purchasing a building at a remote location may incur less costs, but finding a skilled workforce at such a place can be a challenge. If you plan on moving your trained workforce from a different location to the warehouse, it can be a pricey affair. It is recommended to have your warehouse in an area that will has adequate supply of skilled labor to facilitate smooth operations.

The locations that are linked to high-density residential areas with negligible worker transience can be an ideal choice of your warehouse. However, if you plan on establishing your warehouse to an area with an annual supply of workers, make sure that this seasonal workforce does not hamper your organization’s needs. For non-seasonal requirements in such areas, the labor costs can escalate to a greater extent.

Zoning and Desired Customer Base

How intense operations are you planning to conduct in the warehouse? What are the future trends of this intensity? In case your activity demands light assembly, you can choose the location of your warehouse that has less intensive usage. You must also consider other factors like emissions, noise levels, and the availability of outdoor storage. These requirements also influence the districts that you can target for your future operations.  

Moreover, if your target audience lies in a particular region, you can buy or construct a warehouse right there. It will help you cater to their needs faster and understand their requirements better.

Proximity to Major Linkages

Which mode of transport is the most convenient for your business? Do you prefer land, rail, water, or air transportation to move your goods? Whatever your needs are, it is essential to have your site easily accessible to such means. Proximity to your customers is another factor that you must consider. For example, if you sell actively in Bangalore, you can store your products in a fulfillment facility near Bangalore. You can deliver products faster and reach the target destination without any hassles of being situated away from the city!

If most of your products are exported by sea, and rest is delivered via land to the retail locations, it is imperative for you to have a comfortable railway and highway access. More than 20% of your cost comes from the transportation of the goods. Moreover, high gas prices, increments in the driver wages may nudge your decision towards rail transport as opposed to shipment by truck. Additionally ,if the goods are less perishable and sensitive then opting for rail transport is an ideal choice. 

Warehouse location factors

Material Handling Capabilities

Another factor that you should consider when choosing a location for the warehouse is the availability of handling equipment and staging facilities. In case the primary model is a truck, make sure the facility has the depressed docks. Ask if there is a need for the docks to be internal. A highly intense distribution often requires cross-docks. Inquire if there is enough storage facility available for the goods. These will help you understand if your warehouse has adequate material handling capabilities.

If you ship fragile items like glassware, crockery, cultures, etc., you should make sure that the products are not housed very high. In that case your warehouse must be larger horizontally than vertically. You must pick a location that can give you a chance to expand later. Also if you handle potentially hazardous substances, they should be dealt with precaution and the warehouse must not be located very close to the city. 

Related Post: How Automation in Warehousing is the New Trend

Size of the Warehouse

Size, of course, is an obvious criterion. Your warehouse facility must be capable of accommodating your inventory and fit in the size of your company’s requirements. For all startups and new companies, it is essential to ensure that there is enough room around the facility for expansion. This will help save time and money when your business is riding high on the ladder of success.    

Regulations

Before you buy any warehouse facility it is important for you to inquire about all the regulations and policies that are prevalent in that location. There may be locations that do not allow the storage of certain types of goods. If you deal in those goods, it is best to avoid them so as to avoid any future hassle.

Final Thoughts

Bottom line, these are a few of the many factors that you need to consider when looking at a new warehouse location. Apart from these seven factors if there are any other factors that you consider essential, let us know in the comment box below.

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Puneet Bhalla

Senior Marketing Manager at Shiprocket

7+ years of experience in growth hacking and product marketing. A passionate digital marketer with a great blend of technology. I spend most of my time upskilling and experimenting, for my love of doi ... Read more

2 Comments

  1. Shenectady Wilson Reply

    Thanks for sharing your article about the choosing warehouse location. I like that you talked about how important it is to check first the regulations and policies that are prevalent in that location. My father is interested in the brokerage business. He’s looking into buying trucks for the business. It’s important for us to choose a space that will allow him to store his future trucks. I will make sure to share your blog with him when renting a space.

  2. Akhileshver Pratap Singh Reply

    Dear Sir,

    How are you doing? I hope you are doing well. I am a resident of Kanpur and i have a small farm of 6 hectares near BHIMSEN Junction (Radial distance 1.2 km). I am a graduate engineer in EC stream and i am looking for business option near about my Land.
    As per documents uploaded in DDFCL website Indian Government has a plan to set up Logistic Park near proposed separate BHIMSEN station on DDFC railway line . Luckily it is very near to my Land. Hence i am very much interested to use my land for purpose of Warehouse or related to this business.
    Beside this station this land have other geographical advantages. All distances are radial.
    On Interconnecting Road Sachendi-Ramaipur Highway cordinates 26.408564, 80.216423
    https://goo.gl/maps/SBshjCFi41MAb7uLA

    Distance from NH-2 (Chakarpur Mandi Mode): 5 KM
    Distance from NH-2 (Sachendi Market Mode): 6 KM
    Distance from Hamirpur Highway (Ramaipur Mode): 11 KM
    Distance from Bhimsen Junction : 2 KM
    Distance from Logistics Park Panki : 6 KM
    Distance from ICD Juhi : 7 KM
    Distance from New Transport Nagar : 7 KM
    Distance from South Kanpur(Barra ByPass) : 7 KM
    Distance from Kanpur Air Port(Chakeri) : 20 KM

    I what are the best options for me ?? And how i can material these options.

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