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Top 8 Factors To Consider For Warehouse Location & Construction

Puneet Bhalla

Associate Director - Marketing @ Shiprocket

December 26, 2016

7 min read

Choosing an appropriate location for your warehouse is one of the essential tasks you must do before starting an eCommerce business. This can make a huge difference in how efficient the company will be. It would help if you had a proper plan before choosing the correct location. This would make your company credible and profitable at the same time and will also help you serve your customers better.

What is a Warehouse?

A warehouse is a place or a building 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.

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

How To Take Warehouse Location Decisions?

Buying or renting a warehouse at a particular location is a significant task directly proportional to the business’s success. So, it would help if you considered all the required criteria beforehand. The site you select is the place most suited for the company, which will benefit the eCommerce brand directly. 

This is a complex process, and any silly mistake while choosing the location can lead to the failure of the business. Certain factors must be considered while making the monumental “warehouse location decisions”. The most suitable places are those that maintain an integral balance between convenience and a reasonable price rate.

Factors for warehouse location and construction

Warehouse Layout And Flow

The design of a warehouse is determined by the type of operations to be conducted inside it. Remember that 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 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 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 make up 25% of the largest employers of 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 or renting a building at an offbeat location might help you minimize the costs but finding a skilled workforce will be a challenge. If you plan on getting your workforce from another location, that would cost you a lot of money. 

It is recommended to have your warehouse in an area with an adequate supply of skilled labour to facilitate smooth operations.

The locations linked to high-density residential areas with negligible worker transience can be an ideal choice for your warehouse. For non-seasonal requirements in such areas, the labour costs can escalate significantly. However, if you plan on establishing your warehouse in an area with an irregular supply of workers, ensure this seasonal workforce does not hamper your organization’s needs. 

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 your warehouse location with less intensive usage. It would be best if you also considered other factors like emissions, noise levels, and the availability of outdoor storage. These requirements also influence the districts you can target for your future operations.  

Moreover, if your target audience lies in a particular region, you can buy or rent 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 by such means. Proximity to your customers is another factor that you must consider. 

For example, if you sell actively in Bengaluru, you can store your products in a fulfillment facility near Bengaluru. You can deliver products faster and reach the target destination without paying high shipping costs.

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

Warehouse location factors

Material Handling Capabilities

Another factor you should consider when choosing a location for the warehouse is the availability of handling equipment and staging facilities. If the primary model is a truck, ensure the facility has depressed docks. Ask if there is a need for the ports 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 good material handling capabilities.

If you ship fragile items like glassware, crockery, etc., you should ensure that you store the items very carefully. 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 the size of your company’s requirements. For all startups and new companies, it is essential to ensure 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.    


Before you buy or rent any warehouse facility, you must inquire about all the prevalent regulations and policies in that location. Some locations may not allow the storage of certain types of goods. If you deal in those goods, it is best to avoid them to avoid any future hassle.

Risk and Security

You need to also evaluate the potential risks, such as natural disasters, crime rates, and proximity to hazardous facilities, before zeroing in on the warehouse location. Also, consider implementing security measures to safeguard inventory and ensure your staff’s safety.

Final Thoughts

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

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2 thoughts on “Top 8 Factors To Consider For Warehouse Location & Construction

  1. 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. 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

    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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