When you consider eCommerce, warehouses are an important part of order fulfillment, it is not just the storage space to use. Knowing about various kinds of warehouses will guide you to the right options to choose for your eCommerce business to grow online. Therefore, choosing the right one is crucial.
For startups and small-scale businesses, the importance of warehouses is huge, as they need physical space to store the goods. So let’s look at what you need to know before you choose a warehouse facility.
Warehouse Qualities to Look For
Even though you might find several warehouses while looking for storage facilities, you need to look for specific features in the warehouses that make them efficient and safe. They are:
- Safety and security
- Accessibility and market proximity
- Trained staff
- The latest mechanical appliances
- Emergency protocol up to the latest standards
- Prompt delivery and customer service
- Appropriate storage space
- Quality check
- Properly designed interiors
- Organized picking and receiving processes
- Updated software for managing the storage data.
Now that you know what are the features to look for in a warehouse, let’s get to know the different types of warehouses.
What are the Types of Warehouses for eCommerce?
When your company is growing its business to cross-border locations and running out of space to store inventory efficiently, you need to look for warehouses. Here is a quick list of different types of warehouses to consider.
1. Public Warehouses
Public warehouses are owned by the government and made available to the private sector companies when they need them. They can be lent for both personal and business purposes. If you are a small-scale business, and you are looking for storage space for your inventory, a public warehouse is an ideal option. Even though they are not so technologically advanced, they are affordable and accessible, especially for startups and small businesses.
2. Private Warehouses
Privately owned warehouses by wholesalers, distributors, and manufacturers fall under the category of private warehouses. Most of the large retail and online marketplaces have their own privately owned warehouses. Though they are expensive, they are the best options if you are looking for a major, long-term vital presence in a significant region.
3. Bonded Warehouses
A bonded warehouse is used to store imported goods before the duties and taxes are required to be paid on them. The authorities give bonds to those who are using the bonded warehouse to ensure that they do not have to face monetary loss, at the time the items are released from the bonded warehouse. The best part of a bonded warehouse facility is that you don’t need to pay the duties before the item is released from the warehouse. The warehouse even lets you store even the restricted items. You can even store items for an extended period. The best part of using a bonded warehouse is that the sellers can store the items duty-free until they find an appropriate buyer.
4. Smart Warehouses
Like the name says, Smart warehouses are completely automated using AI. Automated warehouses mean they have software for managing the day-to-day processes and robots, drones performing various processes like packing, transporting, weighing, and storing goods. Amazon and Alibaba are some popular ones, who use technology for order fulfillment which makes it less prone to errors.
5. Consolidated Warehouses
A consolidated warehouse is another type of warehouse that will take small shipments from various suppliers and then group them into a larger shipment before distributing them to the buyers. These shipments are all meant to be shipped to the same geographical region. Being grouped to ship, this is the most economical option available for startups and small-scale businesses. The investment and the volume of inventory required are comparatively lesser, making it the best option for small-scale eCommerce businesses. There is no capital investment required for consolidated warehouses.
6. Cooperative Warehouses
Cooperative organizations operate and own cooperative warehouses like wineries or farmer co-ops. Here the co-op members, as well as those outside the co-op, can store their goods, but only the co-op members can benefit from the reduced price.
7. Government Warehouses
The government warehouses are owned and managed by the government, for example, the seaport storage facilities. Generally, the rates are very affordable. But if the businesses are unable to pay the amount for rent, the government authorities can recover the rent by disposing of their goods.
8. Distribution Centers
A distribution center is a warehouse facility that is usually built with a specific requirement in mind. They are used for temporary storage needs and the items are quickly shifted within the supply chain. The warehouse receives larger inventory and then they are distributed to retailers or resellers within a short time. For example, food and perishable items can be stored and can be distributed within a day. They are affordable for businesses in terms of rent, but the cost varies with the type of item being stored in the warehouse.
Know which warehouse suits your need before you choose
As we have listed the 8 types of warehouses here, you can choose the one that suits your business needs carefully. Picking the right one depends on your business needs, the supply chain, your budget, and the target market. You need to choose the warehouses as per your order fulfillment needs. The best way to ensure that your goods reach the warehouses is by ensuring you have the best order fulfillment services as well as shipping services that help you establish international shipping with no delay.
Further Reading:
- What is a bonded warehouse?
- Why SKUs Are Important to Your eCommerce Store?
- The Effects of Coronavirus on International Shipping
- What’s the Cheapest Way to Ship to China?
- eCommerce Fulfillment: 10 Order Fulfillment Services to Know
- Customs Clearance Process – All you need to Know
- How Much Should You Charge for Shipping and Handling?
