To the average person, a warehouse is a warehouse. However, there are actually many types of warehouses out there that differ in significant ways!
For online businesses, eCommerce warehousing is not just storage space but also an integral part of order fulfillment. Having the right eCommerce warehouse can be the key to making or breaking your success as an online business. Therefore, choosing the right one for your business is crucial.
For eCommerce startups and SMBs, a warehouse is all the more important as many don’t have large, physical storage spaces to utilize. But you just ordered a huge stock as you found it at a good price or the holiday season is coming soon. So, what to do now?
You need some eCommerce warehousing, stat! Before diving headfirst in without a plan, it’s very important to take a closer look at the different types of warehouses available to decide which one works best for your business!
Warehouse Qualities to Look For
Different types of warehouses set themselves apart in their own unique ways. However, there are some general characteristics that an efficient and safe warehouse should have. These include:
- Safety and security
- Trained staff
- Accessibility and market proximity
- Appropriate storage space
- Latest mechanical appliances
- Properly designed interiors
- Emergency protocol up to the latest standards
- Organized picking and receiving processes
- Quality check
- Updated software
- Prompt delivery and customer service
What are the Types of Warehouses?
eCommerce warehousing is very important if you’re planning to sell online cross-border, especially if your company is growing quickly and running out of room to store your inventory efficiently. Here’s a quick look at some types of warehouses to consider!
1. Public Warehouses
Public warehouses are owned by governmental bodies and made available to private sector companies.
Public warehouses can be lent for both business and personal use. If you’re an SMB owner and want to store your goods for a short period of time, a public warehouse can be a great option.
Although typically not that advanced technologically, they’re generally the most affordable and accessible option and thus a solid choice for eCommerce startups and SMBs.
2. Private Warehouses
A private warehouse is a warehouse which is privately owned by wholesalers, distributors or manufacturers. Large retail and online marketplaces also have their own privately-owned warehouses.
Although generally more expensive than public warehouses, private warehouses can still be a great option for eCommerce SMBs if they need a major, long-term strategic presence in an important region.
3. Bonded Warehouses
A bonded warehouse is a type of warehouse that can store imported goods before customs duties are required to be paid on them. Authorities give companies using them bonds when they rent space with them to ensure they don’t face monetary loss at the time their products are released.
Plus, companies storing goods in them don't have to pay any duties until their items are released. You can also store restricted items in them until their proper paperwork is complete. A bonded warehouse also offers facilities to store items for extended periods of time.
Such warehouses are perfect for importers as they can keep their items duty-free until they find buyers. They also have reputations as secure and safe storage spaces for goods, making them ideal for eCommerce businesses that specialize in cross-border training.
4. Smart Warehouses
A smart warehouse is a type of warehouse where the storage, fulfillment process and management is automated with AI. Automation typically includes everything from software for management to robots and drones performing tasks like packing, weighing, transporting and storing goods.
Corporations like Amazon and Alibaba use huge smart warehouses that make the order fulfillment quick and less prone to human error.
5. Consolidated Warehouses
A consolidated warehouse is another type of warehouse that takes small shipments from different suppliers and groups them together into larger shipments before distributing them to buyers. The catch is that all the shipments are intended for the same geographical location.
Overall, though, consolidated warehouses are a very economical way of order fulfillment, especially for small businesses and new startups. The capital investment and volume of inventory required to use consolidated warehouses are fairly small too, making them a great option for eCommerce SMBs just getting off the ground.
6. Cooperative Warehouses
A cooperative warehouse is a warehouse which is owned and run by cooperative organizations like a farmer or winery co-op. Both co-op members and those outside the co-op can store goods at these facilities, though co-op members benefit from reduced rates.
7. Government Warehouses
These warehouses are directly owned and controlled by the government, such as seaport storage facilities.
Typically, government warehouses charge fairly affordable rates. However, if a business is unable to pay their rent within the due time, the government has the authority to recover their rent by disposing of their goods.
8. Distribution Centers
A distribution center is a storage space which is usually built with specific requirements in mind.
The storage is used for temporary needs and items are shifted quickly within the supply chain. A large inventory is received and distributed to resellers and retailers within a short period of time.
In the case of some food and perishable items, distribution centers items are often distributed within a day. Generally, distribution centers are affordable to rent in and can vary greatly depending on what types of products are being stored in them.
Types of Warehouses: Know Which One is Best for Your Business
There are many types of warehouses available and each has its own purpose. Picking a suitable one depends on your specific business needs, supply chain, target market, budget and the like.
For example, an eCommerce business that sells food may find that distribution centers might be their best option while SMBs engaged in frequent, large volume cross-border trade may find that bonded warehouses work best for them. For eCommerce startups and small companies just getting started, consolidated warehouses could be their best bet.
Easyship partners with warehouses throughout the world to provide more efficient and affordable order fulfillment. Our warehousing and fulfillment guide is a great resource to discover more effective ways for storing and fulfilling inventory orders.
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