Is your small business growing? You might need more storage space for your products because of the steady customer demand. You do not want to tell a customer that the product they want is out of stock. In such cases, you should have more than enough inventory. One way to solve this problem is to invest in a warehouse. This might be a costly investment but is worth it because of the benefits it gives small businesses.
These are some of the advantages of including investing in a warehouse in your supply chain management strategy.
More Storage Space
Your own warehouse increases your storage space. You can purchase more inventory and store them near your shop, restaurant or company. This reduces wait times between deliveries and allows you to always meet customer demand even during seasonal fluctuations. You can also use the warehouse for office equipment, supplies and other company needs. Declutter your office space and move items to your warehouse. Even if you have your own storage space, you still have to plan the amount of inventory you have to purchase and the delivery schedules so that you don’t overstock.
Reduce Business Expenses
As your small business grows and you reach more customers, you will need more inventory. Your delivery costs will increase because of the number of orders you will need. Your own warehouse allows you to store stock near your shop. This reduces costs and decreases waiting times. You can move items quicker during peak sales seasons.
Opportunities for Expansion
Your supply chain management strategy should include room for expansion. You need to reach more customers; this may mean targeting audiences outside your city or country. Your own warehouse in another city or a rented one in another country, enables your small business to reach a wider audience. The proximity of the warehouse in another location allows you to cut delivery and storage costs, while allowing your company to expand. However, if you plan to buy or rent a warehouse outside your city or country, you have to maintain constant communication with the team managing it. You have to be on the same page when it comes to delivering to customers and quality.
When you have your own warehouse, you can secure your inventory. You will never know the condition of your purchased inventory until it reaches you. You may trust your supplier but things can happen in transit. Spoilage, accidents, theft and others may happen on the way to your store, shop or restaurant. With a warehouse, you can monitor quality regularly.
It takes resources to invest in a warehouse. However, once you do you can spread the risk by sourcing from multiple suppliers. This supply chain management strategy has its advantages and disadvantages. You can determine which supplier offers the best price for the inventory you want to purchase without dropping in quality. Leverage the competing suppliers to get better payment terms. Some of the disadvantages of multiple suppliers is that may spend more and the possibility of miscommunication is higher.
These are just some of the reasons to invest in a warehouse, whether you purchase or rent one. We at Robookkeeper can provide you with affordable small business accounting services. We can do your bookkeeping for you when you decide to invest in a warehouse.