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Which Is Right for Your Business? All About the Different Types of Warehousing Options

September 27, 2019 warehousing

When you offer products rather than services, you need a storage solution.

After all, those items don’t just materialize on their own. They have to come from somewhere and you may not have the amount of space you need for your storefront to hold onto your excess supply.

Or, maybe you don’t have a physical store because you’ve taken your business online. In that case, you definitely need a home for your products.

This is where a warehouse facility comes in handy (it’s also quite necessary if you’re an online retailer). But what you probably didn’t realize is that there are a few different types of warehousing options that suit different needs.

If you’re in the market for warehousing, then keep reading to learn the options out there and what will best suit your business and storage needs.

The Importance of Warehousing

The demand for many products out there is irregular, meaning that not all consumer-driven goods are consumed daily. However, there is still a need for a supply of these “irregular” goods at hand. This is where warehousing comes in handy.

Another thing to consider is that there are a growing number of online retailers with no physical stores. As you may have guessed already, they’re not storing their products in their garages.

Warehousing provides a central location for receiving, storing and distributing products. They offer advantages for both online retailers as well as physical vendors. One of those advantages is the capability of increasing inventory. 

Whether or not there is a consistent need for the products you offer, you want to be prepared for those times of need. Having a warehouse as an extension of your business will ensure that you will always be able to provide for your customers.

There are Different Types of Warehousing

If you’ve never used a warehousing facility before, you’d be surprised to learn that there are several different types. From a business standpoint, the type of storage space you want comes down to your storage needs and preferences.  

If your needs require receiving, storing, and transferring a high volume of goods, you’ll want to look into a distribution warehouse. This type of warehouse will allow you to receive items from a number of manufacturers and store them temporarily.

If you accept online orders, a consolidated warehouse is ideal. Once items are received in a consolidated warehouse, they are broken down for further distribution.

long term warehouse is what you’ll want if long-term storage is your primary need. These typically fall under the category of private warehousing.

Automated warehouses involve robotic technology that has automated capabilities to assist with product movement. These can range from small warehouses with conveyor belts to three-story facilities with robots handling everything. 

There is also climate-controlled warehousing which suits the needs of storing perishable items like food, or temperature-sensitive items that damage easily with humidity like medications, etc.   

These are just a few examples of the sub-categories of warehousing available to suit individual business’ needs. Apart from these sub-categories, there are about four actual types of warehouses.

1. Private Warehouses

Private warehouses are owned by individual manufacturers, producers, wholesalers, etc. for the use of storing their own goods. This means that the individual owner has a say in the types of warehouse layouts that will fit their storage needs. 

In other words, they’re built to fit the commodities.

For example, farmers will need storage that can keep perishable food items like eggs and produce fresh. And so, their storage facility would be built as cold storage. This will enable the farmer’s company to meet the supply and demand of the food industry.

These types are also referred to as closed warehouses due to their security.

2. Public Warehouses

What is a public warehouse? It’s a warehouse that is licensed by the state. Their methods of operation and their rates are regulated by the government. Although they are under government regulations, they are usually owned by any member of the public.

These types of warehouses serve as independent units to store goods for a fee (or rent). They are mainly constructed via shipping routes, like railroads, main roads and shipping docks. 

These warehouses are more or less a short-term, economical solution.

3. Bonded Warehouses

Bonded warehouses are warehouses that are duly licensed by the government. This means that they can accept imported goods to store. They operate under the supervision and control of customs authorities. 

The types of bonded warehousing include government-owned facilities, privately managed facilities, public bonded warehouses, bonded yards (for stables and corrals), etc. 

One of the advantages for those who utilize this type of warehouse is that they do not have to pay duties on imports upfront. They only pay per quantity removed when it’s ready to be distributed or sold.

4. Co-Operative Warehouses

The co-operative refers to a warehouse or warehouses that are owned collectively by a group. This group acts as members who store their goods for a comparatively low fee. In other words, it’s like a private warehouse, only there are a number of people who utilize it rather than just one business alone.

These are usually used by groups of small farm enterprises who share in production as well as distribution. 

Non-members can also store their goods in these warehouses, but for a much higher fee. 

Which is Right for Your Business?

The types of warehousing out there are not a one-size-fits-all solution. If you plan on joining the world of drop-shipping, you won’t be utilizing a Co-op or dock facility. But you should take the time to view your options to see what is the most cost-effective and accommodating for your storage needs. 

There’s plenty to consider, so in the meantime, don’t hesitate to reach out with any questions or concerns. We’ll be more than happy to tell you all about the services that we provide. Or, just fill out some quick information to get a free quote today!