The Benefits of Warehouses in 2021

What is a Warehouse?

A warehouse is defined as a place where products are kept before being distributed or delivered to customers. Warehouses are used by manufacturers, exporters, importers, retailers, and other business owners who are dealing with the supply of various goods.  The demand for warehouses has been high all the time because of how necessary they are for smooth and seamless trading processes. The world’s most popular warehouses include Tesla Gigafactory 1, Boeing Everett Factory, and Amazon MQY1 Fulfilment Center.

Perks of Having a Warehouse

Owning a warehouse comes with numerous advantages. Whether you are a small business taking your first steps in the market or an already established one, having a warehouse will not only save you from various probable losses but will also bring you some significant benefits. Let’s explore some of them. 

Storage of Raw Materials for Production

Warehouses most usually serve as a storage of raw materials for manufacturers. They purchase the needed materials for the goods they are going to produce, and most of the time they need some space for storing them as the regular office area does not allow them to organize the materials neatly and accordingly. 

Centralized Storage Location

A warehouse can become a great intermediary between the processes of receiving, storing, and delivering the goods to customers. By locating a warehouse in a strategically chosen place, you as a product owner will be able to save a reasonable amount of money and time by making the process of receiving, storing, and distributing the product easier and simpler.

Namely, if you choose a warehouse located in the city center, the product delivery process will become more seamless and will be possible to complete by spending less amount of money on transportation and less amount of time on the process. Therefore, a warehouse can accelerate the development of your business by turning it into a centralized location for your storage. 

Price Stabilization and Storage for Surplus Goods 

When setting up a business, one constantly tries their best to avoid losses and to be as strategic as possible. Nonetheless, it is by no means feasible to always correctly anticipate the probable demand fluctuations. Especially when you are producing something specific, seasonal, or with a narrowly targeted buyer segment, chances are high you may face a significant fall in demand for your product at least once or twice during your business life. This might be caused by the changes in customer interests, the competitive advantage taken by a rival, the customer income changes, etc. In this case, a warehouse will serve you for storing the goods that have a lower demand at the moment and putting them back on sale once their demand increases. Not only do you avoid big losses, but also gain full control over the timeline of the sale of your products. 

Improved Customer Service 

Having a warehouse makes the entire delivery process faster and more efficient. Most businesses anticipate the further demand for their products based on past experience. As a result, they produce and store those products in the warehouse. When orders for those goods come in, the business starts delivering them right from the warehouse already produced and prepared for sale. This saves time for the producers and improves the customer experience by delivering their orders earlier and faster. 

Packing and Grading 

Modern warehouses are designed with the necessary facilities and equipment to process the goods accordingly for them to meet the customer needs. Various types of goods need special conditions to be maintained until out for sale. The warehouses enable grading, freezing, blending, and packing to appropriately prepare the goods for sale. 
 

Risk Management 

The mentioned conditions provided by the warehouse through the facilities it has, such as a refrigerator, a blender, a grinder, and much more, not only help to maintain the goods in the proper state before distributing or delivering them but also minimize the risk for the business to suffer big financial losses. In particular, a warehouse enables businesses to minimize the risk of suffering damage, theft, fire, etc. 

Warehouses and the Covid-19

Covid-19, also known as one of the strongest scenario changes in the past two years, has brought abrupt changes not only to the fields of healthcare and medicine but also to the world of economics, various industries, labor market, and more. 

Throwing a quick glimpse into the benefits of owning a warehouse enables one to effortlessly foresee the huge increase of the demand in warehouse space noted during the past two years. 

The quarantine, the closure of big and small stores, restaurants, and other services strictly limited people’s access to their daily, work, and weekend habits. No shopping, no gym, and no cinema. All people got to do was maximize their comfort at home by immediately shifting to an online lifestyle. 

Here is when online shopping took a huge leap by enabling  e-commerce giants to grow further while many stores and retail locations were suffering losses. 

Naturally, the more online shopping was being done, the more orders were being recorded. To store, pack and deliver those orders properly, a bigger number of warehouses were in need. 

The world’s top e-commerce platform, Amazon, tripled its budget since the start of the pandemic by expanding in size and services. 250k more employees were hired to conduct the work process in warehouses and out of it. The company equipped its warehouses with special social distancing technologies, provided thermal screening and on-site covid testing in every warehouse. Take for example one of Amazon’s warehouses which had 4 floors and was equivalent to 15 football fields in size. Before the pandemic, there were 3,000 workers employed there. Since the start of Covid-19, the warehouse has hired 1,000 more employees. 

Delivering on average 1.6 million packages a day, Amazon would have been unable to manage its business without the 175+ warehouses it has in use. 

Warehouses in 2021

As of late, Covid-19 seems to be gradually becoming a solvable issue through vaccinations, social distancing, mask mandates, and other strategies implemented by the WHO and world governments. Life seems to be slowly moving back to normal. Restaurants and shops have reopened in most countries, flights are taking place to and from different destinations, etc. Nonetheless, Covid-19 served as a hint for many retailers and business owners to shift many of their operations and processes online by saving resources such as time, money, etc. Online shopping became more popular, too. Many people who were more conservatively sticking to visiting the stores have learned the advantages of ordering online, and prefer the latter now. Thus, warehouses have become even more popular in 2021.

The more online orders are recorded, the bigger number of warehouses are needed to store the already produced goods and ship them for delivery when ordered. 

Final Thoughts 

To conclude, warehouses have always been used as essential components for the trading process. The faster the business develops, the greater the need of owning a warehouse becomes. Nowadays, when online shopping has progressed to a dominant trend, companies are even more inclined to acquire warehouses for their business.