There are 8 types of warehouses you should know when looking for warehousing for your eCommerce shop. Learn more about the different types here.
8 Types of Warehouses for eCommerce
For online e-commerce businesses, and eCommerce warehouse does not just provide the storage space but plays an integral role in your order fulfillment process and overall business growth. Having the right eCommerce warehouse can make all the difference in deciding the success or failure of your online business. Therefore, choosing the right one for your business is crucial.
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:
1. Safety and security
2. Well-Trained staff
3. Accessibility and market proximity
4. Appropriate storage capacity
5. Latest mechanical and software tools
6. Properly designed interiors
7. Emergency protocol up to the latest standards
8. Organized pick and pack process
9. Quality check
10. Prompt delivery and customer service
What are the Different 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. Let’s have a quick look at some types of warehouses to consider for your business!
1. Public Warehouses
A public warehouse is a stand-alone company that is owned and operated by a third party. In public warehousing, the pricing is based on the combination of storage fees and inbound and outbound transaction fees.
Public warehouses can be lent for both business and personal use on a short as well as long-term basis. If you’re running an eCommerce shop and want to store your goods for a short period of time, the public warehouse can be the most affordable and accessible option.
2. Private Warehouses
A private warehouse is a warehouse that is privately owned and managed by wholesalers, distributors, or manufacturers and is used for their own business activities. Large retailers and big online firms also have their own privately-owned warehouses.
The private warehouses are more expensive than public warehouses, but 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
Bonded warehouses can be government-owned or privately owned by large firms. A bonded warehouse is a type of warehouse in which bonded goods are stored until the customs duty is paid. The companies storing goods in them don’t have to pay any duties until their items are supplied to the buyer. You can also store restricted items in them until their proper paperwork is done.
Such warehouses are a great choice for importers as they can keep their items duty-free until they find buyers.
4. Smart Warehouses
A smart warehouse is a type of warehouse where the storage, pick and pack order fulfillment process, and inventory management is automated with AI. Automation typically includes everything from software for management to robots and drones performing tasks like packing, weighing, shipping, and storing goods.
Big Corporations like Amazon and Alibaba use huge smart warehouses that make order fulfillment quick and less prone to human error.
5. Consolidated Warehouses
A consolidated warehouse is another type of warehouse that takes pulls together shipments from different suppliers in the same geographical location and combines them together into larger shipments before distributing them to buyers.
Benefits of using Consolidated Warehouse:
- Lower shipping costs for new business and eCommerce shop
- No capital investment required
- Lower inventory levels required
6. Cooperative Warehouses
A cooperative warehouse is owned and operated by cooperative organizations like a farmer or winery co-op. These warehouses can be used by both co-op members and non-co-op to store goods, though co-op members benefit from reduced rates.
7. Government Warehouses
These warehouses are owned and operated by the government bodies, such as seaport storage facilities.
Typically, government warehouses charge fairly affordable prices. However, if a business is unable to pay its rent within the due time, the government has the authority to recover the rent amount by disposing of their goods.
8. Distribution Centers
A distribution center is a storage space that is usually built with specific requirements in mind. This type of 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.
The food and perishable items at the 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.
An eCommerce business that supplies food and perishables items may find that distribution centers might be their best option while an eCommerce business 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 and public warehouses could be their best option.
Warehousing and Fulfillment Services
When you are unsure which warehousing facilities are the correct choice for your company, contact us and let’s set up a call to discuss your projects.