How to Effectively Reduce Warehouse Costs

Owning and managing a business can be a great financial burden, especially if you have to outsource to a warehouse company for any storage, distribution, and fulfillment needs. Online businesses can be especially dependent on outside storage, as many are based out of the owner’s home and can quickly outgrow that space as the business expands.

Since warehouse usage is crucial for the proper management of your business as well as the opportunity for even more growth, here are some strategies designed to keep your storage, distribution, and fulfillment costs as low as possible while still getting the most out of your warehouse facility.

Maximize the potential of your space.

Whether your business only needs a small section of a warehouse or the entire building, the warehouse’s shelving design makes a big difference in the productivity of the space (i.e. how much usable space there is and how efficiently product is able to be shelved or removed).

  • In order to reduce the amount of space needed for your product, make sure the maximum amount of racking is being used while still maintaining safety protocols. This could mean adding platform shelving or a mezzanine to really utilize all the vertical space the warehouse has to offer.
  • Make sure your products are thoughtfully and strictly organized, keeping your best-selling products closer to packing areas and freight entrances. This helps to avoid any misplacement of items and clogging of the distribution process.
  • Use aisle space for storage if possible, but never at the expense of the warehouse employees’ safety and productivity. This greatly depends on whether or not the warehouse is shared between companies as well.

Decrease product handling. The more your warehouse employees need to physically handle a product, the more expensive handling costs will be. You can reduce handling of material by keeping the fastest selling products closest to freight entrances, or even scheduling your shipments so that certain goods can be unloaded from incoming trucks and loaded directly into your distribution vehicles, negating any in-warehouse handling for those materials altogether.

Make sure your labor is efficient. Costs of labor can be one of the most significant warehouse expenses. Creating and encouraging a well-oiled machine when it comes to your employees can end up being a huge financial relief.

  • Don’t skip any steps in the training process, regardless of how simple or complicated the job in question may seem. Make sure every employee has a thorough understanding of their responsibilities, safety protocols, and the company’s values and standards.
  • Reward great work. The first step is creating clear-cut goals for each employee to reach daily, weekly, or even monthly. If certain employees are going above and beyond, make your approval known and offer incentives to other employees for similar effort. Never underestimate the power of a positive and supportive work environment; the better your employee retention, the less time, energy, and money you’ll have to spend on the hiring process, not to mention the boost in productivity that you and your company will enjoy.

For more information, contact the team at Overflo Warehouse at (800) 626-061600 or for a free quote.