Profit margins are tight for small and medium businesses these days. Carrying excess inventory only makes it tougher. According to a Ware2Go survey, over 50% of SMBs are seeing shrinking margins, while 68% are adjusting inventory ahead of peak seasons because of overstock and outdated items.
Storing the excess eats into profits in a big way. Warehouse leases are pricey and renting more space to store dusty inventory just isn’t smart. Often, storage costs outweigh any returns from selling the aged goods.
Many SMBs end up liquidating unsold inventory after holidays to free up room for new stock. But for those determined to hold onto excess inventory, redistribution and shared warehousing can help.
Redistributing inventory means moving extra goods from overstocked to understocked locations to balance things out. Getting products where demand is higher bumps up sales and makes storing the items worthwhile.
Shared warehousing lets SMBs rent part of a warehouse at way lower costs than leasing the entire thing themselves. We're talking 30-50% savings, according to Cushman & Wakefield. SMBs also gain access to fulfillment services without running their own warehouse.
E-commerce growth has led to huge demand for affordable, flexible warehouse solutions. Shared warehousing enables businesses to scale up storage as sales grow. Warehouses with customizable spaces and flexible lease terms are perfect for e-commerce.
Shared warehousing also works for companies with seasonal inventory spikes like retailers. You only pay for the space you need during busy periods. Per Statista, nearly 30% of U.S. retail sales happen during the holidays.
Other shared warehouse benefits include:
- Cost-effective fulfillment and shipping
- Warehouse management tech and inventory systems
- Secure facilities and premises
- Lean staffing to reduce overhead
As an operator, focus on customer service and technology. Offer real-time visibility into inventory and orders. Use solutions like Coworks to optimize asset use across locations.
The global shared warehouse market is projected to grow over 18% yearly through 2026 says ResearchAndMarkets.com. Now’s the time to meet growing demand for affordable, flexible space.
Focus on what shared warehousing customers want — and need
It’s more than shelf space and forklifts. When prospective customers review your share warehousing operation, they’ll watch for unique approaches to the services most warehouse businesses will offer.
As you list your features, you’ll want to include the benefits. Here is some reusable copy to help you promote your specific services, where applicable:
FEATURE: Flexible Space
BENEFIT: Scale up or down as your storage needs change. We offer customizable warehouse units to fit your business.
FEATURE: Fulfillment Services
BENEFIT: Let us handle receiving, storing, picking, packing, and shipping your orders for you. Our team of fulfillment experts will become an extension of your business.
FEATURE: Real-Time Reporting
BENEFIT: Gain 24/7 visibility into your inventory levels and orders through our online client portal. Monitor your warehouse operations from anywhere.
FEATURE: EDI Integration
BENEFIT: Seamlessly connect your e-commerce platform or ERP system to our warehouse management software for efficient order processing.
FEATURE: Inventory Management
BENEFIT: Use our expansive warehouse management system tools for forecasting, inventory optimization, and reporting.
FEATURE: Kitting and Assembly
BENEFIT: Have us compile and package custom kits tailored to your unique business needs.
FEATURE: Temperature Controlled Space
BENEFIT: Store climate sensitive goods in our temperature and humidity controlled zones. Maintain product safety and quality.
FEATURE: Premium Security
BENEFIT: Your inventory is secured 24/7 with our state-of-the-art video monitoring, controlled access, and fire protection systems.
Build a shared warehouse community
Shared warehousing can be more than storage. It’s a chance to build a community of entrepreneurs and small businesses that collaborate. Adding coworking aspects creates a sticky member base with true value beyond square footage.
Some community-building amenities to consider:
- Shared office space for on-site work
- Lounges and break areas to network
- Coffee bars and cafes to foster connections
- Event hosting for workshops and speakers
- Wellness areas like yoga studios
- Outdoor space for tenants to enjoy
- Community boards to communicate
- Social events and networking
- Volunteering and community service initiatives
- On-site childcare for working parents
- Mailroom services
The goal is an engaging ecosystem like coworking spaces, not just a transactional landlord-tenant relationship. This builds loyalty and retention.
Differentiate from big retailers entering shared warehousing
Major retailers exploring shared warehousing as a revenue stream poses a threat to independent operators. Retailers have infrastructure and name recognition advantages. But they lack the specialized services and amenities smaller tenants need.
This is where dedicated operators can differentiate by building a true member community. Offer value-adds like office space, lounges, events, and community messaging that facilitate bonding. Provide essential support through fulfillment, inventory management, and order processing.
Retailers will need to partner with logistics firms to integrate tech across their own operations and tenants. But operators should build proprietary systems tailored for flexible use cases.
With large competitors entering the market, staying specialized is key. Nurture an ecosystem designed for small business needs to keep tenants loyal. Invest in amenities and tech that enhances the customer experience.
Differentiation will be crucial as retailers move into shared warehousing. Keep that competitive edge by really understanding customers and offering bespoke services.