When there are many companies on the market and the competition is really strong, the company's profitability and its position depend on many, sometimes seemingly insignificant factors. Sales carried out stationary and via the Internet have a common denominator in the form of storage of goods. Properly planned operation of the storage point, as well as minimizing any losses are crucial.

In our article, we explain what storage costs are, what affects their amount and where you can look for potential savings.

What are storage costs?

The maintenance of an efficiently functioning warehouse consists of many different elements:

  • usable area, i.e. the costs of renting or construction, financing (capital intended for making a warehouse investment), various types of repairs, maintenance of the facility or its extension, insurance covering the building, as well as equipment, employee remuneration and stored goods and taxes, e.g. on real estate;
  • costs of warehouse equipment, i.e. fees related to: the use of reloading devices and other necessary tools (e.g. used for order picking and packing shipments), a storage system (industrial shelves), warehouse management (it is not a tangible item, but it is necessary for the proper functioning of composition and requires capital expenditure);
  • administrative costs, employee salaries, expenses for work clothes, benefits and wage benefits;
  • storage of goods, i.e. costs of storage, insurance and utilities, such as electricity, water, heating, Internet and cleaning services;
  • warehouse errors - this group of costs is generated by mistakes that occur in warehousing processes. These can include shortages in reserves, damage to products during handling, non-compliance with the inventory status, which may be the result of, for example, theft or an error during inventory, and aging of goods.

Factors influencing storage costs

Storage costs are influenced by such elements as:

  • number of stored products and references,
  • type, size and characteristics of loads (some goods require special solutions, e.g. in the form of cantilever racks),
  • seasonality and demand - sudden demand for a given product may cause problems with handling a large number of orders,
  • completing orders,
  • warehouse location - the price of a building located close to urban areas or areas with distribution centers will be higher.

How to reduce storage costs?

The storage of goods is quite an expensive procedure, while the analysis and optimization of individual elements that make up the final price can have a positive impact on reducing costs. Here are some ways.

Reduction in the amount of space needed

The size of the warehouse space is one of the main factors influencing the monthly costs associated with the storage of goods. When choosing a warehouse, especially when it comes to renting, planning plays a key role. It should be precisely determined how much space is needed. For this purpose, not only the products should be taken into account, but also the dimensions of the equipment that will be used in the daily operation of the warehouse. This will help you determine the optimal passage widths. Racks for storing goods are also important. The higher and narrower, the more efficiently the storage area is used. When choosing them, however, one should remember about safety issues - they should be adjusted to the dimensions of the stored products and their weight.

Securing the goods

The products stored there are the greatest value of a warehouse. Many companies suffer major losses every year due to theft or damage. A lot of damage is also the result of the wrong placement of individual goods. In order to prevent this, it is worth taking care of appropriate packaging and in-warehouse transport procedures and implementing them already at the planning stage, before the actual start of the warehouse operation. It is also advisable to emphasize cyclical training of employees, because they have direct contact with the goods.

Due to the large amount of valuable goods, warehouses are quite often the target of thieves. In order to minimize the associated risk, it is worth investing in a warehouse monitoring system and an alarm system, combined with a rapid response group. You can also hire a guardian.

Used containers and pallets

The cost of storing one pallet, i.e. renting a pallet space, can be up to PLN 100. There is nothing the trader can do about it. However, the costs associated with the storage of goods can be reduced by purchasing used pallets and containers. Usually, they have only slight damage that does not prevent their reuse, and their price is lower than new ones - they allow you to reduce costs by up to 40%.

Cross-docking system

Cross-docking is an assortment management system consisting in the processing of large, uniform batches of goods into various packages, tailored to the current needs of customers. This is a great way to reduce the storage space needed, but also to shorten the delivery time. This is especially important from the perspective of companies operating in the e-commerce sector.

Saving light and heat energy

The costs associated with lighting and heating the warehouse space can be reduced in several ways. When renting or purchasing a warehouse, the following factors should be considered:

  • building insulation (a good solution is to use a sealing curtain at the reloading front, which will fill the gap between the warehouse wall and the semi-trailer with the goods, thus protecting the warehouse against heat loss),
  • automatic lighting system,
  • the possibility of illuminating the warehouse with natural light (checking the number of windows or skylights),
  • type of taps and toilets used (it is good to bet on those with low water consumption).

Appropriate inventory management

The ill-considered purchase of too many goods increases the storage costs. There may also be problems with the system of judging them for suitability. As a result, products that will never be sold or otherwise used remain in stock, and the company incurs the costs associated with their storage. Stocks should remain at the level necessary for the efficient fulfillment of incoming orders.

Outsourcing

Both in terms of warehousing and distribution, efficient outsourcing can reduce costs. Outsourcing the goods to an external company allows you to avoid fees related to the maintenance of the facility, hiring staff and warehouse works. The entrepreneur pays only for the space rented by him. Many such companies also offer their customers order management in the online store. Full logistic service may include the purchase and storage of goods, their transport, invoicing or handling complaints. The effect of such a solution is a smaller number of intermediaries, thus shortening the supply chain and reducing costs.

Centralization of warehouses

A good option that can generate significant savings is to rent or purchase one larger warehouse, instead of a few or even a dozen smaller ones. A limited number of warehouses will be more profitable to maintain than managing a large number of facilities located in different places.