Why Consider Warehousing As a Service in This Competitive World?
Over the last many years, supply chain optimization and innovation have transformed retailers’ potential and ability to respond to fluctuations in pricing, demand and customer expectations- except in one significant area: warehousing. Where other aspects of the logistics model are responsive and agile, retailers are still constrained by five and ten year warehouse leases.
Owing to an exceptional flexibility achieved through other parts of an intelligently optimized supply chain, the inflexibility of warehouse deals have become starker. Retailers can respond quickly to changes in demand, exchange rates and market opportunity by adapting logistics routes- yet the operations related to warehouse are still fixed. The outcome can be enormous swathes of expensive and empty space; or business opportunities that cannot be grasped largely due to limited available space.
This particular flexibility within warehousing is clearly different from the flexibility business models have adopted in other areas of residential and commercial property. From short shop leases to ‘pay by desk’ office space, the way organizations can use property has changed, dramatically. Therefore, it’s the time to apply the same thinking to warehouse market.
Take warehousing as a service. This new and innovative solution is revolutionizing the way in which you, being a retailer, consider warehousing space. The service essentially matches retailers’ demands to unoccupied space and, from location, duration and size, the whole process is completely flexible- a retailer pledge as little as 30 days and payment is on demand, on the basis of ‘pay as you go’. When it comes to storage, this model also gives access to many other warehousing services.
This entire approach radically transforms the speed with which you can access new warehouse space. Away from a hectic year spent locating and negotiating a new lease, you can locate, secure and move into a warehouse within a week or so. By fixing a maximum or minimum requirement, you can scale up and down the cost of the space- and supportive logistics services- as needed, in response to customer demand, seasonality and other factors. The business is not only agile but also costs are directly proportional to sales in every domain of operation.
What about trialing new markets and products? Apart from lengthy research projects, why don’t you think of signing up for a small warehouse space in new location for a month and try some new products on the ground? The concept you want can be in the market within days, rather than months and the upfront investment is very minimal. If it works and market fit is achieved then you can start thinking about scaling up; if not, you can easily try something else or begin with a new idea.
In an Amazon dominated retail world, the logistics model’s fluidity and dynamism is turning out to be a critical aspect of success, underpinned by a flurry of ‘pay as you go’ offerings and delivery times becoming shorter every day. Warehousing shouldn’t be different- especially in an environment when pace of change is affecting retailers globally.