Small Business Tips for Selecting a Warehouse for Your Products

bigstockphoto_Truck_At_Loading_Bay_5248340The Start Up Dilemma: Your invention is coming to fruition. Your products are being manufactured. But, you aren’t sure where to store them.

The Sudden Expansion Dilemma: Finally, after too many years of recession, your business is growing again. More and more orders are coming in. But, your storage capacity can’t keep up.

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The dilemma of where to store merchandise between the time it leaves the manufacturer and the customers place orders for it is not a new one, and it comes in all shapes and sizes, as the two examples above illustrate.

You can always store your merchandise within your own facilities but in considering that option, remember to think through the space and security limitations of your facilities, as well as your capacity to handle complete fulfillment and distribution of your products.

If you rule out storing some or all of your merchandise at your own facilities, then you’ll need to turn to a third party logistics (3PL) provider experienced in warehousing. There are many providers out there, so how do you tell which one is the right one for your small business and your particular merchandise? You can start to answer that question by taking these three important steps with any 3PL you are seriously interested in doing business with.

1. Ask the Warehouse provider some important questions: Get specific. If this company is going to be handling your merchandise, you have a right to ask them how they will go about ensuring its continual safety and help you cost effectively and safely get it into the hands of your customers. Here are some sample questions to ask the 3PL:

About space…

  • What is the square footage of their warehouse? And specifically how much space does it have available for your merchandise?
  • How will your merchandise be stored in their warehouse?
  • How is the warehouse secured, both the physical and the technical facilities?

For goods coming into U.S. ports from overseas factories…

  • Does the 3PL have experience with customs and port authority processes?
  • How close is the warehouse to international ports?
  • How close is the warehouse to other modes of transportation, i.e. trucking, rail and flight carriers?

Concerning Fulfillment…

  • What type of Inventory Management and Control system does the 3PL use?
  • Can their Warehouse Management System (WMS) integrate with your e-commerce website?
  • Does the 3PL offer any type of Customer Service Representation?

About Shipping…

  • What carriers does the 3PL have relationships with? Is it multiple carriers or just one?
  • How quickly can the 3PL get your products to your customers?

2. Visit the Warehouse provider: If you are satisfied with the answers to your questions then you can move to the next phase – a warehouse visit. It is always good to see the warehouse in person if possible. This not only gives you a first hand look at the size and security set up of the warehouse but it also gives you a chance to meet the staff who will be handling your merchandise. If a personal visit isn’t possible, ask for a virtual tour of sorts. Have the 3PL provide you with photos of their warehouse and any other information that helps you understand their policies and procedures for safely storing and distributing your merchandise.

3. Request a bid for services: If you are still interested in the 3PL after the two exercises above, then request a bid for their services. Ask them to be thorough and specific, which includes details about storage fees, distribution processes and shipping options.

Next week we will go into more depth about selecting a 3PL that can handle your fulfillment and customer representation needs. In the meantime, happy National Small Business Week.