Dry goods丨Three factors to consider when choosing a warehouse location

The location of a warehouse has a huge impact on a company's efficiency and success. This is a major decision that should be carefully considered before deciding on a location.

When choosing a warehouse location, the following three factors must be considered.

1. Proximity to the airport, railway station and port

You can have the biggest and best warehouse in the world, but if you are far away from airports, train stations and ports, it is very difficult for your warehouse to succeed.

Transportation to receive or ship goods from a warehouse needs to be considered in the decision-making process. If most of the goods you store need to be transported by air, then you need to arrange to be as close to the airport as possible. If that's not feasible, then you want to consider locations that have easy access to motorways and roads that connect directly to the airport. This will reduce transportation costs and increase efficiency.

2. Labor availability and labor costs

Geography will determine the types of employees that can be hired and their expected salaries. If you're in a place with a low supply of labor, that's going to drive up wages because those workers will be in high demand and increase operating costs.

One way is to outsource and use companies like 3PLs that collect your shipment, ship it, pack and unload it, etc. This way, you can use your staff when you need them and don't have to worry about their skill level since they are all trained for the job. This is important because if your employees are unskilled, it will lead to lower quality customer service and lower productivity and profits.

3. Rent and utilities

Rent and utility costs can vary widely from location to location, and you have to figure out how much it will cost you to operate your warehouse each month. Sometimes there are hidden costs, so be sure to do your homework. Super cheap rent can come with its own set of headaches, so don't be fooled by the initial low cost.

It doesn't make sense to pay too much rent just to have the "best" location as it will greatly affect profit margins. Essentially, one has to assess whether the cost is worth it, because on the one hand the higher rent is a result of the good location, but whether the location is good enough to increase your income is worth considering.

There is a lot to consider when choosing a warehouse location, however, the three points explored above are critical and should be carefully considered when determining the best warehouse location.