Detailed Guide to Buying Warehouse Space

6 November 2019

Purchasing a warehouse space is not an easy decision. It’s not like you can just go out there, find a big ol’ warehouse and close the deal. We’re not saying it’s impossible to do so, just that a bit of thought needs to go into this decision if you want it to truly benefit your business.

For those companies that rely on the purchase and selling of immense amounts of inventory, adequate storage conditions can help keep merchandise in good condition, ensure that deliveries are as efficient as possible, and even guarantee that operations can scale well in medium to long term forecasts.

What Space Are You Working With?

Space is one of those go-to variables managers rely on when comparing various warehouses for purchase. Although it’s not necessarily the most important one, it can make a world of difference if you can use it appropriately. One thing people usually overlook when it comes to storage measurements is cubic space.

Cubic space is the amount of practically available space that your potential warehouse(s) offers. This means multiplying length by width by height. However, these computations cannot be made with the actual, advertised height. Instead, the clear height is used to get a better measurement. The difference is crucial and, while some leasers might include the latter, not all of them do.

Clear height is the actual, compliant vertical space you can use to store things. It’s a bit smaller than actual height, because it takes into account the existence of ventilators, light fixtures, and other systems attached to the warehouse ceiling.

While you’re measuring cubic space, you should also estimate how tall your racks need to be in order to fill it. This is another crucial aspect that is often overlooked – you may be able to store 36 ft. high, but can the floor take the additional load of such a high-density system? 8 Inches of slab concrete are usually necessary for storing 6-7 pallets high. If you don’t have that solid recommended foundation, the upgrade will come out of your pockets.

Can You Optimize?

Before comparing several potential warehouses, you ought to have a layout design already in mind. It might take a while to get this done, but knowing exactly how much you need for your offices, receiving and shipping areas, open workflows, packaging tables, shipping stations, racking frameworks, as well as machinery (carts/forklifts/etc.) will save you a great deal of trouble.

Then, try to run simulations based on the distances between each of the workflow areas. If you can’t locate, slot, and replenish inventory with appropriate speed or, ideally, faster than before, then your company will likely lose money once you’re settled in this warehouse facility. These three operations are the backbone of any retail business, so if you can’t do them right, the entire organization will suffer.

Once you have all of this established, you need to think of the flexibility and scalability of the layout design you have in mind once it’s implemented. Does the warehouse space allow for expansion or redesign in case you need to extend or cut operations? From the racking system to the way in which you utilize space with your current operations, it’s better to leave good margins in order to account for unknown future plans and/or changes.

It might not seem like the most important thing when you’re looking to get things up and running, but having the possibility to change things around as you go will save you ridiculous amounts in expenses. Just think of how much you could save by not having to purchase another warehouse and, instead, being able to increase the storage density of the one(s) you already own.

Flow Reigns Supreme

Finally, if the storage facility gives you enough room to perform each and every warehouse level activity without obstacles or interruptions, then you’re likely looking at a great option. As you already know, any delay(s) or congestion(s) in one operation can easily impact other areas as well.

Furthermore, you’ll want to prioritize those options that help you cut down on walking time as much as possible. The importance of this cannot be overstated, especially when you’re buying a warehouse space. Statistics show that more than half of total paid labor time is comprised of walking. Reducing this will not only cut down on your costs, but also help your employees feel less fatigued.