Jewellery, furniture, food, electronics… business warehousing needs can vary wildly. If your business has outgrown the lounge room or garage, ask yourself these critical questions to identify the warehouse features you need.

Could a warehousing solution be the next step for your business? We asked Greg Woods and Glyn Powell
from Australia Post’s sales and marketing team for their
expert advice.

1. Why do I need a warehouse?

If you sell large products like furniture, space may be an issue, but Greg Woods says the number-one concern for smaller businesses is usually time. “In many cases, a business owner starts a business while still working full-time,” he says. “As the business grows, it becomes more time consuming. That’s when you have to decide how your time is best spent – on order fulfilment or on creating more sales.”

2. What are some signs that I need a warehousing solution?

According to Glyn Powell, a growing number of orders and more stock-keeping units (SKUs) make order fulfilment, tracking and reporting increasingly complex. “Most business owners know when they’ve reached that tipping point and need to outsource stock storage and management,” he says.

3. What kind of features should I look for in a third-party logistics supplier (3PL)?

As a starting point, Woods says that you might look to the location of the warehouse and what kind of SKUs they already manage. “Some 3PLs offer solutions for small businesses right up to large enterprises,” he says. “They might offer temperature controlled storage, container de-stuffing and more.”

4. How involved do I have to be in managing stock in a warehouse?

Most 3PLs offer to manage most of the functions relating to stock – receiving deliveries, fulfilling orders and reporting on stock levels and sales. Some will even manage your e-commerce website, including photographing products and uploading the images! “There is a fee for these services,” explains Woods, “and it depends how hands-on you want to be. If you want to retain more involvement in the stock functions, you can order the stock and the 3PL will simply take delivery of the order.”

5. How long do I have to commit to a 3PL?

“Some 3PLs offer more casual, ad hoc warehousing arrangements,
if you aren’t willing to commit to a longer-term contract,” says
Powell. However, the set-up costs are usually the main expense in warehousing, so you might pay more for an ad hoc arrangement
since the 3PL won’t be able to recoup these costs over the period of
a contract.

6. What other factors affect the costs?

The size and number of SKUs you are storing, special storage requirements such as hanging garments, stock turn and activity
(how many orders you fulfil in a day / month) will all be reflected in the warehousing costs.

7. What are the benefits?

“It’s difficult to express the benefits in simple monetary terms, like $1 per product,” says Woods. “The value of outsourcing some or all of your warehouse and stock-management functions lies in reclaiming time that you can use to grow your business.

“There’s also the element of expertise: a 3PL’s turnaround time is usually quicker and you will have service-level agreements (SLAs) in place so you can check that customer-satisfaction levels are where you want them to be.”

8. Does Australia Post offer warehousing solutions?

Australia Post doesn’t offer warehousing or logistics services. However, the organisation works with many 3PLs and has a list of warehouse solutions suppliers it has vetted and can recommend.

“There’s no business arrangement with any 3PLs,” says Woods. “This is simply something we offer as a service to our business customers. If you chat to your Australia Post account manager about your warehousing needs, we can come back to you with some suppliers that fit the bill.”

The views expressed in this article are those of the author and the interviewees, and not of Australia Post.

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