Warehousing is a basic part of any production network. While it’s not the hottest of subjects, warehousing influences everything from effectively overseeing stock to getting orders conveyed to clients on schedule.
What is warehousing?
Warehousing is the act of storing physical goods before they are sold to customers or distributed to other destinations.
Warehouses are necessary because brick-and-mortar stores usually have no room to stock all the goods they could purchase from a wholesaler. Moreover, retailers prefer buying products in small quantities. So their wholesaler has to keep most of the wares in a warehouse before retailers ask for another shipment. As a result, the location of warehouses plays an important role in business logistics. The closer it’s located to a retailer the faster one can deliver the necessary goods and the cheaper it’ll cost.
A warehouse can belong not only to a wholesaler but to a retail chain that has to feed several stores from one or several warehouses depending on their individual needs. However, one can hire a warehousing company to store products.
A warehousing company is a business with substantial warehouse space available for lease. Customers rent as much space as they need for as long as they need it, storing their inventories in secure and climate-controlled environments.
Warehousing – what are your options?
- Private warehouseThis is usually a warehouse owned by a private company including manufacturers, distributors, and retailers. This option gives you full control over the warehousing, equipment, security, and personnel.
- Public warehouseThese objects belong to the government or semi-state entities that lease them out to anyone who has the money.
- Distribution centersWhile standard warehouses are required for keeping the inventory before moving it to stores or customers, distribution centers focus on transportation. Their main goal is to ship the goods as fast as possible and with minimal cost. As a result, they are usually located near transportation hubs.
How warehouses fit into dropshipping operations
It may seem that warehousing has no impact on the dropshipping business since in this case, an entrepreneur doesn’t need to store any products. However, dropshipped goods still come from suppliers. Thus, if a given supplier doesn’t have a warehouse near the city or region where a potential customer lives, this can significantly increase the delivery time, which clients will definitely not like. So, one has to keep that in mind when choosing suppliers.
As for dropshipping from AliExpress, many sellers there own or rent warehouses in European countries and in the US. So if one dropships products to France, for example, they can choose the suppliers who have warehouses nearby.