Shared Warehousing

Choose Between Dedicated or Shared Warehousing – Which Type of Warehousing Is Right for Your Business

Sep 19, 2022 | industrial space, Warehouse, Warehouse Service

Do you need large-scale business operations or do you need a small setup? Do you have the capacity to invest in maintaining a large warehouse or you can afford only limited space? These are the important questions you must ask to justify the need for either a dedicated warehouse or a shared warehousing in Kolkata. This article discusses various aspects to give cues to business persons for making a better choice in choosing warehouses.  

Scale

If you own a large-scale business, you must opt for dedicated warehousing. Dedicated warehousing can have around 50,000 square ft. Area. This extended area will consist of the manufacturing unit, storage unit, processing unit, and other facilities as required for the business. The warehousing area will be dedicated to your business only and no other businesses will be there to share the space.

In contrast to this, shared warehousing is shared by many businesses. Many small-scale or medium-scale businesses will share some spaces in large warehousing areas based on their need. Through shared warehousing, you will consume exactly the amount of space you need.

Cost

As in dedicated warehousing, only your business will use the space, you will have to bear the cost of operations of the complete space. It will be a fixed cost on monthly basis. And there will be no scope to share the cost with any other businesses. There will not be a considerable variable part. If you fail to make your business profitable, bearing the huge cost can make your business a loss-making venture.

However, in shared warehousing, you will pay a certain fixed cost as the rent of the warehouse space. It includes various variable parts such as electricity, maintenance, water consumption,  resource management, internet cost, and others. Other businesses located in the space share this part of the cost. It will reduce the cost burden on your business. It will offer you scope to pay for the part of resources consumed.

Contract

Many warehouse service providers in Kolkata would offer dedicated warehousing service for 3 to 5 years contract. As the business owners incur high risk in maintaining dedicated warehousing, the contract mostly lasts for a longer period. It helps many businesses to take necessary contingency planning and generate business profits to pay the contract fees and other costs as deemed necessary. The longer period is offered with the expectation to sustain the contract for a prolonged time without any risk.

The shared warehousing contract in Kolkata is for a shorter period in contrast to the dedicated warehousing contract. It lasts for one to three years. After this period, the businesses must renew the contract. If your business is of small to medium scale, you might find it difficult to generate huge profit within three years. But, the cost of renting shared warehousing is considerably low compared to that of dedicated warehousing. So, you will have enough resources to pay the contract fee and continue to access the services.

Flexibility

In contrast to shared warehousing in Kolkata , dedicated warehousing shapes around your need. If your product requires specialization of third-party logistic services such as assembly, kitting, inspection, consolidation, cross-docking, and others, you would demand flexibility availability in dedicated warehousing. It will help you manage the space according to your need. You can modify the spaces to suit your business and operation requirements.

This facility is not available in shared warehousing. The shared warehouse service providers in Kolkata consider the need of every business. It restricts them to favor the requirements of any individual business at the cost of others. Therefore, businesses must follow certain warehouse maintenance norms and accommodate the available facilities.

Therefore the type of warehousing that is right for your business depends on your business requirements, size, scale, cost, and other operational aspects. If you have a plan to expand your business operations in the future, then opt for changing the facility located in the future to meet the requirements.

However, do not risk the huge cost of choosing a dedicated warehousing facility while keeping most of the space idle. The cost will be huge and you might lose operational efficiency. Similarly, if you cannot fit your business operations within a small shared warehousing facility, do not risk your resource capability by adjusting unnecessarily. Choose the right warehousing solutions based on the factors identified above. It will help you to make the right choice.