Industrial Co-Warehousing and Redistributing Excess Inventory

Warehousing can benefit e-commerce businesses of all sizes. E-commerce merchants who have decided to hold onto inventory may find it beneficial to use two types of warehousing strategies: redistributing their inventory and using an industrial co-warehousing space.

Larger e-commerce merchants can afford to hold onto excess inventory until consumer demand improves, but small to medium size businesses that lease warehousing space may find this strategy cost-ineffective. In a recent survey, over half of the SMB’s reported shrinking margins and excess inventory, and investing in additional warehousing space would be harmful to their already tight margins. A lot companies are choosing to liquidate unsold inventory after the holidays to free up warehouse space for new inventory.

Redistributing inventory involves moving excess inventory out of warehouse hotspots to cooler warehouse locations. This move allows ecommerce merchants to keep their relevant SKUs in key geographical locations without breaking the bank with much lower warehousing costs for storing deprioritized inventory. Seasonal inventory, for example, would make sense to store in warehouses in warmer states such as Arizona. This strategy saves business owners money on lower shipping costs and faster shipping to their customers.

Industrial co-warehousing, much like Cubework for example, is a proven practice among smaller e-commerce merchants but has shown to increase among merchants of all sizes. This strategy involves distributing inventory across the country through co-warehousing. As consumers prioritize fast and free shipping, distributed warehousing will be key to meet these demands. This creates an opportunity for large retailers with extra warehouse space to lease their space to smaller merchants, generating a new revenue stream.

While new studies and reports suggest a cooling warehouse market, surplus inventory across small and large e-commerce merchants shows a new complexity in the warehousing game. Collaborative warehousing solutions like redistributing inventory and co-warehousing will continue to meet customer expectations and business needs.

 Cubework.com, Inc.