What’s the first thing that comes to mind when you hear the term ‘warehouse’?

Godown? Dark walls? Unmanaged operations? Storage room? Overstuffed merchandise?

Well, that was the 90’s—That's not the concept of a warehouse anymore. Google the word ‘warehouse’, and you will come across hundreds of images showcasing the evolution of warehouses over the years.

In this age of eCommerce growth and automation, the notion of the warehouse has taken a 180-degree turn.

This blog highlights the modern-day warehouse's fresh approach, functionalities and efficiencies. Let’s familiarise you with different types of warehouses to help you find the right one for your business.

11 Warehouse Types With Pros And Cons

To give you a clearer picture of different warehouses, Prime Associates explains each type of warehouse's concept, characteristics, functionality and pros and cons. Let’s start!

01. Public warehouse

A public warehouse is owned by an individual or a large corporation and is rented to the public for personal or business use.

Small and medium-scale companies usually use such public warehouses to operate their business. Due to their affordability, many new or growing companies rent public warehouses to fulfil their short or long-term storage needs.

Moreover, all public warehouses must adhere to the rules and be fully licensed to operate. The rent is usually charged per square foot or pallet cost basis.

Pros:

• Ideal for short-term storage needs.

• Great for seasonal businesses.

• An affordable option for new and upcoming businesses.

Cons:

• Not as technologically advanced as a private warehouse.

• The public warehouse may not be accessible all the time.

• Lesser control over square footage and floor plan.

02. Private warehouse

As the name suggests, the private warehouse is owned by big retail corporations, distributors, manufacturers, and wholesalers who require big space for their business activities.

Private warehouses are an ideal option for businesses that can afford to run and maintain the warehouse with the help of experts. Such a warehouse requires a large investment for securing the building, facilities management, maintenance, and security.

It may be more expensive compared to the public warehouse, but a private warehouse is an effective choice for small and medium e-commerce businesses in the long run.

Pros:

• More control over the building facilities

• It can be designed and remodelled to fit the company’s requirements

• Can also be rented instead of purchased

• Reduced errors, increase in efficiency

• More technologically advanced than public warehouse

Cons:

• Expensive to manage the warehouse

• Return rates can be lower

• Tax issues

• Complicated to manage private warehouse

03. Bonded or Custom Warehouse

Bonded warehouses are constructed to store imported goods that require import duty payments to be made.

The government or private agencies own such warehouses. Any private agency running a bonded warehouse is liable to obtain a license from the government before commencing its operations.

Such warehouses are usually close to borders, airports, and ports. Ideal for companies engaging in cross-border business, the proprietor is not liable to pay the duty until he wants the goods to be released. In these warehouses, there are two types of taxes to take into account: import duty and excise duty.

Pros:

• Business does not need to pay until the products need to be released.

• Bonded warehouses offer versatile facilities.

• Best option for companies dealing in international trade

Cons:

• All the products should be removed, and duty paid off within two years.

• Tedious clearing process

• Storage is only allowed for taxable goods.

04. Consolidated Warehouse

A Warehouse that receives smaller shipments from different suppliers and sellers can be termed a consolidated warehouse.

Consolidated warehouses group the products into bigger shipments before delivering them to the buyers. Such warehouse procedures ensure all the consolidated products are sent to the same location.

A suitable option for small and medium-scale businesses, the consolidated warehouse is economical for order fulfilment. As the inventory and capital requirement is minimum, e-commerce companies of all sizes avail its benefits with ease.

Pros:

• Budget-friendly and time-saving solution

• No need for large inventory

• Does not require higher investment

• Better allocation of resources

Cons:

• Shipping delays

• Complicated inventory handling

• Fulfilment inaccuracies

• Rush delivery incurs a high cost

05. Government Warehouse

The government owns, manages, and controls these warehouses as the name implies.

Primarily, the main objective of the government warehouse is to store the products and goods of the national government. However, private individuals and businesses can also rent the warehouse.

Any individual or company renting a government warehouse is subject to the charges and rents mentioned by the government. If the person/business renting the warehouse fails to pay the rent, the government warehouse reserves the right to seize all the products. The government warehouses are as well as secure and fire-proof.

Pros:

• Lower rental rates

• well-managed, clean, and regulated,

• The government overlooks warehouse management

• Secure and equipped for disaster

Cons:

• Default in rent payment may lead to seizing of goods

• The renter must adhere to all the government regulations

• Can only store products the government allows

06. Cold-storage or Temperature-controlled Warehouse

Cold storage AKA temperature-controlled warehouses are built to store products that require extra care. It has regulated environmental conditions to keep the inventory safe.

Many companies, including pharmaceuticals, chemical and processing, retail food, and companies dealing in fresh produce, artworks, cosmetics, candles, and plants, avail of temperature-controlled warehouses for storing their products.

Whereas cold storage warehouses specialize in deep freezing the products for a long period of time. Despite their similar appearances, these warehouses have very different features and functions.

If your company deals with perishable items or your products require special attention, then cold storage or temperature-controlled warehouses are the right options for your business.

Pros:

• Protects the products from getting damaged

• Protects the goods from the sun and temperature fluctuation

• Ensures a dust-free environment

Cons:

• It is much more expensive compared to a normal warehouse

• Maintaining the right temperature is crucial to keep the products safe

• Difficult to find such warehouses in remote locations

07. Smart Warehouse

With the advancement in technology, warehouses are evolving to suit the business's requirements in the best way possible, one of its examples being the smart warehouse.

The smart warehouse automates business operations that were previously performed by humans. From storage and order fulfilment to management, machines carry out every activity using AI and require minimal manual supervision.

Due to the rising popularity, many big companies like Amazon and Alibaba use smart warehouses to carry out their warehouse activities.

Pros:

• Operating costs are really high

• Reduced inventory errors, increased productivity

• Automated storage and retrieval system

Cons:

• Much costlier than other types of warehouses

• High capital requirement

• Vulnerable to computer malfunctions or blackouts

08. Distribution Centre

Distribution centres are built specifically to facilitate the exchange between inbound and outbound and are one of the final stages of the supply chain.

Such warehouses are an important link between the suppliers and the customers. Distribution centres are handy for short-term storage of goods; some of the products even stay for less than a day.

A distribution centre is not only used for storage but also holds great practicality for distribution, order fulfilment, and preparing orders. The facilities at distribution are premium, and the prices are more affordable than you might expect.

Pros:

• Reduces delivery time

• Reduces delivery costs

• Increases efficiency

• Can store large quantities of products

Cons:

• Risk of misallocation

• Higher operating expenses

• Inventory management becomes complicated

09. Cross-dock Warehouse

Cross-dock warehouse? Sounds new and interesting?

Cross-dock warehouses are the middle link between cargo carriers and their destinations. Such warehouses undertake the transferring of goods-

• Unloading the goods from a truck or other transportation source,

• Sorting the products

• And reloading them into outbound trucks to continue their journey of dropping the goods at one specific location.

In the cross-dock warehouse, the staff sorts out the cargo and loads them from one truck to another to be delivered to one site. And the result? It not only reduces the risk of damage but also reduces the delivery cost.

Cross-docking solutions ensure that customers get what they want at the right time. It is a great way to optimize the supply chain. It is still important to be aware that using a cross-dock warehouse comes with its own set of risks that should be considered before it is considered for warehouse operations.

Pros:

• Reduces the need to store the goods

• Helps in optimizing the supply chain

• Reduces transportation costs

• No shipping partners required

• Reduces product handling

Cons:

• Complicated procedure of inventory management

• Time-consuming

• Risk of inventory loss

10. Hazardous Materials (HAZMAT) Warehouse

If you are a business dealing in hazardous materials, HAZMAT Warehouse is your safety net.

But what is a HAZMAT warehouse?
A warehouse to store hazardous materials, commonly referred to as a HAZMAT warehouse, follows the government-laid protocols and regulations for handling materials like

• Harmful gasses

• Weapons

• Explosives

• Radioactive objects

• Infectious diseases

• Corrosive metals

• Viruses, among others

Usually, HAZMAT warehouses are located far from populations and cities. These warehouses are equipped with fire-safety systems, in-built safety features, equipment for material handling, and well-trained staff to work.

HAZMAT warehouses can be expensive for small businesses as they come with loads of features and amenities like 24/7 safety and security, temperature and moisture control equipment, and protocols to safely transport, store, and relocate hazardous materials.

Pros:

• Highest level of safety systems

• Protocols and regulations are followed to the T

• Comes with numerous facilities and amenities for safe warehousing activities

Cons:

• Expensive solution for small businesses

• Highly trained staff is a must for working

• Proper storage knowledge is must to avoid any leaks or spill

11. On-Demand Warehouse

The boom of e-commerce has led to the rising popularity of on-demand warehouses. As the way of doing business has changed, the demand for something other than traditional warehouses has emerged, hence On-demand warehouses.

On-demand warehouses are an attractive option for businesses looking for storage solutions for temporary or seasonal needs.

It connects businesses with excess storage space with retailers, brands or companies looking for short-term and flexible storage options.

Many industries are opting for the on-demand warehouse as it offers scalable and flexible warehouse solutions.

• Hospitality industry

• FMCG companies

• Industrial manufacturers

• E-commerce companies

“If you are a growing business and don't want to tie up your finance in a large upfront to a warehouse, the on-demand warehouse is your ‘pay-as-you-go’ solution.”

Pros:

• Offers a flexible and budget-friendly storage option

• Ideal for businesses looking for short-term storage space

• No need to get your warehouse

Cons:

• Less control

• Susceptible to mistakes

• The management of inventory becomes less efficient

What To Consider When Choosing A Warehouse For Your Business?

Now with all the different types of warehouses, we explained, and you understood, it must be clear to you that each warehouse functions differently and is suitable for specific logistics operations.

• Looking for an automated warehouse? Smart warehouse

• For a business storing perishable items? Cold-storage warehouse

• Looking to store imported products? Bonded or custom warehouse.

Choosing the right warehouse for your business matters, but ensuring its smooth, productive, and effective logistics operations will help your business thrive more!

Consider Prime Associates for your warehouse requirements today!

As a leading warehouse leasing company in India, Prime Associates offers high-end amenities-filled warehouses, industrial sheds, and factory spaces for clients across various industries at the most competitive rates.

Available at the prime locations of Kheda near Ahmedabad, Surat, in Gujarat, streamline your business activities and pave your way to success with us.

Reach out to Prime Associates to know more about our warehouses available for rent.