Important Factors
Are you all set to buy or rent a warehouse? You may have talked with numerous brokers and visited multiple websites to find a warehouse that best suits your requirements. But do you check the location of your warehouse?
If not, then halt your dealing. A single location can have a significant impact on business. It can make a business walk on the path of success, or take the business downhill.
So choose wisely; researching can help find a warehouse at one of the ideal locations and prosper your business. Choosing a warehouse location is a bit of a task, but we got you covered.
Prime Associates bring some factors to consider while choosing a warehouse for you.
Renting a warehouse at a particular location highly affects a business’s success and choosing a warehouse location is one of the most complicated tasks.
As mentioned, these are several benefits of choosing the perfect warehouse location:
Be near your customer
Reduces cost and increases the productivity of the warehouse
Cuts down the transit costs
But with the right location, you must also look for the services and leases. Suppose you got a warehouse at an outstanding location but the unavailability of services will put all of your warehouse operations at risk.
Similarly, a wrong location will add up to your transit costs. So it is essential to consider a balance between those services and location. Here begins the main task of selecting the right warehouse location.
We know the process of selecting a perfect warehouse is a bit overwhelming, but some research, expert advice, and collecting the data can help to make the perfect decision.
So, let’s explore some of these factors which you must look out for before signing the lease agreement.
One of the things to consider while looking for a warehouse location is the warehouse layout.
The warehouse layout is designed according to logistic operations conducted within the facility.
Before making any hasty decisions, ensure that the warehouse facility has enough space, ceiling heights, workers’ area, and separate shipping and receiving areas are available or not, as some of the older buildings don’t have all of these facilities.
A simple mistake in your warehouse layout design can hinder all warehousing operations, resulting in the warehouse's inefficiency.
Setting a perfect warehouse layout is just the first step; you must also consider the warehouse's flow.
The warehouse flow refers to how your inventory will move within the warehouse during logistic operations. There are three main types of warehouse flow: U-shaped, I-shaped, and L-shaped. So choose the one which suits your business activities the best.
Maybe you have chosen the best location, but is the workforce available? If yes, then are they skilled? What about the labour costs?
A great location is not enough; you also have to look for the available workforce. What if you select the best location, but your employees have to travel a long distance to reach the warehouse?
Or what if they are not skilled enough to handle all the modern equipment? You have to train them hard and it will eventually add up to warehouse operational costs.
The solution to this situation is to look out for local demographics. You will get a rough idea about that particular place's educational attainment, population, and income levels.
Not every location will give you a skilled workforce, as an unskilled workforce decreases the quality of work. Along with labour availability, you also have to keep an eye on supply and demand. Why? So, the availability of the workforce and demand for the product is inversely proportional to each other.
For example, if there is high availability of a workforce with low demand, it will cut down some operational costs.
While if we flip the situation with low availability of a workforce with high demand, in this situation, you have to pay employees more, which will increase operational costs.
Transportation and Warehousing walk hand in hand. In other words, transportation is an integral part of the warehousing facility. As there are different modes of transportation available, which suits your business the most? Air, water, rail, or the road?
Whichever transport facility you use, ensure that the warehouse is located at the minimum distance from them.
The customer's expectation of receiving deliveries is high. Nowadays everyone wants on-day and next-day deliveries.
In such a situation, you cannot afford to be late. This scenario can occur when a warehouse is located at a remote location.
If your products are imported/exported via air or water, or you mostly carry out outbound transportation, you must find a warehouse facility near airports or ports.
And if they are not available, then find a warehouse from where they are easily accessible through roads and highways.
Let’s talk about roadways; one of the most important things to look out for on roads and highways is local traffic density.
Traffic can affect your transportation costs and have a negative effect on the effectiveness of the company. So consider the following things,
Average traffic speed
Traffic peak hours
Average traffic volume
While selecting the location of a warehouse, you have to also look out for lease rates and taxes. Several areas have higher lease rates as compared to others.
For example, in India, lease rates in Pune are highest, around 248₹, while in Mumbai, it closes at 218₹ (these are average numbers. The landlords usually decide the rents).
So look closely at lease rates of various locations, and select which benefits you the most. But sometimes, selecting a warehouse with cheaper rates can surprise you with hidden costs, which add up to your operational costs.
So, beware of hidden costs!
Along with lease rates, you also have to look out for the tax structures. Tax structures and tax incentives do have an impact on the warehousing business directly or indirectly.
Pro Tip: Before signing the lease agreement, check who is responsible for paying various taxes and which utilities are included in the lease. And cross check whether you have to pay an NNN lease or a CAM lease. Ensure every pros and con before signing the document.
Selecting a warehouse location begins with considering the customer base. Of course, you don’t want to set up a warehouse where you won’t be able to sell a thing.
Conduct a survey and find out where most of your customer base is.
If most customers are from Gujarat, set up a warehouse there at one of the most prominent locations. You can gradually increase your reach to various places, cities and states. .
Be sure to be near your customer base, so you can easily deliver their products as quickly as possible.
Being closer to the customer, done.
But are you close to the suppliers and producers as well?
A new warehouse needs to be close to suppliers, producers, markets, and customers. Simply put, with a strong connection to suppliers and producers, you will be able to run your logistic operations smoothly.
Proximity to suppliers, producers, and market(s) can help in
Reducing lead times
Enhancing responsiveness
Decreasing transit costs
Another factor to consider while choosing a warehouse location is the environmental condition of that area. We all know that natural calamities are unpredictable. They can come unannounced.
But certain regions in the country are more prone to cyclones, earthquakes, floods, storms or snowstorms. Sudden climate changes can affect the supply chain and make it slower.
So, before choosing a location for your warehouse, ensure all the environmental conditions. In such areas, ensure the warehouse meets specific building requirements.
Other local environmental factors include
Traffic congestion
Peak traffic hours
Truck Access
Moreover, your warehouse should ensure that it does not negatively impact the neighbourhood.
If your warehouse deals with hazardous material, please consider shifting toward isolated areas, as it can harm the neighbours and pollute the surrounding air.
Another thing to check is the size of the warehouse, to check whether the space is enough or not. No one wants a place which is too big or too small for their working operation.
We all know business can move towards the path of success, but it will not remain the same forever. Sometimes you have to face loss and downfalls too. Either you will grow or fall, and accordingly, you need a warehouse space that can adjust accordingly.
Before signing the lease, confirm with the landlord if there is a possibility for expansion or regression of your warehouse space in the near future or if you have to find a new place.
And if moving is the only option, then look for warehouses in the same area. This will save you from
Late deliveries
Minimise the frustration of moving to a totally new place
You will able to retain the workforce and other utilities
Along with all the points explained above, there are also some factors that are essential to look out for.
One of the main aspects of a warehouse is utility costs. Firstly, know which utilities are provided by your warehouse. Does it have all the facilities for cold storage warehouses? One of the most important yet neglected utilities is the internet and communication. It is better to also look out for utility costs.
Another thing you have to look out for is the accessibility of the equipment. Ensure that you have dock facilities, and remember highly intense distributions require cross-dock facilities.
Another thing you have to look out for is Zoning. The government has differentiated various zones according to the different criteria for city development. If your warehouse is going to conduct intense operations, try to rent a warehouse in the industrial zone. This will also have a positive effect on your rent.
Prime Associates has been a leading warehouse leasing company for the last four decades and has served its world-class warehouses to many of its clients. All our warehouses are located strategically in Gujarat, benefiting our clients and us.
Some of our strategic locations are:
The Aslali-Kheda warehouse cluster is one of the oldest warehousing clusters in the city and contains higher-quality warehouses. Prime Associates have two major warehousing hubs in this golden city of Gujarat, Prime Industrial Hub and Prime Industrial And Logistic Hub.
One of the major benefits of renting a warehouse in Kheda is that you will always be near the city of Ahmedabad and many small and large-scale industries located on the city's outskirts. Moreover,
Both of our locations are connected to the National Highway, which connects you with numerous cities.
Our warehouse location is just 10 km away from Ahmedabad railways and only 35 km away from Sardar Vallabhbhai International Airport to carry out your transportation easily.
In addition to being known as the diamond city and Gujarat's economic capital, it is one of India's major industrial hubs. Prime Industrial And Logistic Park have warehouses with world-class amenities to conduct various logistic operations seamlessly.
Surat is well connected with the railway and road networks to make inbound transportation easier.
Surat has its own Surat International Airport and ports like Hazira And Magdalla ports to make your outbound transportation easier.
You can make or break your business depending on the location of your warehouse, as we mentioned in the blog post. It is better to take help from the experts or hire a commercial broker to rent a warehouse of your choice.
A simple yet right warehouse location can significantly affect your business in all aspects; financially, operationally, and competitively.
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