Within the supply chain, there are a variety of warehousing options, each designed for different purposes for different sized businesses, and all with different business models in mind. For many companies, the choice between a distribution warehouse and a public warehouse can be a difficult one.
Read on to learn the difference and find out which might be the better option for you. Then contact the team at Amware to learn more about warehousing for your company.
What is a Distribution Warehouse?
A distribution warehouse is a specific type of warehouse designed to service goods nearing the end of the supply chain. When items are already manufactured and ready to be distributed to retailers, a distribution warehouse is one place you’ll find them. Distribution warehouses are most often tied to specific distributors for specific products. For example, a telephone manufacturer might consider utilizing a distributor who reps telecom and computer equipment. That distributor would utilize their warehouse to store and ship those telephones to the retail outlets that will be selling them. In addition to storing and shipping the products, the distributor may offer training or support for those phones. In doing so, however, the cost to the manufacturer increases, reducing their profit margin.
Another manufacturer who makes pencils doesn’t require the same type of support the telephones require, so paying more for a specialized distribution warehouse probably doesn’t make sense. A public warehouse with simple pick and pack services would make more sense. This is why product type is a big determinant in choosing what type of warehouse to use.
Benefits of Using a Distribution Warehouse
- Unlike other warehousing options, a distribution warehouse is built for easy inbound and outbound product movements, and utilize a warehouse storage system, which makes it easy to track, inventory, and locate products within the warehouse.
- Because distribution warehouses are made for this specific stage in the supply chain, pick and pack, inventory, and shipment tracking are all top priorities. A good distribution warehouse will utilize a warehouse storage system for convenient product movement and a digital tracking system for safety and security.
- Distribution warehousing lowers the risk of damage, loss, and theft of your products. Because the distribution warehouse option is designed with your products in mind, they can be tailored to your specific needs, including temperature specifications, heavy equipment use, and even the correct humidity levels. This means you’ll lose less product on its way to your customers.
- Risk Mitigation – Many warehouses use advanced technology like RFID labels and a tracking system to ensure your goods can always be inventoried and located.
Distribution Warehouse vs. Public Warehouse
Unlike a distribution warehouse, the public warehouse option typically offers less amenities, but it comes at a lower cost. Options like temperature control, pick and pack, and a top-of-the-line inventory management system may not be available in all public warehouses, while others will offer one or more of these ancillary services. On the other hand, public warehouse options allow for versatility, high affordability, and short term contracts that might not otherwise be available in a distribution warehouse. Choosing the right storage facility for your product is a decision that should take into account a variety of factors including cost, time commitment, business model, and product type, as well as inbound and outbound shipping needs.
Learn More About Warehousing
To learn more about what type of warehousing might best your product type and budget, contact us today. Our warehousing experts will be able to walk you through the benefits and options of warehousing your specific products. For more information, click below and learn about the Hidden Costs of Warehousing you probably didn’t know.