What Is Flexible Lease Warehousing?
Flexible lease warehousing is a type of storage option that allows companies to lease warehouse space on a short-term or long-term basis, depending on their needs. This type of warehousing is often used by companies that need to store inventory for fulfillment purposes but do not want to commit to a traditional storage contract.
Flexible lease warehousing can also be used by companies that need extra storage space temporarily, such as during a peak sales period. The major advantage of flexible lease warehousing is that it provides companies with the flexibility to increase or decrease their storage space as needed, without incurring penalties or paying for space they don’t use.
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3 Ways Flexible Warehousing Can Help Your Business
There are several ways that flex warehousing helps businesses with storing and distributing their goods. Here are 3:
Space Tailored to Your Specific Needs
First, it can provide you with scalable warehousing space that adjusts to your specific needs. This is especially helpful if you have a short-term need for storage or if you need to fulfill infrequent, large orders.
More Cost Effective Storage
Second, flexible warehousing is more cost-effective than traditional warehousing with long-term leases. This is because you only pay for the space you use, and you will not have to make lengthy commitments.
Improved Inventory Management
In addition, flexible warehousing helps to improve inventory management and fulfillment performance. By using a flexible warehouse, companies may order less inventory, but more frequently. This enables optimization of the cushion stock level to what is more reasonable than less frequent and larger orders.
The result is a lot less inventory that cycles more often. Overall this method requires less space and less management. It’s also less risky in the event of rapid downward shifts in customer demand or other volatile market shifts. It is, of course, more risky for rapid upward shifts in customer demands.
While flex lease warehousing seems great on the surface, it also has some negatives. For example, a lack of customization, infrastructure (racking, etc.), and technology. Since you are operating in a shared type of warehouse, the space must fit a broader set of potential tenants.
Segments That Benefit From Using a Flexible Lease Warehousing
Almost any type of business can benefit from flexible lease warehousing. However, there are a few types of businesses that fit especially well with this type of warehousing:
- Businesses with seasonal inventory
- Businesses with short-term demand
- Businesses with infrequent, but large orders
- Businesses with bulky, low-quantity items
If the products or services of your company or industry fits within any of those types, you should consider looking for flex lease warehouses.
How to Find a Good Provider for Flex Lease Warehousing
When it comes to flexible warehousing, there are a few things you’ll want to keep in mind. First, you’ll need to find a place that can meet your specific needs. You should also look for a lease that offers both short-term and long-term options. Yes, I know the whole point of flexible warehousing is to avoid long-term contracts, but that doesn’t mean you can’t combine the best of both worlds.
Additionally, you’ll want to make sure that the leasing company has enough warehouse space to accommodate your inventory. That means the max potential of your inventory, not just the average.
Questions to Ask Before Signing up for This Type of Warehousing
When it comes to warehousing, there are a lot of factors to consider before starting to work with a provider. Flexible warehousing is an option that has become increasingly popular for companies looking for scalable storage solutions. Here are some key questions to ask before signing up for flexible warehousing:
- What is the minimum and maximum amount of time I can rent flex space?
- How quickly can I get access to the space?
- What is the turn-around time for move-ins and move-outs?
- Is the space climate controlled? (if your material requires it)
- What kind of flexibility do I have in terms of expanding or contracting my warehouse space?
- What is the contract length?
- What happens if I need to cancel my contract early?
- Will my inventory be safe and secure?
- Are any shared services available (for example, fulfillment)?
Asking these questions will help you determine whether flexible warehousing is the right solution for your company’s needs.
Final Thoughts on Flexible Lease Warehousing
Flexible lease warehousing is a great solution for businesses that need to store or distribute products without the long-term commitment of a traditional warehouse lease. It can also help businesses that are expanding and need more space quickly, without having to invest in building their own facility.
If you have a business that experiences rapid demand shifts, has infrequent but large orders, or has bulky materials, flexible lease warehousing may be right for you!
There was a time when businesses revolved centrally around the customer and their needs. Decisions were made based on what is best for the customer first. People did what they said they would, and jobs were completed on time. AMS carries on the tradition of customer service today.