Why is Location the all-Important factor when Selecting a Warehouse

A warehouse is indispensable for most businesses dealing with physical goods. The role of a warehouse goes much beyond the storage of goods. It is the supply chain's central point and key to efficient business performance. 

Many businesses consider only the size when deciding to set up the warehouse. But just any warehouse of the required size will not suffice. Selecting a warehouse at the right location can make a big difference to the profitability and competitiveness of your business. 

Here is why location matters the most when choosing a warehouse for your business needs.

1. Accessibility

A warehouse is a central hub in the supply chain. The easier it is to reach this hub, the smoother the supply chain operations. 
A well-positioned warehouse lower transportation costs and improves delivery times. This, in turn, leads to happier customers. 

If you set up your warehouse in an easily accessible place, you can move goods efficiently and fast. 

Your recipients receive goods on time, with a lesser risk of delays. 

You can reduce transportation times if your warehouse is near the road, railway station, seaport or airport. Doing so streamlines your operations and improves supply chain performance improves. 

Transport costs typically represent a significant portion of overall logistics costs. A strategically located warehouse reduces logistics costs and improves the bottom line.

2. Being near the customer or source

Today's customers expect fast delivery of goods. E-commerce players must deliver on the same or the next day to survive in a highly competitive landscape. The warehouse close to the customer enables speedy delivery and gives your business a competitive edge.

Many companies embrace a distributed warehouse model, where they take up multiple managed warehouse spaces close to their major sales points or customer locales. Read more about how distributed warehousing benefits e-commerce.

The best Location of the warehouse also depends on the purpose of the warehouse and the nature of the goods stored. 

For instance, locating the warehouse near suppliers or producers makes sense if your warehouse is for inbound materials or goods. This reduces transportation costs and minimizes the risk of supply chain disruptions.

Flexible warehousing has made it possible to acquire any number of warehouses for rent without long-term commitments and complex procedures. 

3. Infrastructure

Consider the surrounding infrastructure when deciding on the warehouse location. Good roads and reliable utilities contribute to the overall efficiency of warehouse operations. The utilities warehouses need most include electricity, water, internet connection, and waste disposal systems. 

Ensure the warehouse is not in a flood, earthquake, hurricane, or lightning-prone zone. Such natural disasters can damage the warehouse and disrupt operations.

One important trade-off you must make at this stage is room for expansion. Being able to scale up saves many hassles and allows your business to grow easily later on. But space to expand may be available only at a remote location. Check out the various best practices for optimizing the warehouse space efficiently.

On-demand, warehousing makes it easy to expand storage space whenever you require. You can scale down just as easily and pay for only what you use every time. 

4. Workforce availability

Efficient warehouse operations depend on the availability of the workforce. You can invest in the latest technology, such as robotics, to automate many warehouse tasks. However, human employees are still indispensable for most tasks. 

If your warehouse is located at a central location, near public transportation, you can attract workers easily at relatively low costs. 

If your warehouse is located in a remote area, skilled staff may not be willing to work there. 
You will have to spend more on human resources, and you may even have to spend on the transportation and accommodation of the workforce.

5. Regulatory considerations

Make sure the property you identify for the warehouse is in a commercial zone. Cross-check if any other restrictions apply. The local regulations may require a permit or council approvals to locate a warehouse in a non-commercial area. 

Also, different cities, states, or counties may have different laws, regulations, and tax structures. These costs can impact the total cost of the warehouse significantly. 

Some remote areas offer attractive terms, especially discounts on utility charges and property taxes. You can consider setting up warehouses in such places if the benefits exceed the extra costs of operating in the area. 

The right warehouse location depends on factors that go beyond geography. If you can move goods faster, and all the resources you need to operate the warehouse are readily available, your business competitiveness improves. 

The warehouse location directly impacts storage costs, operational efficiency, and customer service quality. 

Identifying a good site is a complex exercise that involves balancing various factors, from accessibility and customer proximity to labour availability, environmental risks, and more.