Public vs. Private vs. Contract Warehousing: What’s the Difference?
The Different Warehousing Options for Your Company
The main three options when it comes to warehousing are public, private, and contract warehousing. Which of these options is best for your company will largely depend on the kind of business you run. What its needs are, and your budget.
If you and your company are currently seeking warehouse space, you may be surprised to find that there are quite a few choices. Storage warehousing is essential for a large number of industries that range from manufacturing to consumer goods to consumer retail.
What are the advantages and disadvantages of public, private, and contract warehousing?
Some advantages and disadvantages come with each of the warehousing types. By weighing the following pros and cons, you can decide on the kind of warehousing that will work for your company.
Public Warehousing
As the name suggests, public warehouses are essentially available for any company to use. However, unlike a public park or a public pool, using these warehouses is not free. If there is space in a public warehouse and your company wants to use it, you must pay to do so.
Public warehousing is typically cheaper initially for most businesses, as using such spaces does not require any major upfront capital expenditures. Going with a public warehouse also tends to give you a broader array of location options. Choose one that is close to transportation hubs like highways or airports. This makes it easier to fulfill your logistics objectives.
In most public warehouses, you can take advantage of the various technologies and systems that they employ. Like a warehouse management system. This will help you to digitally keep track of your inventory. However, you may need to pay for each additional service that you require.
Although you may save some money upfront on public warehousing, you may find that long-term storage may end up costing you more. This is because most public warehouses charge by the pallet. So, any time you need to scale up, it will cost you to do so.
In addition, although public warehouses do often provide many custom services, this customization does have limitations. They may not always be able to tailor their services to your business’s exact needs.
Also, you must take into consideration that public warehouses are not owned by you. This means there is always the possibility that this company can shut down or go out of business. This may pose a variety of issues for your company.
Private Warehousing
Another option that you have when it comes to storage warehousing is building your warehouse. This would fall into the category of private warehousing. In such a scenario, you not only own the property and the warehouse, but you also own the warehousing equipment. Thus everything is typically controlled in-house.
Private warehousing can end up saving your business a lot of money in the long term. Owning your warehouse also gives you complete independence and control over logistics. This will allow you to know and control exactly what is in the warehouse at all times.
As a plus, you will have flexibility without having to pay for it. Your business can scale up or down whenever you need to. And, you can even rent out part of the warehouse when you do not need the entire space. This is a great way to improve your company’s revenue stream.
One of the biggest cons of taking the private approach to warehousing is that the upfront costs are significant. Typically, this is why this option scares away most small and mid-sized businesses. You need to have enough capital to purchase an existing warehouse or build one yourself. Then, you will also need a considerable amount of money for the right kind of equipment to keep your operation running smoothly.
In addition, you may be required to obtain certain certifications and insurance if you are storing particular items in your private warehouse. These can be inconvenient and costly.
Contract Warehousing
With contract warehousing, you get the best of both worlds. This option combines some of the best features from both public and private warehousing. And, you can secure a predetermined amount of storage space on a month-to-month basis.
In addition to allowing clients to store their goods, contract warehouses provide various specialized services. Services such as import and export, cross-docking, packaging, inventory control, local transportation, and quality control.
Like with a public warehouse, you can avoid upfront expenditures when you go with contract warehousing. Expenditures like specialized material handling equipment and inventory management systems.
You have access to a top-notch facility and services for just a fraction of the cost. Also, you have almost as much control and flexibility as you would with a private warehouse. This will help your company to survive as it changes over time.
The one downside of contract warehousing is, with some warehouses, you enter a contract for a set amount of time. Thus, contract warehousing is better suited for companies that are looking for long-term storage rather than short-term.
Wills Transfer: The Perfect Choice for Top-Quality Contract Warehousing
After hearing the pros and cons of each of the primary storage warehousing options listed above, it is quite clear that contract warehousing is the one that comes out on top. Your business can save money in various ways while taking advantage of a significant number of specialized services.
If you are interested in taking this route, there is no better option than Wills Transfer Limited. Wills has been helping companies to thrive through our top-quality contract warehousing services for over 75 years.
We would be happy to take on the responsibility of storing and transporting your products while allowing you to take advantage of the inventory management, security, and pick-and-pack services that we provide. We will gladly scale our services and customize them based on your needs as they change and evolve.
For more information about our flexible contract warehousing management system or to learn more about the extensive list of other services we provide, call Wills Transfer Limited at 613-704-7549 or contact us here
