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5 Types of Warehouses and Their Uses

July 15, 2020 Published by

warehouse interior glows in sun

Picking the right warehouse for your business may seem like a simple decision. After all, it’s as easy as renting or buying a building that is big enough for all your orders, right? But the truth is not all warehouses are created equal. Many factors go into choosing the right facility.

We’ll explain the different types of warehouses available and their uses so that you may choose the type best suited to your business.


1. Public Warehouses

Public warehouses are typically the most affordable and accessible option for small businesses (SMBs) and eCommerce startups. Owned by governmental bodies, they are lent to private sector companies for business and personal use.

Though public warehouses are not the most technologically advanced spaces, they are great for SMBs or eCommerce startups that need to store their goods for a short amount of time. They can be a valuable stepping stone on the way to a more efficient, long-term option.


2. Private Warehouses

If your business has grown to a significantly large size, private warehouses can be a good choice. Typically, large retailers and online marketplaces will have their own privately-owned warehouses. They are expensive, but they are an excellent option for established companies looking to make a long-term financial investment in their storage.


3. Smart Warehouses

AI is quickly proving its worth in the eCommerce world, and warehouses are evolving because of it. For the business looking for a warehouse that can fulfill orders with little to no human error, a smart warehouse is the way to go. This kind of warehouse automates its management and fulfillment process. You can find robots and drones performing tasks human employees would do like packing, weighing, transporting, and storing goods.

Although this kind of warehouse increases output and minimizes error, it is not without its drawbacks. Employees assigned to a smart warehouse need to be retrained for new processes that require a higher technical aptitude, and the initial capital investment can take several years to receive a return on investment.


4. Consolidated Warehouses

Consolidated warehouses are another great option for new eCommerce SMBs. This kind of warehouse will take small shipments from various suppliers and group them into large shipments before distribution, making order fulfillment easy. The only caveat to this strategy is that all shipments must be headed to the same geographical location.

All in all, consolidated warehouses are an affordable, efficient way to fulfill orders due to the small investment and amount of inventory volume needed to use them.


5. Fulfillment Centers

Fulfillment centers are warehouses managed by third-party logistics providers (3PLs) used by many eCommerce businesses to outsource the storage and shipping of their goods. This can be a great option for eCommerce businesses who’ve hit their stride but quickly find themselves overwhelmed by new order fulfillment challenges like increased order volume, low storage space and lack of an adequate logistical infrastructure.

With a fulfillment center, eCommerce merchants eliminate the need to maintain a warehouse and can instead use their resources on building other aspects of their business.


No One Warehouse Fits All

When choosing a warehouse, you must be aware that there is no one warehouse type that is best for all businesses. Whether you’re just starting out or the owner of a large company, you must continuously evaluate your warehouse choices depending on how your business develops.