Since our launch earlier this year, we have seen growing interest in Zupplychain’s ‘on demand warehousing’ model, cumulating in record warehouse space availability enquiries and pallet storage agreements in the last month.
Zupplychain is a unique proposition in the UK warehouse market. Not only do we have over 120 available warehouse nationwide, but we also offer instant matches to your pallet storage requirements, showing availability and pricing. Then, rather than calling us – as happens with other warehouse listing sites – we provide an online enquiry process direct to the warehouses chosen. Finally, when using a Zupplychain warehouse to store your pallets, customers get free access to our Stock Database, making it simple and quick to request outbound pallet movements from warehouses safe in the knowledge that exactly the right pallet will get picked. In addition, if a customer is using multiple Zupplychain warehouses for storage, the Stock Database has all the information about all its pallets in one place.
So why are customers turning to the Zupplychain service? Some have emergency or surprise storage problems to solve. Others have outgrown their warehouse or storage facilities and can see that Zupplychain’s on demand warehouses allow them to expand without adding fixed costs. In both cases – and in most situations – a Zupplychain warehouse will be lower cost than taking a whole new unit or additional space in the traditional way.
Owning or leasing a warehouse can make economic sense but often only when mostly full and if warehouse operatives fully utilised with pallet movements. But in that case, a business has little capacity flex when sales spike up; and even less cost down flex when they spike down. With a Zupplychain warehouse, storage costs are at the margin. So Zupplychain enables businesses to grow without the additional fixed cost of new or expanded warehousing; at least until a new warehouse could be largely filled.
The underlying cost principle is that a new owned warehouse incurs the full fixed costs, and many of the semi-variable costs, immediately upon commencement but will almost certainly provide more capacity than initially needed. However, with an on-demand warehouse, the warehouse owner spreads the fixed costs across all its customers meaning that storage is charged closer to fixed cost. The diagram below compares the typical total cost per pallet stored in a Zupplychain warehouse against a new owned warehouse:
We have examined this with a couple of real examples, comparing a typical Zupplychain storage rate with both a low-cost 10k sq foot unit (at £3.50 rent per square foot plus rates) and a mid-cost 50k sq foot unit (at £4.50 per square foot plus rates). The on-demand option is lower cost up to around 70-80% warehouse capacity utilisation.
The point at which an owned and operated warehouse becomes higher cost than on-demand warehousing is also related to the number of pallet movements. Where these are low, a warehouse operative may be under-utilised and the cost per pallet movement high, compared to the marginal cost in a third-party warehouse. We are working on the 3d graphical representation of the operative efficiency effect coupled with space utilisation.
So, whether you have a short-term pallet storage requirement, or your long term growth requires more warehousing capacity, Zupplychain is the place to find low cost available warehousing. Just go here for instant results.
Alternatively, if your warehouse is below capacity and you can offer third party storage, why not register your space with us.