Why warehousing is important for your business
Category News and Advice
Warehouses are primarily used to store goods. They also have a significant role in the management and distribution of goods both locally and internationally. Warehousing and logistics systems add value to your business ensuring it runs smoothly and successfully.
These are some of the reasons why warehousing is important for your business:
The effects of logistic facilities on world trade
With the continuous rise of global trade, businesses have become dependent on support structures such as reliable logistics services. The quality and efficiency of logistics services can either boost trade or become a barrier to it.
A good logistics system will add to the growth and development of the local economy. In return, it increases trade volume and economies of scale leading to a higher scope in distribution and production activities. In contrast, a weak logistics infrastructure or operational process can be a major obstacle to global trade integration.
As a business, you can reduce costs by establishing partnerships with transportation companies that offer warehousing facilities for when your goods are in transit. Bear in mind that it is not just transportation costs that matter. Ensuring that your goods are secure locally and internationally is also vital. Furthermore, the quality of infrastructure, customs procedures, and the length of time that it takes for goods to be shipped matter as well.
E-commerce reliance on warehousing solutions
Companies are increasingly adopting an e-commerce approach to sales which is leading to the rise in the demand for warehousing. According to a study from World Wide Worx, in 2018 online retail in South Africa made up 1.4% of total retail sales. In 2020, online retail sales came to 2.8% - exactly double the percentage for 2018. The total growth for online retail in South Africa in 2020 was 66%, bringing the total of online retail in South Africa to R30.2-billion.
If your company provides goods to customers you need a safe and secure place to store them. Proper warehousing solutions make it possible for both sellers and customers to track the number of goods on hand at any given time, where items are, as well as the time it will take to be delivered.
Increase efficiency vs increase rate M2
The demand for warehousing is influenced by key factors such as consumer buying habits, the economy, technological development, and more. As a business, you aim to obtain the best warehousing facility that will help increase efficiency at the most affordable rates.
In the latest Rode's Report on the South African Property Market, industrial property remained at a top position compared to the other non-residential property types. In the first quarter of 2021 nominal rentals for prime space of 500 m² grew by 1% year on year, nationwide - better than the 0,5% growth achieved in 2020.
The report also highlights the demand for new‐generation warehousing which includes modern racking systems that make stacking heights of more than 12 metres possible. Experts say that this has the potential of making many existing distribution centres outdated. However, they further state that it is technically possible to increase the eaves height of existing buildings, which will lead to efficiency targets being met.
Strategic locations of your warehouse to minimize transport costs
From getting your stock or raw materials from suppliers to delivering goods to customers, transportation comes at a huge cost to your business and sometimes your customers feel the pinch. In order to be significant in a competitive market, many companies are decentralizing their warehouses.
Decentralization means that you can have your head office in Durban while warehouses in Johannesburg, Cape Town, or Port Elizabeth meet the needs of local customers. Since packaging and distribution can be processed at the warehouse, delivery to customers will be much quicker. This ultimately enhances customer satisfaction and improves their shopping experience.
Warehousing is important for several reasons. The most vital reason for you depends on the nature of your business. If you are looking for a warehouse that is ideal for your line of trade, contact Upside Properties today. Our warehousing experts will assist you every step of the way.
Author: Upside Properties
