11 Warehouse Success Principles

 In this blog post, I am going to be talking about 11 warehouse success principles. Things you should keep in mind when you are thinking about outsourcing to a warehouse, and things you should be wary of, so that you don't stumble across anything which could potentially hurt your business.

Proven Level of Success

If you have got yourself out into a warehouse, or if you are thinking of getting yourself out into a warehouse, it is a big step. You are going to be going out into a property, going into a warehouse which has a lot of complexities. Everything from financials to staff to health and safety - there are a lot of things going on. Before you get to this point, you want to have some level of strategic and foundational success. This means that what you have been doing has actually been more strategic and you have got some purposeful results in your business, so you are not a beginner. 

Even before you expand out into a warehouse, you would have already had some level of success, from selling out revenue, to hiring staff and to having foundational operations in place; this includes sourcing, to purchasing, to ultimately shipping, as well as the account management of the business.

Warehouse in Your Ultimate Vision 

If you are going to commit to a warehouse, then the warehouse which you see must be a part of your ultimate vision. What is it that you want to ultimately do as part as your operation? And as part of your business? 

For Kev, he was an electrical engineer, and as a part of the manufacturing team, he always had that passion, drive, and desire to build something, something that was a part of the foundations and fabric of the business, and this is the warehouse. 

The truth is if you do decide to go out into a warehouse, then whatever vehicle that you have decided, which is this eCommerce vehicle, you want to have the warehouse a part of the foundation of that business. Fast-forward 10 years in your life, 20 years in your life, 30 years in your life, you want to be thinking, “Do I truly want to be in a warehouse? Do I truly want to have a warehouse as part of that ultimate vision?” 

For Kev, with his engineering background, he loved the idea of having a blank canvas which he could build, then strategically systemise. 

Financial Management and Resourcefulness Runway

Before you go into a warehouse, or whether you are already in a warehouse currently, fundamentally all around it is financials - that is just the bedrock of a business. Are you financially in a position to be able to Afford a warehouse, to be ready for a warehouse knowing all of its expenses? This is all based around financials, whether you are able to pay yourself, pay the warehouse - the rent, whether it is business rates, electricity utilises or taxes. The financial management that you have, that is going to be critical, because if you decide to commit, whether it is into your first warehouse, going into your first warehouse or going into your second warehouse or third, you are going to need to know everything involved in each of these. Know your business inside and out.

So, there are a number of things from a financial management point of view, which Kev would highly recommend. First of all, he would highly recommend reading the book PROFIT FIRST, which is going to be a fantastic foundational, financial management system, which can guide you in the right way in terms of the profitability in your business. You want to have clarity in your business when it comes to finances. One thing which drives Kev is certainty - certainty in knowing that he is going in the right direction, knowing that he and his business are both healthy. 

The resourcefulness runaway is a part of your financial management system. This is you as the business owner, knowing what runway you have. If you think about all of the expenses in your business and think about all of the capital that you’ve got available, the cash you have got at hand right now or the credit that you have got at hand right now, knowing what you have got, whether it is from saving accounts, your profit account, this is the resourcefulness runway.

So, if anything happened or if an emergency struck, you wake up in the morning and something has happened and you need 1-2 thousand pounds, whatever it might be, you are resourceful, you are able to look at what capital you have got, what cash you have got, what credit you have got, what reserves you have, and you have got a bit of a runway; whether that is 3 months or 6 months down the line. 

So, if your business stopped, if everything that we do just stopped and went to ground zero, what is your runway? One of the things for Kev personally, before he ended up quitting his job, before he hired his staff members and before he moved into his first warehouse, Kev was very aware of what reserves he had, what cash he had, what credit he had available, and that gave Kev a level of certainty and clarity, so if anything happened, then Kev would have options.

Delayed Gratification VS Bottleneck Growth

This means, you right now, if you are thinking of going into a warehouse, or you are already in a warehouse, and you don’t know when to jump into your next warehouse, a part of anything that we do in the business, you have got to have that delayed gratification, as in, don’t be too hasty to make a fundamental change in your business.

You have one great month in your business, and you decide that you want to go into a 10,000 SQ FT warehouse, so you commit to it, you sign leases and contracts and then all of a sudden, month two, it drops, month three it drops even further. Then all of a sudden, you are beginning to panic, and you weren’t really in a place ready for your business. 

Being slow and strategic, with the big milestones and big actions that you are taking in your warehouse. But, at the same time, on the flipside of this, you shouldn’t be too slow and be the bottleneck of your growth. You could be ready for that step, but you are bottlenecking your own growth, and you’re not deciding. You are going month on month, and you are thinking to yourself that you need to take this action, then just thinking to yourself, “I’ll just leave it a month; I’ll just leave it another month”. 

Every time you make this type of strategic move, going into a warehouse, think of it from this point of view: Kev was at home, he was operating from home and shipping from home, and his living room and dining room was jam-packed, Kev and Kylie were super busy at home, and they were reaching the bottleneck of space. 

When Kev and Kylie moved into their 2000 SQ FT warehouse, all of a sudden, they weren’t as busy as they thought. That small living room only fit into a small little area within the roller shutter door, which basically meant they had another 1800 SQ FT of empty space. What this did for Kev, was he started to believe that it was like a vacuum effect. All of a sudden his mind opened up to a bigger way of thinking, and he wanted to suck all of those ideas. How can he grow? How can he build this space? Kev realised that he and Kylie weren’t really that busy at all. They needed to find more products, build more relationships, order more quantities, open more accounts and so much more. It was a completely different way of thinking. 

Supply Chain Relationships

What this means is you are going into a warehouse, or you are currently already in a warehouse, you as the business owner, all of your management team, as you start to build your management team, you need to really have a core belief, that the supply chain relationships in your business is absolutely paramount, because they can make such a catastrophic difference in your business. What this means is your suppliers, wholesale accounts, brand accounts, exclusive brands, whether that is partners you have, whatever key all your relationships in terms of inbound into the warehouse, as well as then, the outbound in the warehouse, all your logistics, everything from the couriers, UPS, Royal Mail, maybe you have got your third-party pallet pickups, building relationships across your supply chain. This is paramount, and it should be part of your fundamental practices on a week-to-week basis, protecting the relationship of your supply chain, this can be by inviting partners to come see you, inviting wholesalers to come see you, your vendors to come see you, exclusive brands to come see you, making phone calls, checking in, emailing, and always think about how you are protecting the supply chain and how you are protecting the relationships. Kev goes for visits to UPS, he talks to Royal Mail, and he talks to all of the companies and couriers, whether that is his local couriers who take his pallets, case distribution, Spavins, all Kev’s exclusive brand deals; he is always nurturing the supply chain relationships, that Kev and Kylie fundamentally have, because this makes such a huge difference to everything that you see. If you don’t have relationships, and if you don’t protect the inbound and the outbound, and everything in between, as in your staff and everybody, this is fundamentally either going to give you success in your business and continue growth, or you are going to start struggling.

Business and Operational Management Systems

If you are interested in this book, check it out here: https://www.systemise.us/affiliates

This is Kev’s book, The Perfect System. Essentially, in this book, it has two of Kev’s frameworks, which Kev fundamentally believes in and continues to build through.

Business Management Framework 

This is everything high level, everything from having that systems mindset, developing systems in your business, having the mission and ultimate vision in your business, this is your core values of what you have in your operations in your business. The system stages you are building across your warehouse, whether that is inbound, picking, processing, quality control, whether that is shipment creation, communication and everything in terms of your system stages. Your organisational chart and Accountability chart. This is the staff you are going to be hiring, having a clear vision of what your business is going to look like now, to what it is going to look like in 3, 6, 9, 12, 36 months, just having visions of what your fundamental structure is going to look like. Then, it is all the contracts you have, whether that is in your warehouse, the contracts you have, whether that is the landlord you have, all the leases, if you have got a purchaser, knowing all the legal aspects of the business, the health and safety of the business, making sure the staff are under contracts, the roles and responsibilities, what are the tasks that they are going to be doing, then systemising through working procedures across all your business. 

Operations Management Framework 

This is everything to do with your appraisals, your monthly reports, your weekly updates, the new systems which you are going to be introducing into the business, where we are going to be talking a lot about systems, and throughout this, we are going to share with you the actual processes which Kev and Kylie have in their operations now, as well as the processes they had throughout this stage, and what they have actually been building towards. 

When something from an incident point of view, actually occurs in your business right, then what is the processes and the procedures, the processes that you have got, for if there is an incident, or there’s a failure of some sort, how you are dealing with this, and then the communication and task management across your business, These are fundamentally going to have such a major impact on the success of your business, and this is why it’s one of the success principles. 

Shrewd Investments Based on Immediate Productivity  

When you move into a warehouse, one of the things you are going to want to think about all the time is productivity - how can we make things as quick as possible. Productivity in Kev’s opinion is always going to give you a positive ROI. 

Would you like to learn how to be more productive?

How to Plan Your Day for MAXIMUM PRODUCTIVITY

When Kev first started back at home, he didn’t used to have tape dispensers for all their boxes and packages, he used to spend 10 minutes trying to find the end of the tape, having to peel it off, tape up and then bite the end off. But the tape dispenser cost 5-10 pounds, and now it is going to take you at least 3 seconds compared to before 10-15 minutes.

This is one of the simplest investments you can make, which is going to give you a boost in productivity, and a positive ROI long-term in your business. But, ultimately it is going to guide you across everything which you decide to invest on. All your investments, every bit of capital that you have in your business, as long as you are guided by productivity, does it make things easier, quicker and the quality of your work better? Quality control, whether it is inventory movement, speeding things up, it is always going to give you an advantage if it is going to speed up productivity, whether that is your inventory management, the software, location, even if it is as simple as a warehouse location map, knowing something like the location of where exactly something is racked. 

Any investment you make, whether it is time, capital or staff employment, if it ultimately boosts productivity, then you want to consider whether you do it at that moment of time.

Commit to Massive Action and Sacrifice 

Being successful in your warehouse is going to need you to take massive action, and be willing to sacrifice your time. In the short term, to build you up in the systems, and the business operations that you want, this means getting up early, being the first one to the warehouse and being the last one to leave the warehouse, whether that is being there when no one else is at the warehouse, and willing to come into work to think outside the box, and think about how you can make things better and faster. Sacrificing short-term, for the greater good long term. Taking massive action, if you are only working 40 hours a week right now, can you work 50 or 60 hours? You have got to design your life how you want, and build the life that you want to live. This is not to say you work every single day and you burn out, but at the start, when you are just starting your business, when you are just coming into your warehouse, and you have got to build everything, you are on your hands and knees.

Diversification of Business

Diversification is going to be essential a part of your warehouse operations, this is diversifying across your business. That is if you are right now doing Amazon FBA, you’re looking at FBM, or if you are just now solely Amazon, you are looking at how you can diversify into eCommerce in general, whether that is developing your own brand, going into Shopify, starting different products and services. Use the resources you have at your disposal. 

One of the things Kev did, was because he had the warehouse, it allowed him to start sharing videos, a networking, allowed Kev to start teaching, and it allowed Kev to start inviting his partners and vendors, clients and customers to come and experience the warehouse, because this is maximising the use of all your resources. This is one of the reasons why diversification is key.

High Level Mastermind

Always learning and never-ending desire to learn. So, for Kev, he surrounded himself with some amazing people, some of the people are in their own warehouses, who Kev can learn from, throughout the journey. For example, in this blog post, I am sharing some of the principles which got Kev to the level he is at. This is invaluable to your success long-term, because learning is the greatest investment you can make. This is why Kev created the mastermind group, with some close friends of his. He has great people all around the world at this point, people who are doing hundreds and millions of pounds worth of revenue, being around people who are taking action practically in their own business.

Record and Capture Everything

This means you should take videos and photos of your journey, quality control, whether that are the videos and photos you are taking here, whether that is creating a YouTube channel and recording your journey, just record absolutely everything, because this allows you to review, look back in history; what was working and what wasn’t working, and it really helps you with your motivation, and help remind you every day why you started and what keeps you going. This is exactly what Kev did, and if you want to check out his YouTube channel, please do here: Kev Blackburn

Further Reading:
How To Build Systems In Your Business

How to Automate Amazon FBA: 5 Steps

8 Considerations If you Are Going to Quit Your Job for Your Business