Reseller Warehouse

In this blog post, I am going to be sharing with you 10 pre-warehouse vital considerations, which you are going to want to consider in your own journey, before committing your business to a warehouse. This follows on from the last part of the warehouse series, so if you haven't read that yet, please do here: 11 Warehouse Success Principles. Or watch the video here: 

Now, Let's jump into this with the 10 pre- warehouse vital considerations...

Are You Ready For a Warehouse?

The first consideration before you go into the warehouse is: Are you ready for a warehouse in the first place? Are you ready to make that leap? 

This is all to do with the business you have currently, the operations that you have, and the financial management systems which you have currently got. So, you have some results in your business and you are managing your eCommerce business, your Amazon FBA business, where you have got some consistency in the results you have got. Through the financial systems you have, you are able to see the profitability of your business, you are clearly able to see that now is the time for you to go out into a warehouse. 

A big part of this is the financial runway. What are you going into a warehouse with? Have you been saving? Have you got an emergency fund? How long is that emergency fund going to see you out? The worst case scenario that your business stops, you stop generating revenue, and you're not making any sales, so what is the runway of your business? This is going to be super important.

What Costs Are Expected With Your Warehouse?

 The second pre-warehouse consideration is you are going to need to know the list of all the costs which you are going to incur of making that jump into a warehouse. So. there are a number of things which you are going to be subjected to, based on the fact you are going to be moving into a warehouse. This is also subjective to location, whereabouts you are, which country you are in, what region of the country you are in. It is very different from a city to a town or village, so costs are going to be subjective depending on where you want the warehouse located. 

There are also another number of things to do with costs which fall under this.

•  Rent

What is the rent going to cost you?

•  Rates

What are the rates, if there are any rates involved

• Security

What's the security like at the warehouse?

• Insurance

What are the insurance costs which you are going to have?

• Utility Costs

What are the utility costs, to make everything come alive?

• Travel Costs

If you are at home right now, and now you are going to have to go into a warehouse, what's that going to do in terms of your travel costs and your fuel costs?

• Set Up Costs

When you move into a warehouse, it is going to be a completely empty shell, so there are going to be some set up costs. You need to be thinking about the set up what you are going to be wanting to have.

• Staff Costs

 Start to think about the different staff costs you are going to have.

• Materials 

You are going to have to buy the materials and the equipment - all the things you are going to be using inside the warehouse.

And on top of all this, you are hopefully going to have your wages, you are going to have stock, which you are actually selling, and the products you are going ti be placing. You have got everything which comes from a taxes point of view, an accounting point of view, all the pays you earn, and everything that's involved in actually having a warehouse.

So, really, what you should do is create a list of all the costs which are going to help you. At least then, when you start to go looking at warehouses, you are going to be able to forecast if you are ready and what is going to be involved.

What Size Warehouse Is Appropriate?

The third consideration to make, is what size warehouse is best for you? What is appropriate? This goes onto really thinking about what your ambitions are, and what size is appreciate for you. For Kev personally, his first warehouse was a 2,000 SQ FT warehouse, which he moved into from his home. This 2,000 SQ FT warehouse was ginormous when Kev first moved in, in fact it was that big that Kev's son was playing a little bit of football around the warehouse, and Kev's daughter of 1 at the time, was inside the boxes, drawing and making castles. 

But you want to start thinking about this, you don't want to go too big, but you also don't want to go too small. You want it to be a stretch, like an elastic band - it is stretching your business, and it wants to be a stretch, but it doesn't want to be pulled that far back that it snaps. 

So, if you were going to go from your home to a 30,000 SQ FT warehouse, that is most likely going to be too much of a stretch. But you also don't want it too small, that you are going to be in the same situation within 12 months.

What Type Of Warehouse Is Best?

There are many different warehouses - there are many different styles of warehouses. You can have a warehouse which has one big open space, or you can have warehouses which have smaller rooms and smaller spaces, you can have a warehouse that is on the ground floor, or on the upper floor. Ultimately, what type of warehouse is best for you.

For Kev and Kylie, they have always looked for a warehouse which has some element of office space, kitchen space, toilet space, and then an open space. This is always been something Kev and Kylie have focused on, they did this for their first warehouse, and the warehouse they are currently in now too. 

If you go into a warehouse which has box rooms, walls and pillars and things in the way, it is going to cause you problems, whether that is pulling pallets in, moving pallets around, moving boxes around and trying to build your systems, it may get in the way.

What is Available At the Warehouse?

This is everything that is available in terms of what you need. Does it have internet? For example, in the warehouse Kev is currently in, they had two internet providers, but they ended up getting another one. 

However, the warehouse also has antenna like a signal for the wi-fi on top of the roof, whereas where it is located, because it is an older industrial park, it doesn't have all the latest internet connections. 

You need to think from a delivery point of view, are you able to get your suppliers at your address, because this is going to be a problem. You need to make sure that all the suppliers which you currently have, are going to be able to deliver to your current address. 

You also need to consider heating. Kev historically has never had heating, but these are some things which can be available at the warehouse. The best option would be to create a check list, and put down all the things you are going to want to consider. 

Legal Preparation 

You are now not just being at home, you are going to go into a warehouse, which means that there are going to be legal documentation in place, there are going to be leases involved and lots of legal jargon which you are going to need to study. For Kev, when it comes to a legal point of view, it was all very foreign to him, but it is all the process of studying, understanding, asking questions about every single clause, that you don't fully understand. Before you go into any type of clause legal contract of any sort, you need to satisfy yourself that you fully understand what you can and can't do, what your obligations are going to be, what you are liable for and every single dot on every single eye every single cross on every single T. You need to make sure that you know exactly what you are doing.

One of Kev's recommendations would be, to check out the FSB (The federation of small businesses). 

What Are Your Systems Going To Be?

How are you going to operate? This is the time for you to think about what your business is going to be like in your warehouse. Right now, you may be at home, in your living room, your dining room, your back garden, or your garage; wherever you are, when you are in a warehouse, this allows you to now evolve your systems and mature your systems. So, just starting to think at this moment of time, how are you going to operate? What systems are you going to have? Right now, it may just be you, or it may just be you and a small team, but, when you have got a team, what are the systems you are going to have in place? What are the different stages of the process? Where are you thinking of having everything?

What Are Your HR Systems Going To Be?

This is from a health and safety point of view - uniform, safety boots, everything from manual handling to accident books, to the signage you are going to need, all from a HR legal responsibility point of view. Start having a real brainstorm and think about this, because it is going to be super important too.

What Is Your Staff Structure Going To Be?

You may be right now, like Kev and Kylie were, operating from home and hiring your first staff member who is coming to your home.

Kev and Kylie moved into their first warehouse, and they ended up bringing that staff member in. But, when Kev and Kylie started to evolve, they started to think: "What is the structure of our team?" "What staff members do we need?" "What are their responsibilities?" 

As you start to build your business, you are going to want to start building some maturity in the business and different roles. To Kev, this is the fun part of actually going into a warehouse and building your warehouse operations, because you are the artist and you are the business owner. So, make sure you think about what the staff structure is going to be.

What Is Your Business Vision?

 What is the ultimate vision going into your warehouse? What business models are you doing? Are you just Amazon FBA, are you going to add Amazon FBM? Are you in online arbitrage, or are you going to go into wholesale? Are you in wholesale already and going to go into trying to find exclusive brand deals? Are you going to launch your own private label brand? Are you going to go out into eBay? Are you going to try launching a Facebook shop?

What is the vision? What is your goal? Because this is going to start allowing you to ultimately have a clearer vision on what you are going to be building. And this starts to build the bigger picture, in terms of putting in that motivation and putting in that drive. 

Whatever you are wanting to do, it is a part of the warehouse considerations and the pre-warehouse considerations. 

Further reading:

 11 Warehouse Success Principles

How To Build Systems In Your Business

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