Warning Before You Move Your Amazon FBA Business into a Warehouse

If you are currently considering moving your Amazon FBA business into a warehouse, then this is the blog post for you, because we are going to be talking about a brand new heads of terms for a new lease, a brand new contract, for a brand new warehouse. And I am going to be sharing with you everything which Kev has learnt over the last 5 years - moving into two different warehouses. 

Since 2015, when Kev first started his Amazon business, Kev had the ambition with Kylie to move into a warehouse. They wanted to quit their jobs and get out there; they always knew this, but at the time everything is new, and is in the unknown, what do they need to think about in terms of leases, contracts, profitability, expenses, what do they have to think about with the different charges involved. Kev and Kylie have now navigated their way through, and I am going to share everything with you!

Are You Really In Need of a Warehouse?

This was Kev last year. When Kev and Kylie first moved into this warehouse, they were in need of space, because they were at home - they were at home in their living room, and things were getting really busy. Kev and Kylie were in their living room, dining room, outside in the patio, and they felt that they were extremely busy. But, when they moved into the warehouse, it had a vacuum a effect, it had shared with them that they had to really scale to that next level.

So, the first thing that I would say to you, are you really in need of going into a warehouse? And what I mean by this is - is this really something that you are wanting do do? Because when you do it, and when you take action, you may sign a lease, and come into a warehouse with new responsibilities, such as employment, you have got the profitability in your business and the expenses in your business - there is a lot of things to think about, and it ultimately comes down to what your goal is. 

What Is Your Goal

Back in 2016, this was Kev and Kylie's goal. Their goal was to get to the point where they had so much going on, to the point where they were filling up their warehouse, and to the point where they had nowhere to walk. Your goal has to be like this. You want to go into a place which gives you growth, which gives you 2,3,4 years of growth. So that means you want to push yourself, but not too far. You don't want to go from your living room to a 10,000SQFT warehouse - it makes no sense to do this, because it is a building process. 

Learn more on goal setting here: https://www.systemisefulfilment.co.uk/blog/goal-setting-for-10-000-per-month-sales

This was 4 years ago. This was before they had shelving. Before Kev and Kylie had shelving, they had trays. This was the beginning of their systems - this was the original system that they had. And over time, what they have done is just developed and grown. So, if you are looking at getting a warehouse, think about this. Think about how it will allow you to grow and to build step by step.

Once upon a time, it was like this, where Kev and Kylie didn't even have cardboard skips or even containers for waste, it was all just in the background, and Kev had to keep going to the skip. But now, it has got to a point where they are really busy again, and now it is a case of wanting to grow and get to that next level. 

So, now, Kev found this. Is this their next move? This is the current warehouse which Kev and Kylie were looking at. This warehouse is 10,000SQFT, which is around 5x bigger than the warehouse they are currently in, and there are a lot of things to think about.

How to Find a Warehouse

Firstly, if you are looking for a warehouse right now, you either go to an estate agent, look online for what you can potentially find, or you have a drive around to see what you can potentially buy. Kev found this warehouse by driving around and being resourceful, they found this place, saw it was empty, then went across the road to thing out - there warehouse was then theirs within a week. This is being resourceful. 

For the warehouse on the image above however, it had to go through an estate agent, because it is a much bigger property.

If you would like to learn more on finding the right warehouse, click here: https://www.systemisefulfilment.co.uk/blog/How-to-Find-the-Right-Warehouse

Rent

So, what you want to be thinking about is what is the rent. You have got to think about all the different charges. Depending on how big of a unit you are looking at, there may be business rates, there may be service charges, which basically means that it is looking after the industrial estate, so you need to look at the lease and the contracts, because it is going to have that information. You have got to think about your insurance. This will also have insurance, so there is some obligation there in terms of the structure insurance, so there is rent, business charges, service charges, insurance and things to think about. Then you have the internet to think about; what are the utilities? Is it gas? Is it electric? You have got to think about all the charges involved.

Security 

What are some of the things you are going to want to think about in terms of security? You can have cameras, wireless cameras, monitoring system, and keep on investing in this so that it increases your security as much as possible. You may not need that to begin with, but over time, you are going to want to protect yourself, so you are going to want to have security. 

Leases 

The lease will have the heads of terms, it will have different sections, such as the property, the address of the lease itself, what type of property it is, it shares the details of the landlord, it shares the details of the tenant, you may have a bond and deposit as well, then you have got a permitted use - what is this allowed to be used for? There is a lot of information on the leases.  

Further reading:

How To Achieve Goals - 3 Tips To Ensure You Achieve Them

How You Can Open 3 Wholesale Accounts In 24 Hours

How to Make Your Business Easy to Sell