Are you a logistic professional, supply chain manager, or business involved in international trade and looking to understand the various options and considerations for your warehousing needs? If so, this guide has everything you need to know about international warehousing.
For businesses looking to expand their reach, reduce delivery times, and improve customer satisfaction, international warehousing is a safe and affordable way of storing and distributing goods abroad.
In today’s global supply chain, it is important that businesses enable themselves to reach new markets overseas. International warehouses allow businesses to import, store, and ship to audiences in countries abroad and expand their global reach while ensuring timely deliveries, reduced transportation costs, and improved customer experience.
Keep reading to find out the different types of international warehousing, and the benefits and costs associated with international warehousing.
What is an international warehouse?
An international warehouse is a storage facility located in a foreign country that stores and distributes goods for global trade. This ensures efficient delivery of products to customers abroad and overseas by centralising supply.
International warehouses are appealing to logistic professionals, supply chain managers, or businesses involved in international trade as they enable lower shipping costs, faster delivery times, and a smoother customer exchange to boost customer satisfaction.
For global businesses, international warehouses act as a central business hub. They are typically located in major trade centres in countries other than the seller’s origin near reliable transport links and routes.
Types of International Warehouse
There are many different types of international warehousing, performing many different functions and services to suit the unique needs and requirements of a variety of global businesses.
Public warehouse
A public warehouse is a warehouse storage facility managed by a third party. Space can be rented for long or short-term depending on demand and requirement.
This is a suitable warehousing solution for businesses that experience seasonal surges, require temporary warehousing, or do not want to spend money to build their own warehouse facility.
In a public warehouse, a diverse range of businesses pay to store their goods and products alongside other vendors.
Private warehouse
Private warehouses are privately owned and operated by distributors, manufacturers, and wholesalers. This type of warehouse provides companies with control and flexibility over decision-making and business operations in the facility.
A private warehouse is often used by big retailers who store bulk and excess inventory. Organisations with private warehouses need their own employees, software, and equipment to operate efficiently and effectively.
Bonded warehouse
Bonded warehouses are a secure space for businesses to store goods liable to pay import duty and VAT. Custom tax and VAT on goods and products stored in a bonded warehouse are deferred until goods are sold or removed from the storage facility.
This is a long-term storage solution that helps businesses and retailers improve cash flow by delivering goods closer to their final destination and postponing duty payments.
Distribution centre
A distribution centre is a logistics building designed to store products and perform order fulfilment and packaging tasks. Goods in a distribution centre are often redistributed to the retailer or directly to the consumer.
Additionally, distribution centres also offer value-added services such as product mixing and cross-docking to efficiently meet customer requirements.
Fulfilment centre
Fulfilment centres are an important link in the supply chain that assists businesses in managing inventory, order processes, and the overall customer experience. A fulfilment centre is operated by a third-party service provider who processes, and ships products customers have ordered.
This type of international warehouse allows businesses to outsource warehousing and shipping requirements.
Benefits of an international warehouse
International warehousing allows businesses to enable business expansion by reaching and trading with new markets overseas. By streamlining business operations and the supply chain, international warehousing provides businesses with the warehouse storage solutions they need to operate international trade.
This is achieved by strategically locating storage solutions near transport links and target markets to receive, store, and distribute products and goods to customers quickly. As a result, businesses can also save on shipping costs and provide customers with a fast and efficient service.
By enabling better order processes, international warehouses also have the power to improve customer satisfaction and experience.
Cost of an international warehouse
The cost of operating an international warehouse depends on a variety of factors such as size, location, the type of goods, the type of facility, and the duration for which the products will be stored.
If you are storing large items, you will need more space than if you are storing small items which should be taken into account. Additionally, it is important to factor in the running cost of equipment and how often you will need to access inventory.
When considering whether international warehousing will be beneficial to your business, it is important to consider the influencing factors. Variable costs such as labour, utilities, maintenance, supplies, and even packaging, should also be accounted for when calculating the cost of running an international warehouse.
If you are just starting to trade internationally, it is often cheaper to rent a space in a public warehouse than it is to buy and operate a private warehouse facility. However, while private warehousing is a large initial investment, it is considered cost-effective in the long term.
How Optima Warehouse Solutions will help
At Optima Warehouse Solutions we provide cost-effective warehouse solutions and software for all kinds of businesses.
Established in 2001, we focus on providing high-quality yet affordable warehouse management software systems for warehousing and logistics companies, as well as WMS solutions to other sectors such as packaging, manufacturing, and e-commerce.
With excellent knowledge of the complexities of today’s busy warehousing environment means that we have developed easy-to-use yet powerful Warehouse Management Software packages that will make your warehouse more efficient.
To find out more about warehouse operations and how Optima Warehouse Solutions can support your business, get in touch today!
