For many e-commerce businesses, their warehouse plays a key role in the storage, management, and distribution of their products.
There are several different types of warehouses in the supply chain, and they differ from one another in a number of ways. To ensure that your e-commerce business operates in the most efficient, accurate, and cost-effective way, it’s vital that you choose the right type of warehouse.
Here’s our guide to the different types of warehouses for e-commerce.
Private warehouses are privately owned by wholesalers, distributors, or manufacturers. Although these warehouses can be more expensive than public warehouses, they can be a great option for businesses looking for a significant, long-term presence in a particular area.
The main advantage of a private warehouse is that the owner has full control over its operation. They also tend to have more advanced warehouse management systems in place.
Public warehouses operate in a similar way to private warehouses, but they are owned by third-party agencies who then rent the space out to businesses and individuals.
Public warehouses are usually more affordable than other types of warehouses, allowing e-commerce businesses to access short or long-term storage without having to worry about significant capital investment or property tax.
These warehouses are usually more basic than other types, but provide an affordable, accessible option for e-commerce start-ups and small businesses.
Distribution centres are designed to deliver efficient, low-cost warehouse fulfilment. Products tend to pass through this type of warehouse relatively quickly, rather than being stored for longer periods of time.
They are typically used by food sellers and other e-commerce businesses that move their inventory quickly.
Smart warehouses are similar to distribution centres, but even more efficient. Using automation and AI, smart warehouses streamline the warehousing process, using tools such as drones, robots, and software to eliminate manual processes and make packing, shipping, and storing faster and more accurate.
Bonded warehouses are designed to support e-commerce businesses that import their goods from overseas and need to store them duty-free until they have been purchased by customers. Products can be stored in this type of warehouse for longer periods of time without having to pay customs duties.
Restricted items can also be stored in bonded warehouses until their paperwork has been processed.
These warehouses provide more affordable, efficient e-commerce warehouse storage options for smaller e-commerce businesses.
These warehouses consolidate shipments from different sellers into larger shipments, which all get sent to the same place. This means businesses can ship smaller orders more frequently.
Cooperative warehouses are owned by the members of the cooperative. The members can then store their products in the warehouses for reduced rates. Non-members can also store their goods in cooperative warehouses, but they will pay a higher rate.