On-demand warehouse is an online warehousing services platform where users only pay for the space and time utilized for order fulfillment. Companies typically only use the space that is needed for a specified time and do not retain the space in excess. This also gives businesses the ability to scale their inventory and ecommerce delivery services according to consumer demand, allowing them to substantially reduce their storage costs.
On-demand warehousing mostly suits the startups because they typically lack the capital and experience in inventory management. Association with 3rd party logistics provides On Demand services and helps them become more effective in their services at lower costs. However, these resources can be of equal benefit to the MNC, as they can meet their short-term needs during seasonal fluctuation conditions, last-minute adjustments and new product releases.
On Demand warehousing can be used by:
• A Company that has a minimal warehousing budget.
• A Company that has a limited capacity for order fulfilment and handling of inventory.
• A Company which does last minute inventory control and faces seasonal fluctuations.
• A Company that needs consumer demand to efficiently scale up the supply chain in line.
Advantages of On-demand Warehousing
The biggest advantage of on-demand warehousing is probably its versatility. There are many different models out there but the best one is where the warehouse owner acts as a distribution company and manages not only storage, but also ordering, sorting, choosing, packaging, shipping and more. This gives you the freedom to decide exactly what you want to handle, and exactly what you want your fulfillment partner to handle. This is a game changer for many business owners’ particularly small business owners looking to develop and expand.
2. No Rent of Warehouse
If you were to rent a warehouse on your own, then you would need to pay a whopping monthly cost which is simply not feasible for a small business proprietor. But if you use on-demand warehousing, then this problem gets addressed as you will get an option to store your inventory for a short period – typically five months to one year – and in some cases, without any contractual term at all.
3. More Security
Storing costly goods has many downsides, including security risks, staffing costs and support systems. When you have your own warehouse, you have to make sure that no one is able to break in and steal your goods. Costs continue to increase as you need to invest in security personnel and warehouse-protection systems. On the other hand, when renting an On-demand warehouse, the rental’s fixed cost already covers the cost of protection, so for the storage price, you also get a high level of safety.
Therefore on-demand warehouses prove to be a good choice for startups and SMEs, and provide unparalleled flexibility. It even helps users to monitor their distribution of goods and delivery to consumers without having to invest in warehouse equipment or skilled labour.