How to find the best warehouse for your ecommerce business

How to find the best warehouse for your ecommerce business

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Welcome to Chez Stephen! Do you have a reservation for this evening? Please enjoy a drink in the bar area — we’ll have your racks and bins ready for you in no time at all.

Hotels have ratings. Restaurants have the Michelin Guide. But nobody has written a book on warehouse standards. You can’t flick through the pages of the Good Warehouse Guide and get an immediate sense of what to expect.

It’s haphazard. It’s inconsistent. It’s widely varied. As a result, there’s no single route to finding the best warehouse. It’s about tracking down the option that gets closest to the location, service, and price you want.

So, where do you even begin? That was the dilemma facing me as I started my search, and which was neatly summed up by crashing my rental car in the middle of a Swedish forest en route to one warehouse (more on that later).

So much more than big sheds

You hear 'warehouse' and think: ‘Big shed. Receives stuff. Stores stuff. Sends stuff. Easy.’ I quickly realised my warehouse know-how was severely lacking.

As with businesses in all sectors, many warehouses are resistant to change and, to keep things running smoothly, stick to very rigid rules. For dropshipping (which is what I initially thought I would be doing) and customisation, it would need to be a particularly flexible, forward-thinking warehouse.

Without a trusted source for recommendations, you have to take an approach that will later prove to be either proactive or scattergun. It just depends on how well it goes.

Like a detective who has found nothing of interest at the crime scene, I started leaning on my network for potential leads. I also made myself easy to contact via social media in the hope that any equally proactive, digitally-minded kindred spirits in the warehousing industry would find their way to me.

How to build your knowledge and start your research

  • Start spending 30 minutes each day getting to grips with buying warehouse space and what you need from a warehouse
  • Launch into an inevitable succession of Google searches
  • Reach out to colleagues or peers — create a Slack group as a sounding board
  • Open up your DMs on LinkedIn and your business socials and tell people what you’re looking for
  • Use Facebook groups, business forums, and local entrepreneurship groups to widen your search and get advice

Making contact with warehouses

You know in a movie when you see a character being strung along by a love interest and you wonder why they don’t just take the hint? I didn’t want a warehouse that was going to play hard to get.

I started emailing several warehouses to see if they would respond and how long it would take them. If a warehouse gave me a phone number where I could get hold of them for a chat, it felt like a positive sign that they would be easy to contact if something went wrong further down the line. This was all part of the audition process, even if they didn’t know it or didn’t care! When a warehouse replied, I would arrange a call.

One warehouse was more than 30 minutes late for our initial discussion. The person apologised and said all the right things, but those early encounters shaped my opinion. If a logistics company allows someone to be 30 minutes late for a meeting, how could I be confident that my deliveries would be handled on time?

Some warehouses were great, but their ways of operating didn’t work for what I needed. Only a few asked the sort of questions that created the impression they were genuinely interested in making their services work for me. A couple followed up our call by email even though we’d realised we weren’t the right fit on this occasion, which I appreciated.

Your initial call with a warehouse

Apart from creating those first impressions, your initial call with a warehouse is about getting as much information as possible in the shortest time. One thing I never appreciated before starting this process is that nobody puts what they can’t or won’t do on their website. So even if you’ve loved everything you’ve seen about a particular warehouse, always get confirmation regarding the things you need.

For me, this often related to questions regarding packaging. Could I have branded packaging? What is ‘the packaging’? Is it just the tape? Is it the actual box?

I also had a steep learning curve with Incoterms – the series of standard commercial terms that define who is responsible for what at each stage of the shipping process. I had no idea how they worked.

When I realised Incoterms could make the shipping company responsible for any risk up to the warehouse door, and my insurance would only cover inside the warehouse, I had nightmares about rain-drenched products sitting outside the warehouse all weekend. At that point, I made all warehouses explain their use of Incoterms to me with a level of complexity they might choose when discussing it with a five-year-old.

8 things you need to know about any warehouse

From my experiences so far, to get an immediate snapshot of any warehouse for a useful like-for-like comparison, the answers to these questions will be useful:

  1. What are you paying for?

There is no standard warehouse service package, so what are you getting?

  1. Where is the warehouse located?

Double-check this because it could have implications for your taxes and your logistics.

  1. What are the shipping brokerage and import arrangements?

Find out if you or the warehouse is responsible for this. If it’s the warehouse, ask for a rate card.

  1. Which Incoterms are used?

Under which Incoterms will your inventory be shipped, and what happens in the event of a hiccup with a shipment? Read and re-read your Incoterms.

  1. How are storage prices calculated?

Some warehouses charge per bin, some per sq ft, and some price per pallet. Find out how your storage will be charged.

  1. How are charges for kitting, picking, and packing your products calculated?

When and how will you be charged for moving each product around and out of the warehouse?

  1. What are the barcode requirements?

What does the warehouse need to store and pick your products, and will this match your barcoding approach?

  1. What customer service arrangements are in place?

Does the warehouse maintain an open line of communication, and how would disputes be resolved?

Visit any warehouse you’re considering

When you’re running an ecommerce store with its tech stack, digital ads, online community, and third-party logistics, it’s easy to forget that your business doesn’t exist solely through a screen.

Warehousing is an area where your business depends on real people doing their jobs well. It's worth investing the travel expense to ensure a warehouse looks and operates like the sort of place you want to be responsible for your products.

Unfortunately, it was during one of these visits that I had an argument with a bollard on a beautiful Swedish backroad en route to the frighteningly appropriately named Valhall Logistik. My rental car called the emergency services, but luckily I emerged unscathed to visit the warehouse. Like many a Norse god, I (almost) died and went to Valhalla.

Despite my near-death experience, the trip was worthwhile (Valhall is now my EU warehouse). Building a relationship with the people who will store your goods is crucial.

When you have your own shortlist of warehouses, arrange to visit them and pay close attention to:

  • Working conditions — are the staff happy, and do they have access to sufficient lighting, ventilation, and hygiene facilities?
  • Security — does the warehouse deliver on its security promises, and can it provide documentation proving these safeguards?
  • Management — speak directly with senior staff to get answers to your questions and a feel for how they do business

Rate the contenders

Now you can start to narrow down your search. You could do a simple pros and cons list or create a spreadsheet. My approach was to use a traffic light system, rating every aspect of the warehouse as red, yellow, or green against my requirements.

Green

All systems go! I’m not sure a warehouse that delivers green across the board exists. If you find it, review it carefully because I’d be very suspicious. In my experience, a warehouse with a couple of self-acknowledged flaws is probably more genuine.

Yellow

A warning. Something isn’t quite right. Maybe there’s a lack of tech in use. Perhaps the warehouse can’t do branded packaging. At three yellows, I’ll know this isn’t the right warehouse for my business and move on.

Red

Half-an-hour late. Poor facilities. Disgruntled staff. Badly stored products. No security. No other customers! Any worrying things that take you straight to ‘no’ get a red.

Read and re-read your warehouse lease before signing

When you think you’ve found your warehouse and you’re ready to sign a contract, read it. Then read it again. And one last time to make sure.

This is not a cookies pop-up or a 12-month phone contract. It’s a document that sets out the obligations of an important cog in your ecommerce business (and your obligations to them). Don’t sign by default.

  1. Skim through and highlight anything you don’t understand
  2. Read through again in more depth — ask the warehouse for clarification on anything you still don’t get
  3. Read a third time with the benefit of the extra clarification and context

If something in the contract is different from what had been discussed or from what you need, this is the time to raise it. You can negotiate the terms of the contract. The warehouse is free to say yes or no; you are free to take your inventory elsewhere.

When you’re happy with the warehouse agreement, always seek professional legal advice before signing.

Get ready to sign on with a warehouse

That’s the process I followed. You’re now ready to start finding the warehouse where you’ll house your wares! Remember:

  • Do your research — build your knowledge, make connections, and start to ask questions
  • Visit warehouses — there’s no substitute for seeing a warehouse in operation and getting a feel for the place
  • Take contracts seriously — make sure the services you expect your warehouse to deliver are there in the paperwork
  • Trust your gut — intuition is important
  • Keep your notes — you’ll save yourself a lot of time if you need a new or additional warehouse in the future

What’s the biggest warehouse red flag you’ve come across? What are the top considerations in your search for a warehouse? Let me know by sending an email to community@juni.co.

How to find the best warehouse for your ecommerce business
Stephen Bourke
Ecommerce Store Manager

Stephen has over 4 years of experience running businesses and assisting entrepreneurs with Shopify stores. When he's not setting up shop, Stephen enjoys a good board game with his husband and friends. He's known for trying adventurous vegan cuisines.

Download our free whitepaper and gain important ecommerce and marketing insights, directly from Juni.

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Juni will not share your information with any third parties except for our verified partner network. Submit your email for even more valuable content, delivered straight to your inbox.

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