6 way to lessen Warehouse expenses for startup

Resource Description

Running a warehouse isn’t cheap. The cost of rent, labor, and utilities makes you want to stop time while you hustle to meet a target income before the next due date comes in.

Apart from chasing sales, it would be good for your revenue to cut some expenses. With a few practical moves, you can stop the costs from reaching all-time highs without sacrificing efficiency.

Here’s how to keep your warehouse budget under control.

#1 - Optimize Your Storage Space

Renting a bigger warehouse without an ROI forecast or proof is a waste. For a few months or years, stick with the space that you have and make better use of it.

Without expanding, you can stock more inventory using taller shelving. You can also use narrow aisle racking to fit more pallets into the same area. A planned arrangement of stock, where high-demand items are easy to reach, saves you time and space.  

If you have exhausted all optimization efforts, that's when you can probably say you're ready for a bigger space.

#2 - Rent Equipment Instead of Buying

Warehouse equipment isn’t cheap, and startups don’t always have the budget for brand-new gear. Instead of buying everything upfront, consider renting.

• Forklift hire lets you get the equipment you need without a huge investment.

• Leasing pallet jacks and reach trucks helps avoid maintenance costs.

• Short-term rentals let you scale up during busy seasons without overcommitting.

When cash flow is tight, renting makes more sense than taking on big upfront costs.

#3 - Reduce Energy Costs

Electricity bills can eat up a huge chunk of your budget. Cutting energy waste keeps those costs down.

• Switch to LED lighting to lower energy use.

• Use motion-sensor lights in less active areas.

• Install high-efficiency fans and insulation. This will reduce heating and cooling expenses.

#4 - Automate Where It Makes Sense

Automation doesn’t always mean replacing workers with robots. It simply means using tech to make repetitive areas of operations more efficient while the staffing is channeled to aspects that require better judgment.

A good example of this is using a warehouse management system to reduce errors in tracking inventory. More innovative warehouses have barcode scanners for faster and more accurate order picking. Meanwhile, automated conveyors reduce manual handling, saving time and labor costs.

Even a little automation can improve productivity and lower expenses in the long run.

#5 - Buy Used Equipment

Brand-new equipment is nice, but it’s not always necessary. If you need to own equipment, buy used instead of new.

• Used forklifts cost way less than new ones and still get the job done.

• Second-hand shelving and racks work just as well as brand-new ones.

• Refurbished pallet jacks and carts are much cheaper than fresh-out-the-box models.

Do your research and buy from reliable sellers. A well-maintained used forklift can last years without issues.

#6 - Cut Down on Wasted Space and Time

You’re losing cash with frequent back and forth. A well-organized layout keeps things running efficiently.

• Store high-demand inventory near packing areas to reduce travel time.

• Set up clearly marked zones to keep everything in the right place.

• Train employees to follow efficient picking and packing routes.

• A few layout tweaks can shave minutes off every task, which adds up to big savings.