An overflow warehouse provides warehousing space to businesses when they have more products in stock than their current warehousing solutions can handle.
These warehouses are typically used by manufacturers with excess inventory, but they’re also great options for e-commerce businesses that have slow-selling products or seasonal product lines that aren’t needed year-round.
For the right business, these warehouse locations offer many benefits, including cost savings and streamlined shipping options.
In an e-commerce business, one of the biggest challenges can be trying to keep your inventory in sync with customer demand.
If you’re not careful, it’s easy to end up with thousands of dollars’ worth of inventory sitting in your storage area that you can’t sell because you already have too many product in stock and you don’t have time to add more products to your store.
An overflow warehouse can help to alleviate this pressure by providing you with extra storage space where you can quickly store any additional items that you need without impacting the rest of your inventory.
What is an Overflow Warehouse?
An overflow warehouse is a place where you can store the items that are not being sold on your website. This helps keep the products fresh on your site and also prevents people from having to search through a large number of items they do not want to find what they are looking for.
It can also be used as a backup in case there are any issues with your shipping facilities or if you have run out of space at your main warehouse.
The best thing about overflow warehouses is that it only costs money to maintain it, so even though it does cost more than storing all your stock in one building, it should still save you money in the long run.
What Does an Overflow Warehouse Do for Your Business?
An overflow warehouse allows you to receive more shipments of products than your main warehouse can store.
This is a good idea if you are expecting a large number of deliveries, or if you are storing fragile items that need to be kept away from the public eye.
There are many benefits to having an overflow warehouse:
- First and foremost, if you are a new seller on Amazon, you will most likely not have the luxury of using their warehouses. Getting an overflow warehouse will be of great help in this case. You can have your goods delivered straight from the manufacturer to the overflow warehouse, saving time and money.
- Your storage costs will also be lower because you’ll be using less space
- You can reduce shipping times for customers and get goods out quicker – perfect if there’s a rush on a certain product!
- An overflow warehouse has the potential to increase sales as well
There are plenty of reasons why you should have an overflow warehouse in place when running your e-commerce business.
How An Overflow Warehouse Can Optimize Your Inventory Management
Having a warehouse can be beneficial because it protects your inventory from theft and damage, which can happen if you keep your inventory at home.
Having a warehouse also means you have room to store more products, so you can carry more types of products, which increases your customer base.
Another great reason for having a warehouse is that it will allow you to better track your inventory. By knowing how much is in the warehouse and the number of items being sold per day or week, you are able to better assess when and what needs restocking on the website.
Finally, having a warehouse will allow you to have an overflow point in case things get too backed up with customers trying to order online.
You also benefit from quicker fulfillment. With a warehouse, products are stored and ready to ship at any given time.
When you order something from a retailer, the product is sent to your front door; this might take up to 10 days depending on how far away you are from the warehouse. But with online retailers, it’s possible that the product is shipped immediately because of their proximity to the warehouse.
An overflow warehouse is a physical storage space that you lease to store products. It’s typically somewhere close to your business since you’ll need to transport goods back and forth to fulfill orders.
By using an overflow warehouse, your e-commerce business will be able to access more storage space, which can lead to increased production and efficiency.
Plus, it means that you won’t have any downtime caused by running out of product or not being able to find the right size due to limited inventory.