How Big Should My Warehouse Be?

Picking the size of your warehouse is one of the trickiest and most important decisions a business owner can make. Too small, and you might not have enough space to grow. Too big, and you might be paying for square footage that you don't even need. So what's the magic formula? 

There's no simple answer to this question, but fortunately, there are a few things you can consider to help make the decision easier. Let's take a look at some of those factors now.

Typical Warehouses

Typical warehouses used to be under 10,000 square feet. However, today's specific storage unit in the United States is more than 25,000 square feet. Approximately a third of warehouses are smaller, and more than half of all current warehouses are 50,001 square feet or greater.

Small Warehouse

eCommerce enterprises frequently employ remote warehouses (generally fewer than 25,000 square feet) as cost-effective storage sites. They let company owners keep merchandise in less-than-ideal locations.

Large Warehouse

Importers, exporters, producers, and wholesalers typically employ large warehouse operations (those with more than 100,000 square feet). Larger structures are frequently found in industrial parks or on the fringes of cities or ports. To give convenient access to roads and loading docks, these more enormous structures are commonly positioned in industrial parks or on the outskirts of towns or ports.

We've put together suggestions to help organizations determine the right size for their future warehouse or distribution center.

What Is The Size Of Your Present Facility?

It makes it logical to consider the size of your present facility as a preliminary step for the conversation when deciding the size of your future facility. How much room do you have right now? Are you making the best use of that area, or do you believe any improvements might be made to make it more efficient? Do you think your existing facility has plenty, too little, or the proper storage?

It's vital to remember that this fast method isn't adequate to determine the ultimate size—it should only be used to get a general estimate at the start of your talks and planning.

What Is The Average Amount Of Inventory You Have In Store At Any Time?

For understandable reasons, this is a crucial point. The quantity of stock your company needs to continue in business will determine how much of your new facility's space is utilized.

Consider whether there are many methods to make optimal use of the space after you better understand your existing inventory requirements compared to what you're doing now that you've set aside for inventory.

Consider The Steps That Your Inventory Passes Through Before It Is Dispatched

From the time they arrive until they are sent as part of an order with one of your customers, items go through a certain number of procedures in every activity. These procedures will decide how much of your new warehouse's area is used; as a result, understanding the inventory movement is crucial before deciding on a plan or building size.

So, How Big Do You Think Your Company Will Grow?

Because of a rise in demand, you're likely preparing to relocate to a new warehouse. Your company is expanding, and you want more space to handle more inventory and procedures. When moving to a new building, it's critical to keep business growth in mind, since if you don't, you may rapidly outgrow it, necessitating a redesign, extension, or the construction of a new facility - all of these are expensive.

It may be to your maximum benefit to relocate into an enormous warehouse ahead of time if there are clear indications that your firm will develop quickly. If your expansion will be modest, it makes it more logical to relocate to a warehouse that can accommodate your current stock.

Conclusion

The size of your warehouse is one of the trickiest decisions a business owner can make. Too small, and you might not have enough space to grow. Too big, and you might be paying for square footage that you don't even need. So what's the magic formula? There's no simple answer to this question, but fortunately there are a few things you can consider when making the decision easier on yourself. Let’s take a look at some factors now!