On-Demand Warehouses – A Risky Investment or Lucrative Business After COVID-19?

Almost every business all over the world has been impacted by COVID-19 – the UK being no exception. From the airline industry to restaurants, salons, retailers, the energy sector, and more, almost every industry has seen a significant drop in business.

Supply chains have been disrupted, but one aspect in this industry that remained steadfast was storage. Warehousing has managed not just to stay afloat but actually thrive as corporations with excess inventory rush towards them. From refrigerated warehousing solutions to normal ones, they’ve all seen high demand.

on-demand warehouses

In 2020, the global market value of the warehousing industry is estimated to be at £15.8 billion and is expected to grow over time. The COVID-19 lock-downs saw little to no downfall in their revenue.

This means that having invested in on-demand or smart warehousing solutions during the pandemic would have been a great investment. But what about in a post-COVID-19 world? Would having a warehouse fare well for you? Or would you be better off using an on-demand warehouse that is scalable as per your requirements?

Buying a Warehouse Post COVID-19

Nobody saw such a massive breakdown of supply chains on a global level coming and therefore, manufacturing continued as usual. And then the demand for products reduced.

Now, as things have started coming back to normal, demand for products and services is also returning back to the norm. This means that the rapid increase in stock seen in February and March will now decrease as inventory starts rolling out. Organisations can further increase demand by offering discounts or quick or same-day deliveries.

If you buy a new warehouse right now, chances are that you’ll end up having space that you won’t be using. Even when demand comes back to normal, you’ll have purchased a new storage space that wasn’t really necessary back then – how will it be used now, right?

On-Demand Warehouses Post COVID-19

Then there is the option of going for on-demand warehouses.

Some businesses might have purchased warehouses for storage purposes, some may have filled their existing storage facilities to the brim. In both these cases, normalcy means that you might have to distribute inventory, either to sell those extra warehouses or to make room in existing facilities – at least enough to make operations safe.

On-demand warehouses are a rather cost-effective option whatever your needs are – and when you combine it with your excess stock after COVID-19, or even consider their flexibility, you get the perfect package. Here, you’re only paying for what you need – nothing more.

As your inventory continues to decrease, the costs associated with storage also decrease, making this one of the best options a business can go for. Yes, you might have to pay rent, but this option is much better than having to pay a hefty amount to buy a storage place.

Abandon the FIFO (First In First Out) or LIFO (Last In Last Out) model you adopt and consider emptying the rented place out first to further make the most out of your investment.

If you’re looking for more information on how this works or are ready for on-demand warehousing solutions, LogistCompare is here to help. Get in touch today and we’ll help you make a no commitment decision.