The Difference between Dedicated and Shared Warehousing

When running a business that has warehousing needs, you are faced with the option between two types of warehousing services. You can go for dedicated warehousing or shared warehousing. The next probable step is to choose which solution suits your business needs.

In dedicated warehousing, an individual company has control over the warehouse. You can choose to run it or have a  Tenaxx logistics company to manage it as you concentrate on your company’s core businesses.

Whereas, in shared warehousing, each client has a say in the issues concerning the warehouse that they use. Before making a choice, you have to understand the properties of each selection.

Dedicated Warehousing   

  • You alone will cater for the costs of running the warehouse. From labor, equipment, insurance, rent, skills, technology, etc. It is a fixed cost that remains constant throughout the year.
  • You call the shots, on the space, and specify how the warehouse will run. Your company has control and reign over the operation of the area.
  • The financial cost of running the warehouse is static and does not depend on the amount of space that you use or volume of orders.

Shared Warehousing

  • You will share the cost of running the space with any other company that shares the facility. Thus the price can vary from time to time.
  • The costs you incur will depend on the volume of goods and amount of services that your business utilizes.
  • Tenaxx logistics runs the facility on behalf of the businesses, and costs get adjusted based on cyclic and seasonal fluctuations.

There are many factors to consider when choosing a warehousing solution that is optimal for the needs of your business. You have to look at the size of the facility, expenses, daily operation, volume of goods, among other things. For a company that deals with short-term distribution requirements, shared warehousing may be the right solution for you.