Public Warehouse versus Private Ones

Public Warehouse versus Private Ones

There are several reasons which make a company select a public warehouse over a private one or vice versus. Many small or middle sized businesses do not have the extra monies to have their own storage facility, so their best and/ or only choice for their overstocked merchandise is to contract a 3rd party warehouse facility. This gives them the opportunity for growth and/ or expansion while at the same time the extra space needed with a warehouse staff available to properly man this inventory. However, large corporations, such as Wall Mart and Kmart have the revenue available to have their own warehouses, thus keeping its revenue, from the initial supply to the process of distribution, in- house. They have their own trucks that transport goods from one location to another, etc. The above reasons for using a public or private warehouse have to do with the size of the company needing the storage and its amount of revenue on hand that can be used to either lease a public facility or own a private one. This factor makes all of the difference.

For those giant conglomerates, it is more convenient to keep all inventory on one of their locations, where as much smaller businesses, especially ones within a metropolitan area, do not have the extra space needed for added inventory, which can easily stack up, especially during a holiday season, such as Christmas. This is when a short term warehouse lease must be contracted. This can make a difference between the ability to expand and the need to turn business away, due to “lack of space” which is needed when ordering extra merchandise. Smaller business not only has little space, but also do not have adequate staff to deal with the functions related to the storage and/ or distribution of the inventory.

The larger corporations who have their own private warehouse facilities can use innovative and cost cutting methods when developing and/ or successfully completing their supply chain. It is thought that a company, who keeps its inventory in- house, may have more interest in the safety and condition of its goods. However, in actuality, whether or not this is true, lies within the dedication of the public warehouse’s staff and services toward its contracted clients.

When examining public warehouses, versus private ones, one must remember that suitability lies within the individual company’s assets and reeds.

inventory asset management

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