Finding the Optimal Way to Store Your Products

When you own an online business, one of the questions that come up very quickly is, “Where will I store my products?”

Anyone selling physical products knows that proper storage can be the difference between a successful and unsuccessful store.

Think about it: If you don’t have sufficient space to store products at home, you could easily get frustrated when you’re trying to ship orders. Or if you’re working with an unreliable third party, you could disappoint your customers when their orders get lost.

The optimal product storage solution is different for each retailer, but in this post, we’ll look at some storage possibilities that will help you determine which is best for your unique operation.

Store Your Products at Home

For some retailers, storing products at home is the best way to keep track of them. With your products on-site, you can oversee quality control, manage inventory, and ship orders quickly without having to coordinate any external processes.

However, it’s important to first determine if your in-home space can meet your product storage needs:

Make sure your products are stored in an appropriate environment

If your products are perishable, be sure you have the right amount of climate-controlled space that will ensure your merchandise doesn’t spoil.

You should also make sure your storage space isn’t prone to leaks, dampness, or smells that run the risk of damaging your products.

Make sure you have sufficient storage space that’s clean, dry, and odor-free. Consider using storage bins to additionally safeguard products safe from these types of risks.

Have sufficient space to organize your inventory

If you’re storing products at home, keep products organized by size, color, or product type, etc. to make the order-packing process simple and fast.

This will also help you see when certain products are getting low and will need to be re-ordered. With a designated area that’s devoted to organized product storage, you can also help ensure you don’t waste time hunting down products within a messy pile.

Make sure your storage space is easily accessible

If it’s a headache every time you have to pull products out of home storage, you’re very quickly going to get tired of packing orders and maintaining your store.

Often times, this means high storage shelves or hard-to-reach basement or closet storage is not a good option for products you need on a regular basis. Your home storage space should be easy to get access to the products stored in a way that makes packing orders efficient and hassle-free.

With these three factors in mind, you can better decide if home storage is a wise choice for your business. If you feel that off-site storage might be a better option, there are various ways to approach that as well. Let’s explore those next.

Read also: Ecwid E-commerce Business Blueprint: Build Your Successful Online Store

Renting Space to Store Your Products

Off-site storage is a good option for products that you don’t currently need. For example, if you sell seasonal merchandise only during certain times of the year, storing off-site frees up some home space when you don’t need those items.

The costs associated with your storage space will vary based on the size of the unit, the location of the storage facility, and other special features you’ll need — such as climate control and an indoor vs. outdoor unit.

In the U.S., the average national storage unit costs are:

• $40-$50 per month for a 5-by-5-foot unit
• $75-$140 per month for a 10-by-15-foot unit
• $115-$150 per month for a climate-controlled 10-by-15-foot unit
• $95-$155 per month for a 10-by-20-foot unit
• $170-$180 per month for a climate-controlled 10-by-20-foot unit
• $225 per month for a 20-by-20-foot unit

Some quick math on this

If you were renting a 5×5 ft unit for 6 months at $45 per month, your annual storage fees would be about $270. If you needed a climate-controlled 10×20 ft unit for 6 months, at $175 per month, you’d be looking at total storage costs of about $1050.

In many instances, you can store products off-site for less than $1000 per year if you only need to store products for part of the year. This option can be an affordable way to keep products securely stored during those off-season months.

If you’re not going to be selling a portion of your merchandise for several consecutive months, you could also consider renting a mobile storage unit. This is a storage unit that is dropped off for you to fill, and then is relocated to the company’s secure storage facility.

Typically, these storage pods range in size from 10ft x 10ft to 10ft x 30ft and are guaranteed up to $100,000. Costs for drop off and delivery range from $500-$700, plus $5-$15 per day for storage.

The math: If you stored off-site with one of these storage pods for 6 months (averaging 30 days per month) at $10 per day, with an average $600 drop off and delivery fee, you could expect to spend about $2400 total.

This option is not cheap, but it’s another convenient option for safely storing your products off-site when you don’t need them (without the hassle of lugging products to an off-site storage facility.)

Read also: How to Move Your Brick and Mortar Store Online: A 5-Step Guide

Drop Shipping

If you don’t want to keep your products in stock at home or in a rented space, another option to consider is dropshipping.

Drop shipping allows the retailer to ship product orders directly from the third party supplier to the customer (without ever having to handle the product.) Typically, this third party supplier is the wholesaler or manufacturer that produces the product.

However, there is a unique set of pros and cons to consider with this model.

Pros:

• Lower startup and overhead costs, as you’re not investing in a large amount of inventory
• No over-stocking–you only ship what’s been paid for
• No fees associated with rented space for storing products
• Packing, shipping, and returns is taken care of for you
• No re-stocking or tracking inventory

Cons

• Inventory management depends on reliability of third-party supplier
• Complex shipping schedules and cost calculations
• Supplier mistakes are out of your hands — less overall control over inventory
• Low margins
• Poor customer service from supplier
• Unable to monitor product quality or develop personalized packaging

Depending on the needs and limitations of your unique business, drop shipping may (or may not) make sense for your business. Just remember to consider the pros and cons and decide based on your product needs.

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