What to know before starting your own warehouse

By Oleg Mikhailenko
Published in Solutions
July 22, 2022
3 min read
What to know before starting your own warehouse

Have you ever wanted to own a warehouse? Your own warehouse? Starting a warehouse business is something that’s difficult, to be sure, but can reap excellent rewards later on down the line as it translates into a sustainable and scalable career. Although starting your own business is never easy, we’ve put together some information that will help you be as informed as possible before jumping into the process. Read on for our list of tips.

How to own a warehouse

You can certainly buy a warehousing business wholesale, but it’s also possible to start your own endeavor from scratch. We don’t necessarily recommend that you build your own warehouse, though. This represents a lot of time and expense when it’s possible to find empty warehouses pretty much anywhere you look. From there, it’s a matter of choosing a transportation partner, finding excellent employees, and making sure that you have access to a robust and efficient warehouse management system from day one.

But won’t my potential clients just sell through Amazon?

Not necessarily. Although many beginner ecommerce sellers start with FBA, it’s becoming increasingly popular for merchants to build their own brand by partnering with a 3PL. When selling through Amazon, it’s difficult to sell through other marketplaces or retail channels unless a merchant elects for FBM, at which point the ecommerce juggernaut just becomes another avenue for netting sales. More customers will be willing to go with your services over FBA than you think!

What’s the difference between FBA and FBM?

FBA, or fulfilled by Amazon, means that you have your products delivered directly to Amazon’s intake facilities. From there, they handle the rest, from picking to packing to shipping. For this service they charge a per-item fee alongside an order fee, which can add up after a while. Many merchants, however, especially ones at the beginning of their ecommerce journeys, believe that this fee is well worth the benefit of not having to deal with the finer points of the fulfillment process.

FBM, or fulfilled by merchant, is the opposite. Your products are listed on Amazon’s marketplace, but all fulfillment and shipping is handled by you yourself. This is some extra responsibility, yes, but also represents a greater deal of control over your customers’ experience. Instead of being dependent on Amazon’s infrastructure, where any mistakes on their behalf will negatively affect your product reviews, the buck instead stops with you. While it’s not quite the solution for how to sell on Amazon for free, it represents fewer fees up front.

What are some drawbacks of FBA I can cite to potential clients?

Looking to inform your customers about the drawbacks of the competition? No problem, we’ve got you.

First, there’s the matter of where to buy products to sell on Amazon FBA. Amazon may not accept certain products that they consider to be unwieldy, of non-standard size, or not profitable to pick, pack, and ship. If you deal primarily with this type of merchandise, you may feel out of luck.

Secondly, sellers are asked to provide four weeks of cover so merchandise can be evenly distributed across warehouses. This makes sure customers all over the country are seated comfortably within the Prime 2-day delivery range. However, their calculations of four weeks of cover may not actually be representative of the actual figures, leaving you feeling disconnected from the fulfillment process.

Lastly, if you’re selling through FBA, it makes the matter of scaling your operations to other selling channels more difficult. If you want to open up a storefront on Shopify, Ebay, or even your own dedicated store, it can be a hassle to set up all the necessary fulfillment operations from scratch. Meanwhile, when you’re already going the FBM path, that infrastructure exists to begin with.

In conclusion

Of course, it’s no longer necessary to start a 3PL business from scratch to get into the warehousing business. If you have some spare space in an office, garage, or retail location, P2Pseller has your back when it comes to booking and offering warehousing, logistics, and transportation services that won’t break the bank. We allow small companies to find equal footing with regional and national giants, meaning you’re able to find the best solutions possible for your unique business needs and see all costs and fees totally in advance. We’d love to have you on board for the ecommerce revolution so you can grow your business bigger and better than ever before.


Tags

#warehousing#fulfillment#smallbusiness#beginner#tips
Previous Article
Prioritizing the environment in ecommerce

Oleg Mikhailenko

Co-Founder, CEO P2Pseller

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