You want to rent warehouse space for order fulfilment growth. You want to scale your business out of your garage. Where is the best location to do so? Well first consider where you live. What does your current supply chain look like? If you live in California, you may consider getting close to a port too lease a small swath of warehouse space.
Los Angeles Port, CA is the largest port on the west coast. Over 40% of the country’s containerized imports flow through this port. This will be the cheapest to sea freight into. Leasing a small location 20 minutes from port will reduce any expensive FCL transport from their container yard to your warehouse.
Similarly, Long Beach Port, CA is the second largest port on the west coast. The combined infrastructure of docking points, cranes, container space, bonded warehouses, and yards provides for the best value FCL transport in the country. There are no cheaper places into import into, unless you live and operate within a city’s respective port. As such, operating an in-house fulfillment center near this area provides access to a cost effective and reduced supply chain.
On the other hand, industrial realtors understand the high demand for warehouse space next to port. This drives the market price warehouse rent higher than anywhere in the country. So unless your products move quickly and with high margins, this area might not be ideal – especially if you don’t love the idea of living in Los Angeles, CA
However, there’s more to Southern California than Los Angeles. There are many pockets of industry tethered down California’s coastline that offer reasonable rates for warehouse space & order fulfilment. What’s more, these locations are just an hour or two down Highway 5 towards San Diego, CA. Think about it, if your going to do this yourself, you may as well enjoy a higher quality of life while doing it. In-house growth means picking a lifestyle that makes e-commerce worth it. Anywhere outside of Los Angeles, in Southern California is a good place to start. Just close enough to port to keep transport costs low, but far enough to enjoy a sunny quality of life.
Warehouses on West Coast
You might live up north. In which case order fulfilment occurs out of your garage in around the Bay Area potentially. Luckily, San Francisco and Oakland also boast enormous sea ports. Do the research on shipping freight prices to this location first. Next, compare this quote to delivery costs to Long Beach Port. What costs more? Afterwards, compare the cost of warehousing in each area. Again, you’ll only need around 3000 sq ft, if moving a 40’ft container. Is labor cheaper in your area or more expensive? All variables to consider when scaling your e-commerce business in Northern California.
Warehouses on East Coast
If your brand is soaring and you need two day nation wide fulfillment access. Then you will need to consider a small warehouse space for order fulfilment somewhere on the east coast. This ensures that your brand enjoys a level of customer service that rivals that of Amazon’s FBA expectations. This will ultimately cut down on last leg delivery to clients, i.e UPS, Fedex or USPS.
Want the cheapest rent possible? Look no further than into the middle of no where. Warehousing sprawls all the way out to states like Montana. There you can get a sq ft of storage for 10 cents on the dollar. Now it may be tough to secure this warehouse space for order fulfilment specifically. But, if you need long term storage for lots of inventory, then put this at the top of your list. Often times folks decry inventory on shelves as wasted money. However, if you’re saving enough on the front end with a bulk purchase, this long term storage solution might be for you. Just remember a couple things to consider as mentioned above:
- FCL costs to truck your containers out across state lines!
- Quality and Costs of Labor
- Quality of Lifestyle
- Warehouse space costs