There’s much profit to be drawn from running your own warehouse, whether that’s used to store your own goods which are then shipped to customers, or used to provide other companies with their goods. However, there’s no getting around the fact that the operating costs can be high. As such, it’s a tricky game, trying to find the right balance between those incomings and outgoings. In this blog, we’ll take a look at some tried and tested methods for cutting expenses, boosting productivity, and all-around making your warehouse a money-making machine.
Source: Pexels.com
Analyze Your Operations
Some companies incorrectly believe that they’re operating at an efficient level, when, in fact, they’re not. If you haven’t done an efficiency audit in some time, then you’ll want to get into the trenches and analyze your warehouse operations. There are new methodologies for warehouse efficiency coming out all the time, which can help you to streamline your operations and ultimately boost your profits. If you don’t know what you’re looking for — as in, you don’t know how to spot those functions that drag your productivity down — then hire an outside expert to take a look for you.
Invest in New Technology
The better your equipment is, the quicker and more efficient you’ll work. As such, to speed up your operations and boost your warehouse profits, you may want to consider investing in new technologies. There’s a vast difference between outdated equipment and the latest, cutting edge equipment. Of course, updating your machinery can be an expensive undertaking, and may affect your cash-flow if you’re not careful. As such, it’s best to look at ways to smartly finance your purchase. You can take out a loan, or click here for an equipment financing option. Once you’ve got your new equipment, you’ll find that you’re able to work faster and better, and bring in more cash.
Automate Certain Processes
There are some processes that you do over and over again, such as, say, sorting the goods that are leaving your warehouse into different groups based on their end destination. While you’ll need to keep and invest in your staff (more on that below), there’s value in automating some of your warehouse processes, so that they’re better able to focus on the more complex tasks. As well as automating certain operations, you may also want to outsource some of your work to third-party companies. They’ll be able to handle the time-consuming paperwork that doesn’t really need to be completed onsite and isn’t crucial to your operations, but which does need to be completed.
Training Your Staff
A company that invests in its staff will always be well-positioned to increase their profits. Essentially, it’s not about training your team member to do just one thing, but training them to see the patterns of inefficiency themselves, and empowering them to come up with solutions. Additionally, keep in mind that there’s little use in investing in the latest and best technologies if you don’t then adequately train your staff in how to use them. Even if nothing drastically has changed, you’ll want to hold regular training sessions. Bad habits and sheer forgetfulness can lead to bad working practices.
Negotiate with Suppliers
You may have a lot of money coming in, but a lot of money is going out, too, to other companies. Your suppliers have a huge impact on your success. The quality of their goods, the professionalism of the company, and, yes, the price that they charge you for their services and materials will all have an impact on your bottom line. If you’ve got a good relationship with them, then it’s worthwhile asking for a discount. Many companies are receptive to this kind of idea, but if you don’t ask, you’ll never get — they’re unlikely just to give you a discount. If prices are too high and won’t come down, then shop around. There may be another company on the scene who can give you what you need, but for cheaper.
Shifting Dead Weight
The best way to make your warehouse profitable is…to make sure that everything in your warehouse is profitable. If you’re holding too many goods that bring in little or no money, then it’s time to mix things up. Take a look at all the goods you have in your warehouse, and figure out how much money they make for your business. You’ll want to shift all the goods that are dead weights. Before deciding whether an item stays or goes, figure out its profitability. That should be your focus. It won’t necessarily be the cheapest options that go, and the more expensive options that stay. It’s about figuring out on which items you make the most money, and keeping them around.
Source: Pexels.com
Energy Efficiency
The sheer cost of running your warehouse is going to take a huge chunk out of your budget. In some warehouses, these costs are just treated as an operational hazard, the cost of doing business. But in fact, this is the wrong approach — if you look at things this way, then you’ll absolve yourself of all responsibility for change. This is wrong! There are always ways to reduce your energy consumption, and the positive impact it’ll have on your company’s costs and carbon footprint means it’s worth doing. Let’s not forget that companies and customers are increasingly choosing which companies they give their money to based on their wider social conscience.
Renting Out Space
If you’ve got a lot of space in your warehouse, more than you need, then take a look at renting out some of that space to another company. There are many companies who only need a little bit of storage; makes yours available, and bring in some additional cash. It’s not like you’re using that space anyway.
Conclusion
The biggest takeaway from this article is to simply look at how you’re currently functioning, determine the money wasters and money makers, and tip the balance in the favor of the money makers. You may find you can boost your profits just by making a few changes.