Differences Between Small Vs. Large Business Warehousing

Although with many noticeable and not so noticeable differences between small and large businesses, one area where the two can often be compared is warehousing. In this article, we are going to look at some of the key differences between warehousing for small and large businesses.

Cost and scale

When it comes to warehousing, one of the most significant differences between small and large companies is cost and size. Smaller businesses typically have smaller budgets for warehousing needs than larger businesses. This means they often have to be more creative in their storage and inventory management methods. For example, small businesses may use less expensive storage methods (such as pallet racking) rather than more expensive options (such as mezzanines).

Smaller companies have fewer inventory needs, which means they don’t need as much space to store their goods and they don’t need as many warehouse employees to manage their inventory. So it means that small companies have relatively lower costs for various things.

End Customer

Do you ship to another business or a consumer? While the differences between B2B and B2C are somewhat obvious, both require specialized skills and attention. A large business shipping to consumers will develop a streamlined plan to address order selection, shipping and possible returns. It will rely on you to ship the product in the proper containers in your warehouse and be prepared to handle customer complaints. If you’re shipping BtoB, there may be more wiggle room in how the goods are presented.

For small businesses, the opposite is true. They ship to their customers as the basis for the relationships they build with them. Smaller companies have more opportunity to build that relationship through the warehouse.

Timing

Large companies usually plan their shipments six to eight months in advance. They order from foreign suppliers, bring in large quantities and define the shipper’s business. Smaller companies are more likely to want “just-in-time” shipments. This helps reduce their costs because they don’t have to pay for inventory that hasn’t moved yet.

As the preferred warehouse for any company of your size, you should have storage units that are time appropriate. If your larger customers need more physical space, you can adjust with additional racking systems or stacked pallets.

If your smaller company wants faster turnaround, you need LIFO racking systems and inventory space that allows high traffic with easy in and out capability. You will turn inventory around faster.

Order Fulfillment

Who is receiving and preparing the product to be shipped? Your larger business with more inventory should have a team where everyone can play a role in getting the goods out the door. This is because the volume is higher and shipments are already scheduled. For example, if you divide your team into pickers, packers, forklift operators and shippers, you may be more efficient in terms of time and money, even though there are more people on the line. Small business teams should be more personal, with one or two people on the job who know the status of the entire planning and receiving and shipping process at any given time.

Flexibility

Large companies often have special requirements for their inventory management and storage. This may make them inflexible with respect to changes in demand or other factors. On the other hand, small businesses tend to be more flexible in their approach to storage. This allows them to quickly adapt to market changes or inventory needs.

Customer Service

Finally, small businesses typically place more emphasis on customer service than larger businesses. This means they are more likely to offer services such as same-day shipping or other value-added services. Larger companies, on the other hand, may be more focused on cost reduction and less concerned with providing quality customer service.

Payment terms

Small businesses usually do not have the same cash flow as larger companies, so their payment terms may need to be negotiated.

Findings

On balance, it’ s a fundamental difference between small and large business warehousing solutions. Smaller companies typically have less space and fewer employees, but they are also more flexible and often provide better customer service.

Larger companies typically have more space and more employees, but they may not be flexible and may not provide the same level of customer service.

Eventually, the best approach for your business will depend on your specific needs and requirements.