Co-Warehousing Saves Money, Improves Efficiency

Businesses are booming everywhere thanks to the rise in e-commerce shopping. However, the more consumers shop, the higher the demand for products and fast delivery. Because of this, companies are constantly exploring ways to increase efficiency and meet customer demand.

Co-warehousing has presented itself as a feasible solution. This is the act of sharing a warehouse facility with one or more businesses. If you’re wondering how advantageous co-warehousing can be for startups, you’ve landed in the right place. This article will go over the most impactful benefits of co-warehousing and offer tips for how to effectively co-warehouse should you decide it’s a viable option for your startup.

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The benefits of co-warehousing

Co-warehousing can benefit startups struggling with efficiency, slow delivery times and high operating costs. Sharing a warehouse can help provide solutions to all of these challenges. Let’s look at this in more detail below.

Maximize efficiency

It’s difficult to branch out in business if you don’t have the proper tools and setup to help you thrive. For example, running a product-based business from home is challenging when you store products, distribute them and organize your operation in a small space.

When you leverage a co-warehousing space, you can claim just the right amount of space to run your operation comfortably. You get the logistics of a traditional warehouse while minimizing costs and time-spend, allowing you to focus on making your startup business disruptive with speed and efficiency.

You also can use advanced warehouse technology provided by a co-warehousing space to increase efficiency even more. For example, cloud-based inventory management allows you to track your inventory no matter where you are. Artificial intelligence and robotics might also be available to streamline assembly, packaging, and picking processes. This advanced tech may not be something you can afford to invest in right away, so choosing a co-warehousing setup that provides that tech may allow you to reap the benefits. When you maximize efficiency in your business, profitability and productivity follow.

Better delivery-turnaround times

Consumers demand reliable delivery, with 65% of them willing to pay more for quick, reliable service. With a statistic like this, your business should focus on creating these dependable deliveries. Many co-warehousing spaces offer shipping and delivery services that enable the above

Sometimes, supply chain issues impact truck drivers that play a vital role in your delivery circuit. Unfortunately, the e-commerce boom has led to more truck drivers working overtime to meet demand. As a result, they often drive while tired or stressed, leading to accidents. And when they’re in accidents or dealing with increased demand and not enough workers, products don’t get delivered.

Co-warehousing spaces can help minimize how often truck drivers work in hazardous conditions. Instead of having to make multiple stops, truck drivers only have to deliver goods to one location, which means fewer overworked truckers and fewer accidents. Thus, you are cutting down on delivery times and late shipments. With better delivery turnaround times, you can satisfy your customers’ cravings for fast delivery.

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Save money

The main benefit of co-warehousing is how much money your startup can save. Renting a warehouse space can be costly, especially when locked into a long-term lease. In addition, when you have a warehouse space that is too big for your operation, you end up paying more in operational costs than necessary.

With co-warehousing spaces, you pay a reasonable monthly fee and only have to pay for the space you need for your products. You also have access to a host of amenities you would have to pay for separately if you rent warehouse space on your own. If you can run your business out of a co-warehousing space, it could save your business thousands.

Networking opportunities

Some startup owners are against having to share a space with other businesses. However, a co-warehousing space offers a community — much like a modern coworking space. You have opportunities to interact with other business owners and grow long-term, professional relationships. Your business is more likely to grow continually when you learn from and connect with others in a shared space.

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How to effectively co-warehouse

If you’ve reviewed the benefits above and are interested in a co-warehousing arrangement, these tips can help you effectively co-warehouse when you take the leap.

Ask about legal liability insurance

Many startup owners decline co-warehousing opportunities because it’s difficult to trust someone outside of their businesses to care for their products as they would. Damaged, lost or stolen products can be detrimental to a startup’s success. So, the choice to hand everything over to a co-warehousing space is a big one.

The best way to soothe your concerns about how well your products will be taken care of is to ask about legal liability insurance. This kind of insurance protects you if the co-warehousing space loses your inventory or damages it due to negligence or maintenance issues. Require the coworking space you choose to show proof of warehouse legal liability insurance before you sign on the dotted line.

Train your staff

When you’re working in a space that’s shared by others, staff training is that much more integral. All employees should know where your products are in the warehouse and how to access them.

You should also train your staff on how to work in the co-warehousing space. Do a walkthrough with your team. Show them all the amenities, entrances to and exits out of the facility, and which tools you’ll use regularly.

It’s a good idea to appoint a lead in your co-warehousing space. This person should be your go-to resource for all things co-warehousing. That way, your team knows who to contact with questions, concerns and emergencies. Train your staff so your workflow remains seamless in a shared warehousing space.

Be hands-on

You’re putting a huge chunk of your business in someone else’s hands when you leverage a co-warehousing space. As tempting as it is to drift away from the day-to-day responsibilities of running a warehouse, don’t do it.

You need to be hands-on when using a shared warehouse. Get to know the person managing your account and any other employees in the space that contribute to making your experience as smooth as possible. Also, startup owners can and should delegate warehouse management to someone else on their team to free up time for more pressing projects and tasks. However, it’s still important to visit your co-warehousing space weekly, at the least, to ensure things are going well.


Startup owners can enjoy significant benefits when they leverage co-warehousing. Among the most notable are better efficiency, improved delivery-turnaround times, lessened expenses and networking opportunities. Use the tips above to effectively co-warehouse should you decide it’s the best choice for your startup.

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