Unlocking Efficiency: The Key Benefits of Multi-Client Warehousing

Supply chains today are facing unprecedented levels of disruption, with a revolving door of tariffs, geopolitical threats, freight fraud, cybersecurity issues and more wreaking havoc on even the most well-thought-out plans. However, as anyone who works in logistics knows, the one thing constant is change. As companies look for mitigation strategies to address all of the risk factors facing their supply chains today, flexibility and scalability are paramount. For many companies, this involves a complete assessment of their operations to identify areas for greater efficiency, cost savings and resilience.

Particularly for those looking to create more efficient supply chains while reducing overhead costs, shared or multi-client warehousing can prove to be increasingly beneficial. While it may not be recommended for every type of shipper, it offers numerous advantages for small to mid-sized businesses (SMBs), companies with seasonal or subscription offerings, or those looking to grow and enter new markets.

How It Works

Unlike dedicated warehousing, which may be preferred by large companies that have plenty of inventory to fill an entire warehouse, shared warehousing allows multiple companies to share the space, labor and resources of a single facility.  This makes it particularly advantageous for SMBs or companies with fluctuating inventory requirements.

Because all tenants utilizing multi-client warehousing can share the costs of rent, utilities, maintenance, equipment and labor, this option helps to achieve greater cost efficiency, allowing businesses to focus their capital on additional growth. Because many warehouses are also equipped with advanced warehouse management system (WMS) and inventory visibility technology, companies also benefit from faster, more accurate order processing and fulfillment without the need to invest in their own technology solutions.

Shared warehousing also allows for greater flexibility by helping to support business growth. While dedicated warehousing typically requires longer-term agreements, shared warehousing often has more flexible terms and allows businesses to scale up and down as their needs change due to seasonality, demand spikes or the desire to enter a new market.

Why It Matters Today

Market volatility, seasonality and unpredictable risk factors make flexibility essential when navigating today’s supply chain ecosystem. As companies look to grow despite these challenges, many will face added cost pressures and will need to find ways to help offset them. Shared warehousing provides many benefits for companies looking to mitigate risk and create more flexible supply chains.

Some of the key benefits include:

• Cost efficiency for reduced overhead. Dedicated warehousing often comes with less flexible terms and more financial risk. By utilizing shared space, companies are able to share the cost of space, resources, technology, labor and more, allowing them to focus on additional business growth.
   
• Scalability to meet demand fluctuations. With dedicated warehousing, companies have all the space in a facility available to them but remain vulnerable to higher fixed costs, even when space goes unutilized. With shared warehousing, companies are able to add or reduce space as needed to meet changes in demand due to seasonality or unanticipated factors.
   
• Speed of entry into new markets. Companies that use shared warehousing in multiple markets have the added benefit of being able to reach new customers more quickly and easily, helping them to scale and expand while keeping costs down.
   
• Staffing, training, systems, processing and compliance are handled by the experts. Dedicated warehousing costs cover all of these areas, giving companies peace of mind that their operations will flow seamlessly without the need to dedicate their own time or internal resources.
   
• Advanced technology for accuracy and visibility. Businesses can have deep visibility into their inventory, order management and shipment status since most shared warehouses are already equipped with WMS and visibility tools.

Managing the Complexities

With an experienced 3PL like NXTPoint Logistics managing the staffing, equipment, zoning, layout and systems integration for shared warehousing, we effectively remove some of the complexity and cost for our customers. When it comes to a facility’s zoning and layout, inventory can be segregated by customer while being efficiently organized, with ideal pick paths, racking, bin configurations and more being set up for optimal inventory management and workflows. This leads to faster order fulfillment while reducing errors, helping to improve customer satisfaction.

Our multi-client warehousing partners also benefit from our expert systems integrations, allowing them to focus on managing their business while gaining complete visibility into their inventory status and shipment process. Our trained and experienced teams work hard to meet all our clients’ KPIs for success, create transparency for every order and proactively communicate to ensure their needs and goals are met.

If you are looking for a more cost-effective warehousing option, the NXTPoint team would like to connect and learn about your company’s needs, goals and challenges and share how our scalable infrastructure, advanced technology and experienced team can help you create a more flexible and cost-efficient supply chain. Reach out to our team today to learn more.