Calculating warehouse storage costs can help you make smart decisions regarding inventory, finances, and logistical planning. If you are looking to rent warehouse space, you should have a basic plan and understanding of the costs of renting space in the storage facility. Being aware of the overall expenses of warehouse storage will help you determine if it’s cost-effective and profitable for your business. There’s a wide range of factors that you should consider when calculating warehouse storage costs, including value-added services, geographical location, terms and conditions, and stocking.
How to Calculate Warehouse Storage Cost?:
1. Figure out how much space you need
To figure out how much space you currently need, take the items you need to store and stack them side by side and measure the length and width to get your square feet (length x width). For example, if your needs are 500 sq ft. based on your measurements, you can have an idea of what you are looking for when searching for space to rent.
If you are unsure of how much space you need, it’s best to discuss your specific need with a storage consultant that can guide you in the right direction.
Most warehouse space is broken up into bays, lockers, or sections of square feet that are available for items to be stored. Some warehouse spaces may even mention they have a certain amount of square feet available at certain times. One thing to look for is a warehouse space that can expand and contract with your business needs.
2. Find a warehouse storage facility in your desired area
Warehouse storage space can be hard to find in major cities like Boston and New York. Looking for storage space 30-60 miles outside of your target major city can be a good way to find available space. One thing to look for when inquiring about warehouse space is the company’s reputation and years in business. Once you find a company, you should inquire about renting space. If you have a rough estimate of the space needed that helps, but a reputable company will be able to help provide more clarity and plan for your warehouse rental.
3 parts to renting warehouse space:
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- The amount of space you need (square/ cubic feet)
- Base rental per square foot (monthly or annually)
- Storage service expenses (varies by usage and type)
Factors to Consider When Calculating Warehouse Storage Costs:
All warehouses operate differently and offer different services to their customers. For instance, some warehouses will store your inventory, while others will take care of the entire logistic process. Some of the key value-added services include the following:
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- Delivery services
- Packing inventory
- Sorting inventory
- Counting inventory
- Handling inventory
Packing services for example, involve boxes, packing Styrofoam, tape, and other basic packing materials which are added costs. Some warehouses offer a final mile delivery service where they can take in your inventory and deliver it to their final destination. These services will influence the total warehouse storage costs on a monthly basis as services are used.
Warehouse Location
When looking for a warehouse storage space, consider access to main roads, airports, rail lines, and trucking hubs. A great storage facility should be in an accessible location and close to your main markets. The geographical location of your warehouse will impact the warehouse storage facility costs.
Terms and Conditions
Each warehouse storage facility has unique terms and conditions. Some will allow you to lease the space for a long period, while others won’t. Some will have minimums for the amount of space rented or additional services used. Therefore, consider a company that works with you as your business expands and contracts with supply and demand.
Stocking and Pulling
Stocking and pulling lies under the handling fee. You’ll need to consider packing, loading, and unloading expenses. Another common expense with warehouse storage space is using a forklift to move pallets or other materials as well as personnel to operate and facilitate proper storage of inventory.
Determining warehouse storage space costs will help you maximize profits and minimize operating costs. Therefore, it’s important to compute the cost of the storage space in Boston to determine whether it suits your needs.
Looking for Warehouse Space in the Greater Boston Area?
If you are looking for warehouse space to rent in the Greater Boston Area, Mark’s Moving and Storage is prepared to help with your specific storage need. Request an estimate or call us at 508-983-6000