Sunday, February 22, 2015

How Pallet Racking Works To Add Space To Your Business


I hope you've started to change your perception about buying and selling used goods after my previous post about how "People Buy Junk".

That's on an individual level...and doing that consistently can definitely pack more punch towards your freedom fund contribution.

But what if you're already doing that?

On a much larger scale.

Perhaps, your side hustle may involve buying wholesale items in bulk, and selling them at a commercial price. On an individual level, your bedroom may be the perfect place to store all that 'junk'.

But if this is a serious side-hustle or full time business, then we're essentially looking at warehousing solutions.

Today let's explore ways to deal with space constraints effectively, and how it can add to your margins.

Remember, over here at White Collar Freedom, we're all about 'The Third Option' - maximizing returns while minimizing costs.


Packaging

If you're running a trading business, you'll understand that packaging is important, not only from a customer-perception point of view; but also from a logistical point of view.

While irregularly-shaped boxes may look better, square or rectangular boxes fit better in a shipping container. That's why businesses use them to maximize cost efficiency.

Then we have material. Cardboard boxes like this from Postpack are preferred over plastic ones like this from Argos - for the very simple reason that it weighs less.


Storage & Cost Savings

Now on storage.

Goods don't magically get transported from the place of production into the hands of consumers. They are usually stored somewhere. And we call that a warehouse. (Yea, in case you didn't already know...)

But, have you heard about pallet racking? I mean solutions like this - Pallet Racking by WSSL and the ones from Storax.

So, let's say you have a warehouse and your inventory is overflowing. You basically have 2 options:

1) Get a bigger warehouse 
This involves sourcing for a bigger space, renovation works and relocation costs. While this may be a long term solution, it requires a huge initial investment that will set you back by a significant sum. Your margins will be affected for a few years, which means your net income will be reduced. 
And that means less contribution to the freedom fund. 
2) Stack upwards 
You may have limited horizontal space. But who says you can't expand vertically? Now, this is where a system like pallet racking will fit like a glove. 
To give you an idea, look at what wholesale retailers like Costco are doing. They essentially stack layers of goods on top of each other to maximize that vertical space. This means better efficiency and higher space utilization. 
Just the kind of rationalization we personal finance buffs like.

At the end of the day, it's your choice to decide on which option suits your needs best.

Now I do understand that there are many pallet racking systems available out there in the market for different needs and scale.

But I'm sure you understand your business better, so I'll leave that part to you.




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1 comment:

  1. It sounds to me like pallet racking can be really helpful in saving space. I have been wanting to get a lot more space in my business's warehouse, and it sounds to me like pallet racking is a good way. Then we could start stacking upwards to give us more space. This would also probably help us keep things more organized as well. Thanks for the great post, you had some really helpful ideas! http://www.tristatesurplus.com

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