How to Boost Your Warehouse Business and Cut Costs

How to Boost Your Warehouse Business and Cut Costs

June 18, 2020 7 By mindmingles

Every business wants to be successful and maximize their profits. In order to do so, they need to implement some efficient measures to change the way they operate. But unlike big companies, warehouse business may be a bit easier to manage and boost its productivity. 

One of the ways to rise above the fierce competition is to cut costs and save money while providing top service. The following suggestions give practical solutions on how to spend less and still run a profitable warehouse business.  

Optimize storage

Take a good look at the size of your warehouse and reconsider whether you really need space so large. You can cut costs by optimizing the storage and renting a smaller land for your warehouse which will also reduce the monthly utility bills. Turn to racking as an efficient practice for inventory storage since they are narrow and go into height.  

Also, use appropriate forklift dimensions to navigate between the aisles and sort the goods by size to economically exploit the space. Make sure that aisles allow for freedom of movement and don’t present obstacles to reach or transport large items. The goal is to have quick identification of a product and then loading it safely and promptly on the distribution truck.   

Use direct delivery

Cross-docking is a proven way to save money but also the time you will spend on product management. It includes the direct transfer of products to the customers and that way eliminating the middleman which will reduce the costs of shipping, labor, and storage. Of course, the type of cross-docking depends on the goods being shipped since some items may not be appropriate for this service. 

This is a simple way of handling the inventory although it carries some risks if not implemented properly like loss or damage to goods. So, make sure your employees are trained to handle certain items and keep detailed records of all the incoming goods. 

Save on equipment

Equipment is one of the crucial parts of any warehouse but it can also cause a lot of problems. Outdated equipment needs repairs and that can halt the operations for a while or at least slow them down. To remedy this, warehouse businesses often take loans and in debt themselves to buy new equipment

While this may seem like a good investment, it can also put quite a financial strain on the company that can prevent any other improvement. However, investing in used forklifts and other pieces of equipment may be a more prudent solution and equally efficient. This way you will cut costs and boost your business at the same time, without getting buried in debts.


Reduce power consumption

Reducing the use of energy can greatly influence your monthly costs and turn you into an eco-friendly business. Start saving power by using an automatic light system and electric vehicles, but also invest in good insulation of the warehouse building. Moreover, installing as many windows as possible will maximize the natural light inside the warehouse and reduce the use of artificial lighting. 

This will be a bit pricey but you will quickly return your investment through lower heating and electricity bills. If you have an opportunity to install solar panels – take it since this will not only save you a lot of money on power bills but also may make you some with selling excess electricity. And when it comes to saving on the water bill, hands-free faucets and low flow toilets are a good way to start. 

Reevaluate employee-related costs

If not optimized right, labor costs can become burdening overtime. Instead of paying the employees less, try reevaluating the need for the current number of manpower as well as working hours. Also, consider investing in more experienced employees since training new workers will take time and money.

Automation is a good solution to cut costs although you need to make sure that your warehouse business is suitable for the use of machines. Even though machines can work 24/7, you need to calculate how much energy they use and maintenance costs. So, sometimes it may be better to work on improving productivity by motivating employees through seminars and positive incentives.   

Use management system

Having a management system in place is the foundation to cut costs and make your warehouse business more efficient. It will allow employees to easily find the goods in the inventory to receive products and organize shipments. The management system will create the most functional routes for pickers to reach the desired items which will reduce the preparation time.   

Instead of using paper records, you will keep inventory listings on tablets and cloud which will speed up accepting the goods and its shipment. More importantly, it will provide a faster way to locate items as well as to organize them to avoid clutter. Investing in RFID points throughout the warehouse will make it easier to identify the goods and prevent its loss.

Introduce a barcode system

Having a barcode system in place will prevent errors or at least reduce their occurrence when handling the inventory. It will allow for better traceability and reduce the time an employee spends in processing the goods on paper. Besides using barcode scanners, there is also an option to turn smartphones into ones with WMS software and that way save money on buying scanning equipment. 

Modern barcode scanners can have cameras, scan QR codes and upload the data to the cloud so you can quickly add items to the inventory list. By making your inventory more visible and accessible you will be able to create more practical ways to handle the goods and boost productivity in your warehouse business.


The first step to boost your warehouse business and cut costs is optimization. Take into account the type of goods you are handling and how you can improve it all with minimal risks to the inventory. Lowering monthly bills by reducing the use of power, heating and water will also greatly affect your budget, as well as investing in used but fully operational equipment. In the end, you will build a business that will efficiently exploit the resources while bringing high profits and positive feedbacks.