Five Differences in Small vs. Large Business Warehousing

Would you rather be the inventory and shipment hub for a small or a large business? Can your warehouse handle both? If so, can you use the same team? The same warehouse fixtures?

A look at five warehousing requirements will give us a basis to discuss the advantages and differences in small vs. large business warehousing. Sometimes it’s just a nuance, but it makes a difference.

1. Timing – Larger companies usually have plans for shipments six to eight months in advance. They order from foreign suppliers, bring in shipments that are large and define the shipper’s business. Smaller companies are more likely to want “just in time” shipping. This helps keep costs down on their side, because they don’t have to pay for inventory that isn’t moving yet. As the warehouse of choice for either size company, you should have the right storage units for the timing. If your larger clients require more physical space, you can adapt with additional rack systems or stacked pallets. If your smaller companies want quicker turn-around, you need the last-in, first-out rack systems and a space for inventory that allows high traffic, with easy in/out capability. You’ll be turning the inventory around quicker.
2. End Customer – Are you shipping to another business, or to the consumer? While the difference between B2B and B2C is somewhat obvious, both require specialized skills and attention. A large business that is shipping to consumers will have a streamlined plan in place to address the selection, shipping, and possible return of orders. It will rely on you, at the warehouse, to ship the product in the appropriate containers and to be prepared to deal with customer complaints. If you’re shipping BtoB, there may be a little more wiggle room with how the goods are presented. For small businesses, the reverse is true. Their shipment to customers is the foundation of their relationships with customers. Smaller companies have more of an opportunity to give that relationship a presence through the warehouse.
3. Order Fulfillment – Who is receiving and preparing the products for shipment? Your larger businesses with more inventory should have a team of people who each have a part to play in getting the goods out the door. This is because volume is higher and shipments are scheduled. If you divide your team into pickers, packers, forklift operators and shippers, for example, you are likely to increase efficiency in time and money, despite the additional people on the line. The small business team should be more personal, with one or two people on the job who will know the entire plan and the status at any given time in the receiving and shipping process.
4. Brand Experience – Regardless of the end customer – business or consumer – the recipient will make a judgement based on the shipping for a smaller company. They already have a reputation in mind for the larger companies because these companies have built their own reputations over time. Small companies will require more detailed shipping and white glove service.
5. Payment terms – Small businesses usually don’t have the cash flow that larger companies do, so their payment terms may need to be negotiated.