Title: SHOULD YOU BUY A WAREHOUSE OR RENT IT FOR BUSINESS EXPANSION?
1Warehouse Fulfillment Services In India
- https//www.quickshift.in/fulfillment-services
2Should You Buy A Warehouse Or Rent It For
Business Expansion?
3So, you have zeroed in on warehouse as your
preferred storage option over 3PL providers
like Amazon fulfillment centers et al. But a
tricky question you might be facing now is
whether to buy a warehouse or rent it. If that
thought did cross your mind, your business must
be doing reasonably well since buying a warehouse
is an excessive investment upfront. To be
blatant, theres no single answer to the question
for you. It depends upon a lot of factors,
including the availability of capital, business
goals and needs, projected growth,
sustainability, and so on. Here we will discuss
the advantages and disadvantages of both the
option to help you make the right choice.
4- Buying A Warehouse
- Pros
- Flexibility
- This one advantage can also be termed as a con
taking a warehouse space for rent. While
launching a new product range or tapping into a
vertical, you would need to make changes in your
storage space. This includes the addition of
pallet racks, an adjustment in layout, and other
constructional changes. Buying a warehouse
storage space in Pune and other cities make you
the owner of your own deeds, which means you
wont need to take permission from the landlord. - Renovate your warehouse as well as make other
changes to boost the growth of your business. You
can customize a pallet racking system and
construct the warehouse according to your needs
rather than using someone elses installed system.
5- Stability
- Rental rates fluctuate quite a lot, and your
landlord may charge exorbitant prices, which you
can do little to control. Mortgaging a warehouse
is a better option in this regard as the mortgage
rates fluctuate quite less. If you can make the
complete the payment in one go, you have a large
property to yourself and would keep your
hard-earned profit to yourself. - Taking a warehouse space for rent leaves you with
no control over when you need to relocate. Your
landlord may choose not to renew your lease
calling for urgent relocation. Looking for a new
warehouse takes time, and you might incur losses
in such a case. Buying your own warehouse offers
you the stability to grow your business from one
place. - Long term investment
- Along with benefitting your business, a warehouse
is also a reliable investment. Its value will
increase over time, and you can also use it as
equity in loans to grow your business. You can
also sell the warehouse at a profit if in case
you need urgent capital.
6Cons Huge investment upfront Buying a
commercial warehouse generally requires around
20-40 of deposit upfront while you would just
pay around 5 deposit on residential properties.
Depositing such a large amount can result in
decreased liquidity, which in turn adversely
affects new businesses. Maintenance While
buying a warehouse gives you the option to
customize your storage space as per your
requirements, it also means that you have to bear
the costs of maintenance. You would have to
employ your own workforce and organize the
warehouse besides focusing on the growth of the
business.
7- ADVANTAGES OF RENTING A WAREHOUSE
- Flexibility
- While you cant customize the structure of your
rented warehouse storage space in Pune, Mumbai
etc, you have the option to switch storage
locations as your business grows. Buying a
warehouse in different cities can be practically
impossible, but you can easily rent warehouses on
different locations for secure storage and quick
shipment. You can also switch to a more massive
warehouse when the product demand increases. - Maintenance
- No one can do all of it alone. Keeping a check on
inventory, shipments, delivery as well as
manufacturing and marketing is already an arduous
task for a businessman. Add to that the headache
of renovating the warehouse or repair. Your
landlord will take care of all those problems in
a rented warehouse.
8- Cons
- Cost
- Rental rates fluctuate a lot while leasing a
warehouse, and there is no way they will ever go
down. You will have to pay a monthly rent that
increases annually. The increase can be quite
significant, and youre not gaining anything by
the rent, unlike buying where you are actually
investing your money. - Lack of control
- In contrast to buying a warehouse or using
an Amazon fulfilment center, leasing it means you
dont have control over customization of property
or changing the layout. You cant change your
storage space as per your requirements without
the landlords permission. Additionally, you
might have to relocate if the landlord finds a
better deal, which can affect the productivity
and stability of your business.
9WHAT SHOULD YOU DO? A small scale business or
startup in its growing stages would be better off
leasing a warehouse for storage. You can choose
to invest in buying a warehouse once your
business has grown enough. Weigh in all these
factors and make the right choice since
investment should always be well calculated to
build a business.
10Contact Us QuikShift.In Bhale Estate, Plot
Number 30, Next to Thermax Company, behind
Honda Showroom, Wakadewadi, Shivajinagar, Pune,
Maharashtra 411005Maharashtra, INDIA Visit
https//www.quickshift.in/Phone 9170303 03300