How To Choose The Best Warehouse Types

warehouse types

A warehouse is a building that has a large storage area for inventory. Usually, warehouses are used by companies that sell products by using a “fulfillment service”. Companies like Amazon and eBay use fulfillment services because they don’t have enough room or facilities to store all their inventory.

You should know what kinds of warehouses are available so you will be able to find the one that is most suitable for your business. There are three different types of warehouses that you should know about:

Public Warehouses


A public warehouse is a large building that is constructed for the sole purpose of storing goods. The primary reason for this type of construction is to provide a secure environment for storing perishable items. Public warehouses are often located near railroads or seaports and are used for storing food, such as fruits and vegetables, grains, nuts, coffee, and so on.

You might be interested in knowing that many public warehouses were originally constructed as private warehouses for a single owner. However, over time, these buildings were sold off piecemeal and ended up being owned by different people and organizations. In fact, some of these buildings are still owned by the original private warehouseman and have been converted into public use.

Private Warehouses

A private warehouse is a non-public place where goods are stored for sale by a merchant. Private warehouses are used by many different types of businesses. However, the two most common types of businesses that use private warehouses are manufacturers and distributors.

Distributors use private warehouses to store and ship products to retailers all over the country. This way, they can keep a constant inventory of items that are in high demand and can offer them to the public at the lowest possible price. This also allows them to control when their products are offered for sale to the public. They can create special promotions or even hold back certain products until the market dictates they should be sold.

Manufacturers use private warehouses to store raw materials. They can use it as a place to consolidate their inventories or they can use it as a buffer between themselves and the wholesale market. Whichever the case may be, using a private warehouse as a buffer reduces the amount of exposure they have to the volatile wholesale market.

Bonded Warehouses

Bonded Warehouses

A bonded warehouse is a type of wholesale distribution center that must be registered with the U.S. Government. They are required to maintain a certain amount of inventory, and they must keep detailed records of all the products they store. 

This allows the government to ensure that everything that goes into or comes out of the warehouse is properly documented. It also helps ensure that all goods leaving the warehouse are legally imported or exported.

Warehouses of this type are required to have very high security. They must be able to withstand a physical attack by using the walls themselves as a defense. These warehouses must also have an alarm system and video surveillance. The doors to these warehouses are made of thick steel with multiple deadbolt locks. Even the aisles inside the warehouse are wide and have a minimum six-foot clearance for easy access.

Smart Warehouses

A smart warehouse is an efficient distribution center that uses many of the tools of supply chain management (SCM). It is not a traditional retail store. A smart warehouse is set up to receive products from a manufacturer or an importer and then fulfill orders for that product. Sometimes, a smart warehouse will also receive inventory from other warehouses and then re-sell that inventory to other retailers.

A smart warehouse does this in such a way as to minimize the time between when it receives the product and when the retailer gets the product. This minimizes the retailer’s “time to sale.” The shorter the time between receiving the product and the retailer getting the product, the more likely the retailer is to sell the product. 

And the more likely the retailer is to sell the product, the more likely it is that the retailer will pay the smart warehouse for the product. This is how a smart warehouse makes money. It collects money from retailers who have to pay for the product faster than they can sell it.

Consolidated Warehouses

Consolidated Warehouses

A consolidated warehouse is a large building that is divided into individual rooms or “cells”. Each cell is sized according to the type of product that is being stored. For example, you might have a cell for storing canned goods, another for storing grains, another for storing paper and ink, etc.

These types of buildings are used for a wide variety of purposes. Sometimes they are used for storing inventory for big retailers. Other times they are used for storing inventory for smaller retailers. Sometimes they are used for storing overflow inventory from big retailers.

Sometimes they are used for storing overflow inventory from smaller retailers. Sometimes they are used for storing excess inventory that a manufacturer has produced that was not ordered or for any other reason does not need.

Cooperative Warehouses

A cooperative warehouse is a type of warehousing facility that is owned and operated by a group of retailers or manufacturers. It differs from a conventional warehouse in that it is owned by its users and not a third party such as a landlord. Cooperative warehouses are considered an alternative to a traditional storage facility or a “mom and pop” type operation.

Retailers and manufacturers use cooperative warehouses when they have a lot of inventory and need to get it out of their stores or manufacturing facilities quickly and reliably. The way it works is each retailer or manufacturer who uses the warehouse pays a membership fee. This money is used to pay for the building and maintenance of the warehouse and also to buy insurance against loss or damage to the inventory stored in the warehouse.

Government Warehouses

Government Warehouses

A government warehouse is a building constructed by the Government for the sole purpose of storing goods that are sold to the public at a bargain basement price. Often, these warehouses have been built many times over and have been remodeled and modernized to keep them in good shape.

They are usually constructed with an abundance of security features and are well-equipped with the most up-to-date technology to keep out would-be thieves. These facilities are often located far from urban areas and are accessible only by a limited number of roads.

There are three basic types of government warehouses: open storage, closed storage and controlled storage. Open storage means that anyone can go in and take whatever they want without any kind of screening process. 

Controlled storage means that there is a screening process but you must have the proper paperwork to get access to the goods. Closed storage is exactly what it sounds like. You have to go through a security checkpoint to get into the building and once you are inside, everything is yours to keep.

Distribution Centers

A distribution center is a large building that contains a maze of aisles and rows of shelving. The aisles are all of uniform width and all of the shelves are of uniform height. This allows you to see all of your products from one vantage point. It also makes it easy to put things away because you just need to step up or down on the foot pedal and the foot rest will automatically raise or lower as necessary to keep your shoes off the floor.

Most often, a distribution center has a room set aside for receiving shipments. These rooms are temperature controlled and have a constant 60% humidity. This keeps your products fresh and in top condition.

You should always use a distribution center if you are selling a large volume of your product. Having all of your products in one place makes it much easier to fulfill orders. You can also use one if you are creating a very large catalog. That way, all of your customers can browse through everything at their leisure. It makes it convenient for them to buy something they see that they like.

Fulfillment Centers

Fulfillment Centers

A fulfillment center is a large, multi-level building that houses an enormous number of individual shipping containers. The main purpose of a fulfillment center is to receive goods that have been ordered by phone, fax, or online and then to arrange them into neat, uniform packages and send them off to the customer. It’s a huge logistical undertaking.

A fulfillment center is different from a warehouse in that a warehouse is used for storage and a fulfillment center is used for preparing and sending out products. A warehouse is more of a giant “yard” where boxes can be stacked on pallets or racks. Fulfillment centers, on the other hand, are designed with the specific goal of making sure all the items in them are ready to be shipped out.


Why is warehousing important for your business?

Warehousing is a vital part of any business with the goal of getting products from manufacturers to customers. In order to do this efficiently, businesses need to have a place where they can consolidate shipments from multiple vendors and organize their inventory.

This way, they can easily locate what they need when they need it and avoid overstocking or running out of certain products. In fact, studies show that organizations that warehouse their goods themselves see 50% greater sales volume than organizations that do not.

How do you choose a warehouse company?

There are many warehouses to choose from. Some are large and some are small. Some are family owned and some are corporate. Some offer efficient service and some don’t. What you want is a company that has the size and efficiency to handle your volume but that also has the human qualities necessary to give you the personal service you deserve.

The first thing you should consider is location. Is the warehouse close to your customers? If so, you might get a leg up on efficiency by using a local company. However, if you have a remote or “last mile” distribution problem, it probably makes more sense to use a large efficient company that can handle your volume no matter where it is located.

Another consideration is the type of facility the company uses. 

What makes one warehouse better than another?

One of the biggest factors in choosing a warehouse is the size of the warehouse. It is easier to handle a large warehouse than a small one.

Also, it is easier to get items into a large warehouse than a small one. However, there is another important consideration and that is the type of facilities the warehouse offers. Some warehouses have forklifts and automatic guided vehicles (AGVs) and some don’t.

What do warehouse employees do?

Warehouse employees have both inside and outside jobs. Inside are jobs are normally manual labor, picking products off of racks or off of pallets for repacking or boxing up for shipping.

Outside are jobs like driving a truck or loading or unloading it. Or running errands for the supervisor like going to the bank to get cash to pay someone else who has done a good job. Sometimes warehouse employees have a hard time explaining what they actually do to people who don’t work in warehouses.

Which warehouse is best for you?

The warehouse will be the biggest investment you make in your business. But it is not the be all and end all. Far from it. You might have the best warehouse in the world but without the right people or the right systems your business will be doomed.

Therefore, we are going to start by looking at the people side of things. Then we will examine the systems side of things. Let’s begin with the people. What you want are people who are honest, hard-working, reliable and of course able to do the job! There are many ways to evaluate people.


There are many kinds of warehouses. This kind of warehouse is used to store products that need to be kept in a controlled environment such as meats and other perishable foods. Also, it is used to store items that are not sold often such as books, records and other heavy equipment.

Warehouses are also used to store items that are in high demand such as computer parts, clothing, shoes, and many others. A very important consideration is where the warehouse is located. You should consider the weather conditions, transportation, and the cost of utilities when choosing a location for your warehouse.

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