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Coworking  space and office sharing are common in today's business world. Both types of arrangements allow entrepreneurs and small businesses to have a professional setup without having to purchase real estate or commit to expensive leases. As a result of the pandemic, some businesses have abandoned traditional corporate offices for good and switched to a permanent office-sharing arrangement for all employees.

With so many different types of professional and virtual spaces now available, coworking is only a small part of the larger space-sharing movement. Warehouses have become more important to many companies' operations as e-commerce has grown, making co-warehousing an increasingly popular option in today's workforce.

Co-warehousing is a practical solution that allows businesses that need to store inventory or equipment to do so without having to purchase or lease an entire facility. It also saves businesses from having to invest in infrastructure for their products and employees.

Here's a closer look at co-warehousing and the benefits it can provide to investors and businesses of all sizes.

Why is co-warehousing so important now?
Co-warehousing is defined as the use of the same warehouse space by multiple companies. Businesses can join a shared warehouse and use the storage facilities without having to buy an entire building or lease it on the terms of the owner.

Co-warehousing is a growing trend, but it is still a niche market in comparison to the coworking sector. Nonetheless, there is plenty of evidence that the demand for storage space is increasing, as it becomes more difficult for smaller businesses to find places to store their inventory.

E-commerce is increasing competition for storage space. Online retail sales in the United States are expected to reach $870 billion by 2021. This was a 14.2 percent increase over 2020 and a 50.5 percent increase over 2019. Meanwhile, real estate firm JLL reported a 46 percent increase in leasing by logistics and distribution companies between 2019 and 2021.

With such high demand for warehouse space, large corporations have a distinct advantage over smaller firms with limited capital. They have the ability to purchase all available space or outbid smaller competitors when leasing. Co-warehousing allows smaller businesses to store inventory without having to compete with e-commerce giants' lease offers.

What are the benefits of co-warehousing?
Though it can level the playing field for smaller businesses, co-warehousing offers distinct advantages to businesses of all sizes.

A setting for new connections and opportunities
Co-warehouses, like coworking spaces, offer opportunities to interact with other entrepreneurs in the same industry. This community environment can lead to connections, partnerships, and new opportunities that can help businesses grow.

Furthermore, these relationships can include collaborations with shipping, delivery, or supply services that work with the other tenants in the warehouse.

Increased operational flexibility
Young businesses frequently fail due to scalability and expansion errors. For example, an e-commerce company may buy or lease a warehouse even if it will not use the majority of the space. Or, the company decides to save money by using a smaller warehouse space and quickly outgrows it, stunting development and forcing operations to slow or halt while moving to a larger building.
Co-warehousing allows businesses to pay for only what they need right now and add space incrementally as their needs grow. This is especially important if a company only requires storage space on a seasonal basis. Short-term co-warehousing commitments allow you to get shelf space as needed rather than paying for an entire year.

Because co-warehousing agreements require a shorter commitment, this flexibility can also be useful if companies need to downsize. This is advantageous in times of uncertainty, when supply and demand are difficult to predict and logistical issues can force rapid changes to business models.

Shared costs and services
best coworking space also provides businesses with other (sometimes costly) necessities that they might otherwise overlook. For example, indoor air quality is an important but often overlooked aspect of warehouse operations. A shared warehouse will already have the necessary ventilation and protections in place, allowing business owners to be confident that the space is safe and healthy for employees. These features also ensure compliance with workplace health and safety laws.


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