The Next "Small Thing" In Optimized Inventory Management
As the last of the trucks rolled away from a storage unit carrying parcels and gifts for its destination, one man was heaving a huge sigh of relief at successfully executing over 12,000 orders this holiday season. The smile on Hiren Patel’s face was enough to indicate that his small firm Sent 4 U based in MIDDLESEX, UK, had a great ending to 2013.
However, there is more to his smile than what meets the eye.
Over the past month Sent4U (started with a capital of £1,000.00 in Sept’13) bought, stored and dispatched a massive amount of gift items (12,000) at a fraction of the costs which is ideally borne by bigger firms.
And he did not have to dig into management books to find a cost effective way to store his goods. However, before delving further on his ‘open-secret’, let’s first understand a bit more about his storage requirements just to learn by example.
Sent4u is an online e-commerce gift company which for reasons quite obvious will have a greater volume of orders or gifts to deliver during any holiday or festival season than at other times of the year. This presents a very complex situation for the company wherein it would be forced to own a large storage warehouse to meet the seasonal rush and then having to bear the cost of near empty spaces for the rest of the year.
In plain words, if the average monthly sale for the off season was 1,450 units per month, then it would be a highly expensive strategy for Hiren to own or rent a storage unit big enough to hold the average 11,000-12,000 units sold during the rush period.
This is the reason that Hiren too joined the ongoing ‘mini’ movement to make use of the local self-storage units and also the secret behind his winning smile.
There are several factors that make these self-storage units or mini-warehouses such a fantastic addition to the strategy of a developing company or firms similar in size to that of Sent4u.
- High Flexibility of Storage space with respect to the fluctuation in inventory size.
- Highly cost effective since you rent only for the time you require and the space you require.
- Zero worries as you pay the rent and forget everything else including utilities and maintenance
- Reception area services are also now available with some enterprising storage units which particularly cater to business customers. They even collect and store away the incoming goods without the need of a presence of an employee.
First originating in US, the concept has now spread across to Canada, Australia, UK and many other countries.
As more online retailers enter the market, the realization of this service’s existence is driving the demand for these storage units as a convenient and cheap place to store stock. Such is the shift in its demand demography that within a couple of years, 42% of self-storage space was used for commercial purpose, compared with only 39% for personal use in 2012.
So, as Hiren rests and plans for his next big sale period, the Valentine’s Day to arrive, he is already completing the paper work to re-hire his mini-wonder-stores again.