Inventory Storage Solutions in Europe
Many businesses struggle when it comes to establishing a foothold in the European market. A core issue of this is the selection of the right inventory storage solution. There are many options in which way to handle your storage. There are two main ‘types’ of solutions. Together we will go through the most common ones.
Buying a Warehouse
There is the option of investing in a private warehouse. This option has the advantage of having usually more space than you need. It also lowers the monthly cost, since you own the space. However, you still have to keep maintenance going, so it’s a wash at the end of the day.
Another drawback is that a warehouse is not a fulfillment center.
What this means is that there is still a lot of investment. You would have to pay for equipment, registration, personnel training and pay. For many smaller businesses, this is not an option. And even larger retailers are increasingly opting out. There is simply too much capital investment need and time restrictions for this to be effective. However, some might want to tackle this challenge themselves.
Outsourcing solutions are a much broader category. They include many different subtypes of solution. For example, bonded warehouses, regular warehouses, all-in-one solutions, etc.They all have more or less specific cases of use. We will go through them now.
Bonded warehouses are facilities in which goods that fall under customs law are kept before duties are paid. In this way, any imported goods from outside Europe can be safely and legally stored in our bonded warehouse without you having to pay customs immediately.
Once you receive the order on your online sales page, you pay the customs duties with part of the profit earned from the sale. If the product is to be shipped back outside the European Union, you can even avoid paying at all. This is because VAT is only paid when imported goods are sold, not on re-exported goods from the bonded warehouse. Some companies report up to 25%-30% saved on these taxes.
This type of warehouse is great for trade actions from outside Europe especially because they help your capital stay liquid. This allows you to invest more in segments of production and marketing. And it leaves more time for you to work on it.
Warehouses are a general term for any certified, registered facilities that handle the storage of your goods. They are usually larger and offer storage space and handling in exchange for a certain fee. Business models differ, but mostly they rent out space for a fixed monthly rate.
This can help reduce the cost and danger of damage. However, it doesn’t handle your order fulfillment. Especially for e-commerce fulfillment, this is not a good option.
The best option is an all-in-one solution. These companies handle every aspect of the logistic process for you. From receiving and storing your goods to picking it out and completing the order. For smaller businesses, this is especially attractive, because it offers an easy, uncomplicated solution for premium service.
Since it incorporates everything we mentioned, it usually comes at a reduced price because of the volume of work being done. This can significantly lower your overhead and relieve some pressure from your regular expenses.