How External Stock Storage Can Save Your Business Money

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Use business Storage from Store First to save your business money

Spend a few moments reading the financial news and you’ll near story after story of the traditional British High Street’s decline. Around the country, town centres have transformed from bustling business centres into quiet, often largely closed streets.

According to a recent BBC article, UK town centres saw 964 new closures between January and September of 2014. The decline of the High Street is picking up speed; the rate of decline in 2014 was more than 250% that of 2013, according to PwC.

While traditional retailers are facing tough times and, in many cases, closing down altogether, many of the country’s biggest online retailers are booming, taking on a growing number of orders each and every month.

The economics of e-commerce are massively different to those of High Street retail, with lower operating costs allowing online retailers to undercut their competitors in town centres. It’s an advantage that’s won them tens of millions of customers.

It’s also a chance that’s led to the growth of external stock storage. As the traditional retail market – which depended on in-store stock storage – shrinks, the demand for external stock storage is growing at an astonishingly rapid pace.

The effect of rising real estate prices on stock storage

Alongside the massive growth of e-commerce and the decline of High Street, another factor has played a role in creating the perfect storm for external stock storage: high real estate prices, particularly in the city centre locations many retailers need.

The huge growth in real estate prices, particularly in urban centres and large cities like London, has made external storage, which is typically located outside the urban centre of a city – a cost-effective alternative for many businesses.

For product-based companies, it’s the perfect combination: a growing audience of online shoppers, one of the world’s best postal distribution networks and a lower-cost alternative to the traditional High Street shop.

Beyond the reduced costs and improved economics, however, what else does off-site stock storage have to offer for your business?

A convenient, scalable operation for many of Britain’s small businesses

Hiren Patel, owner of Sent 4 U, an online gift company, has made external storage a key component of his business. In a recent BBC profile, he cited four major benefits of stock storage compared to traditional storage options:

  • Its flexibility, which allows businesses to rapidly scale their operations
  • Its short-notice periods, which suit businesses with fluctuating demand
  • Its low overheads, which let companies price their goods competitively
  • Its simplicity – fees like council tax are simply included in the rent

Patel is one of many UK entrepreneurs using storage units – units typically thought of as storage spaces for household items such as furniture – as stock storage units for his growing business.

Storage units have played an important role in the growth of hundreds of businesses across the UK. The Little Legs Company, another small business profiles by the BBC, started using external storage after its stock grew too large to store at home.

The incredible overheads of warehouse storage are avoided

Since the economic crisis of 2008, the confidence that many businesses enjoyed – both in the financial sector and in other industries – has been replaced by cautious and calculated scepticism.

Many entrepreneurs are now, more than ever before, aware that investing in large-scale storage in the form of a warehouse might give them the breathing room they need when times are good, but it can become a liability when business is bad.

External storage, however, has no such downside. With companies offering notice periods that are often as low as just one month, businesses can easily scale up and down to ensure they only pay for storage space they need, not the space they don’t.

An increasing number of storage firms offer business services

For many e-commerce companies, running a physical office can have a serious effect on their profit margin. With higher operating costs, they’re forced to raise the cost of their products – a choice that often negatively affects customer demand.

In response to the growing demand for commercial self storage, many of today’s self storage firms are beginning to accept deliveries on behalf of their customers, letting businesses further reduce their involvement in stock as well as their costs.

While receiving a shipment of new stock once involved managing a physical office and fulfilment department, today it’s as simple as placing an order and providing a storage provider’s address for a business to order new inventory.

External stock storage isn’t just for e-commerce businesses

While e-commerce businesses benefit the most from inexpensive off-site storage, it’s not just the digital commerce sector that benefits from self storage. Even High Street retailers are using external stock storage to their advantage to save money.

With real estate prices on the rise and rents for many commercial properties in city centres extremely costly, renting a smaller retail space and storing stock off-site is a fantastic way for many small retail businesses to lower their operating costs.

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Nick Saltmarsh / CC 2.0 / Profitic.com

With real estate prices on the rise and rents for many commercial properties in city centres extremely costly, renting a smaller retail space and storing stock off-site is a fantastic way for many small retail businesses to lower their operating costs.

Keeping stock in external storage has an added benefit. Not only is it stored at a low cost, but it’s also kept secure. Almost all of the country’s external stock storage units feature extensive security systems to provide peace of mind for their customers.

Could your business benefit from external stock storage?

As businesses expand, the need for reliable storage space grows exponentially. Each good month means increased demand, increased earnings and, for product-focused businesses, increased storage requirements.

Whether your business is growing at a rapid pace and needs a scalable form of stock storage that can grow alongside it or you’d simply like to decrease your total storage costs, external stock storage is an extremely appealing option.

From its low costs to its simplicity – your business, as a customer of the storage firm rather than a tenant, won’t be required to pay council tax – external storage offers a wide range of advantages.

With scalability such an important aspect of many modern businesses, storing your company’s stock off-site in a private storage unit could be the best logistical decision your business ever makes.

If you’re interested in finding out more, email info@storefirst.com or call 01282 330 330.

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