Increasing your profits by saving space
Everyone has heard the expression “time is money”. A corollary to that might be “space is money”. Many companies whether they are expanding an existing facility, buying or building a new facility or leasing existing space know all too well that adding, purchasing or leasing space is expensive.
Costs vary depending on region. RS Means Company shows estimates of warehouse new construction to be over $104 per square foot of space. Source. This means that a very modest 20,000 square foot facility would cost over 2 million dollars. Leasing existing space is also expensive, but as with most existing space, there are advantages and disadvantages. By perusing the LoopNet website one finds typical leasing costs can start in the range of 9.00 per square foot per year and go up from there. Source. That figure does not account for any build out or modification cost that would probably be required to remodel the facility to fit your needs.
We found a modest warehouse facility on Results Real Estate Inc website (www.resultsrealestateinc.com) with a selling price of $550,000 for a 6585 square foot facility or an option to lease of 6.50 per square foot per year. Source.
The facility lease or purchase costs are just the beginning of the costs for a facility. Some of the major ongoing costs of a facility include:
- Utilities average 2.25 per square foot per year. (source)
- Maintenance and repair averages $1.75 per square foot per year. (source)
- Cleaning averages $1.40 per square foot per year. (source)
The costs above don’t include state and local taxes and many other taxes that a city, county or township might charge. Cost of owning and operating simple warehouse space is going to probably exceed 14.00 per square foot per year. So that nice little 8000 square foot facility will probably cost well over $110,000 dollars per year.
The point is that saving space, can save money. Avoiding adding space will avoid spending money. Typical methods for saving space include:
- Inventory reduction/control
- Minimize cycle time
- Increase operation efficiency
- Employ lean manufacturing techniques
- Maximize height available ( 2 tiers instead of one, or employ efficient stacking systems for inventory)
We will add another way to save space: Collapsible reusable shipping and storage containers. A container when collapsed to a flat state will take up less than 10% of the space when in use. So with space costs as high as they are, it makes sense to invest a little more money for collapsible, reusable containers. The following are just a few of the options Packnet can offer for collapsible storage and shipping containers:
- Packnet is a distributor of Buckhorn which makes variety of highly durable, reusable and collapsible storage containers. More info.
- Packnet has its own Slotlock TM containers that are not only collapsible, but require no hardware to assemble. More info.
- Packnet has also fabricated custom corrugated plastic containers that are collapsible and can be used repeatedly. See example here.
Packnet also offers JIT delivery of pre-assembled packaging kits, which keeps your space requirements to a minimum.
Packnet has a ton of experience and expertise in packaging design, and a wealth of material knowledge. In addition, Packnet has significant fabrication and assembly capability that can efficiently manufacture any build quantity. Our vast capabilities combined with our complete focus on fast response, makes Packnet your ideal custom packaging partner.