If you run a start-up, you’ll have realized your budget justifies microscopes. To even see it, that is. That’s a problem in Singapore, where warehousing may be the only service more overpriced than Starhub sports channels. In fact, the leading logistical problem for local start-ups is “Where do we keep all our stuff?” In this article, I look at how you can store your product without going bankrupt:
1. Worry Less About Delivery Delay
It slows delivery, but you can always wait for orders before producing stock. Think about it: When you make a huge batch of something:
- It costs money to warehouse it
- It expires (yes, even software. And end users hate downloading the latest version)
- It raises your risk of bankruptcy (you’ve already spent the money, even if it doesn’t sell)
- It’s more prone to damage
When a customer signs an order to buy a product, they’ve already made a commitment. As long as you state the delivery date beforehand, customers won’t have a fit about slow delivery. Of course, all of this is product dependent: If you’re dealing with something time sensitive (e.g. indie magazines, which need to be released on a schedule), this may not be an option.
Ultimately, this is a stopgap measure for fresh start-ups. As your business grows, you’ll be able to shorten delivery times. But meanwhile, you want to channel as much money from warehousing to marketing as you can. As a general rule, a slight shortfall in stocks will cost less than maintaining a huge surplus.
2. Share Space
Consider sharing space with other businesses. This works especially well if your products are complementary; if you sell backpacks, for example, see if the local travel stores want to share space. Most businesses are happy to find someone to split rent with.
Apart from reducing storage costs, space sharing can raise your visibility. Alone, you can afford an Orchard Road store like North Korea can afford food. But working with a bigger partner, you can access more desirable locations. Think of those bistros or CD stores, which take up a small corner of a bigger retail store.
Just be sure you have all agreements in writing. Also, you’d best adapt to the other businesses’ work schedules; You can’t close at six if your fellow business closes at nine.
3. Don’t Standardize Production Schedules
Learn to nitpick and micro-manage; it’s a key skill in small business. Rather than flat out produce “five of everything” and chuck it on a shelf, track your sales individually. You want to store more of what sells, and less of what doesn’t.
Standardizing your production schedule makes things fast and simple. But it’s less efficient than a one-legged bicyclist: Aside from needing more space, you’ll be spending money on products you can’t sell. So until you can afford huge warehouses, make it a point to constantly adapt production routines. And live with the fact that sometimes, this method will create under-supply.
By storing only products that are sold fast, you can minimize the storage space you require. Besides, it makes it easier to do stock takes.
4. Repair or Replace?
Sometimes you mess up a product. Sometimes the customer’s an idiot and breaks it. Sometimes the deliveryman associates package handling with long distancing hurling. Whatever the case, there are situations when you need to replace a product. Or do you repair it?
Depending on your product type, the answer will vary. In general, repairing a product takes a lot more space. If your start-up sells hiking equipment, for example, you’re going to have spare parts and “under repair” products everywhere. Unless you want your shop to look like half of Sungei Road moved in, you’re going to need storage for that.
Sometimes, a “repair” option can rack up so much storage costs, you’re better off just replacing things. And in some cases, your customers are happier getting a new one. Conduct surveys, crunch your numbers, and figure out which is cheaper for you.
5. Go Residential
Find a house that’s unoccupied, then break in and store your stuff. Nah, just kidding. I was thinking of tracking readership via episodes of Singapore’s Most Retarded Crimes (sometimes called Crimewatch). But seriously, residential storage is a possibility.
As a last resort, approach relatives and friends. Suggest paying them for storage space. Families will mind, but most bachelors and bachelorettes won’t. Hey, when you stayed in a college dorm, wouldn’t you have killed to make money that way? You’d be surprised at how much stuff can fit even into a small apartment.
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