Webshop is online! … but where do you keep your stock?
The number of online stores in the Netherlands has been growing steadily for some time now. It already did that before the start of the corona pandemic, but since then online shopping has completely exploded. Now that countless consumers who may have never made an online purchase have also turned to digital shopping, many more entrepreneurs than before are resorting to starting an online store. Whether or not in addition to a physical store.
However, they face a number of challenges. First of all, of course, the general, technical matters that come with the start of an online store. However, there are also practical challenges that arise that many entrepreneurs do not fully understand beforehand. Being able to store your stock of products and articles in a safe, easily accessible and not too expensive place is one of those practical challenges. Not everyone thinks about it, but it is a precondition to be able to run your webshop in a good way.
Advantages of externally storing your webshop stock
If you sell ten pieces of knitting every week, you obviously just put your stock in the attic or in your hobby room. However, most webshop owners bet on a slightly larger scale. Then it is really recommended not to store your stock at home, but at a professional location - especially if you don't have a huge shed on your plot. After all, you don't want to carry boxes full of junk to your guest room day in and day out. Keeping your inventory in an impractical location ends up costing you a disproportionate amount of time. You really want to avoid this.
External webshop storage also brings several advantages. In the first place, your stock is often properly secured at a location with camera surveillance. Also, should something happen, the stock is insured against damage and/or theft at a professional location. You can often scale up or down the space you rent at such a location at any time, so you don't run into the problem that 'the warehouse' becomes too small or is half empty and therefore generates unnecessary costs. Finally, also not unimportant: professional storage locations for webshop stock are often heated and humidity is taken into account. This way your products will stay beautiful for the longest time and they will not suffer unnecessary damage.
Which costs to pass on?
That all sounds very logical and positive, storing your webshop stock in a professional storage location. However, not every webshop owner uses it. One of the most frequently heard objections is having to pass on the costs of storage. If you keep your stock in or around your own home, you obviously do not have those costs. The comparison with shipping costs is then often made.
However, this argument does not quite hold. Storage costs, very different from shipping costs, cannot be passed on one-to-one to an individual product. This is different with shipping costs: every shipped item incurs shipping costs. The costs of renting storage space are the same every month and are not directly dependent on the number of transactions – they are operational costs. Shipping costs are directly related to the number of transactions and are therefore reflected one to one in every product.
Smart handling of storage costs
Of course, a storage space does come with costs. As a webshop owner, you can handle this smartly. If you rent a larger storage unit, you can store more inventory. The costs per cubic meter are then often lower. In addition, you can often negotiate a lower price with suppliers if you buy in bulk. In this way you can reduce the purchase price of raw materials or products. So if you do it smartly, it does not necessarily have to be much more expensive – in fact, in some cases you can end up with 0.
Dropshipping: less margin but all the arrangements
Finally: a lot entrepreneurs decide to use dropshipping. Then you do not manage your own stock, but you deliver directly from your supplier. You then pay them a small fee for processing your orders. As a seller, you are actually purely an intermediary, something that bol.com is increasingly doing, for example.
Is that useful? In practice often not. It seems enticing, but your margin is shrinking and you are working harder to arrange everything. In addition: if something goes wrong, you as the seller have to solve it, even though you did not cause the error yourself. So your dependency increases.
The chef's advice: rent a large storage area, buy large and therefore inexpensive, and make it easy on yourself that way.