Is Multi-client Warehousing Suitable for Your Business Needs?

Data shows that logistics costs account for 20%-30% of the total operating costs of e-commerce companies, and warehousing costs are one of the main expenses. Many companies face a dilemma: choose dedicated warehousing, public warehousing or multi-client warehousing?

In order to meet the growing market demand, improve operational efficiency and reduce costs, it is crucial to choose the right warehousing model. Multi-client warehousing, as an innovative model, is becoming a golden solution to balance cost, efficiency and safety.

This article will explore the advantages of multi-client warehousing in depth and compare it with dedicated warehousing and public warehousing. At the same time, it will introduce the role of WMS (warehouse management system) in simplifying multi-client warehousing, as well as the advantages and disadvantages of multi-client warehousing, aiming to provide you with valuable solutions.

What is multi-client warehousing?

Multi-client warehousing (also known as shared warehousing or multi-user warehousing) is a warehousing model in which multiple companies share the same warehousing facilities, resources and third-party logistics (3PL) management. This model allows companies to flexibly rent warehousing space according to their own needs, while sharing equipment, labor and information technology solutions, including warehouse management systems (WMS).

What are the main types of warehousing?

Dedicated warehousing

Owned and operated exclusively by one company, suitable for large manufacturers or companies with specific needs.

Advantages: strong data privacy, full control over operations, can be tailored to business needs, and improve inventory management efficiency.

Pain points: high fixed costs (rent, manpower, equipment), low resource utilization (idle rate can reach 40% in the off-season).

Applicable scenarios: very large enterprises, high-value or sensitive goods (such as medicines, luxury goods).

Public warehousing

Operated by a third-party logistics provider, renting shared space according to short-term needs, paying according to actual usage, available for companies to rent for short or long periods of time.

Advantages: Flexible space and cost, no capital investment required, and access to a variety of project services.

Pain points: Standardized services are difficult to meet personalized needs; mixed inventory can easily lead to misdelivery or damage.

Applicable scenarios: seasonal goods or temporary promotional stocking.

Multi-client warehousing

Also known as shared warehousing, multiple customers share warehouse infrastructure, but inventory isolation and customized operations are achieved through independent partitions and WMS (warehouse management system).

Advantages: High cost-effectiveness, resource sharing, improved warehouse utilization, and reduced warehouse rent by 30%-50%.

Flexible expansion: Adjust storage space on demand to adapt to sales fluctuations.

Professional services: Integrate 3PL (third-party logistics) standardized processes (such as quality inspection, packaging, and return processing).

Applicable scenarios: small and medium-sized B2B companies, cross-border e-commerce sellers, and brands with high SKU complexity.

The role of WMS in simplifying 3PL multi-client warehousing

WMS (warehouse management system) plays a vital role in multi-client warehousing. Through functions such as scanning the code when entering the warehouse, updating inventory information in real time, and taking inventory quickly, WMS has greatly simplified the warehouse's operating procedures and improved operating efficiency. In addition, WMS can flexibly configure operating strategies such as wave picking and batch management according to business needs to further improve operational efficiency. For multi-customer warehousing, the introduction of the WMS system can ensure that the goods of different customers are managed in an orderly manner, avoid confusion and errors, and at the same time improve space utilization and reduce costs.

What are the advantages and disadvantages of multi-customer warehousing?

Advantages

Cost-effectiveness: Multi-customer warehousing reduces the warehousing cost of a single customer through resource sharing, allowing B2B companies and e-commerce sellers to obtain high-quality warehousing services at a lower cost.

Improve warehouse utilization: The WMS system optimizes warehouse layout and cargo storage methods, improves the utilization of storage space, and reduces ineffective space occupation.

Flexibility: The short-term contract of multi-customer warehousing enables enterprises to make leasing decisions freely according to changes in market conditions, reducing investment risks.

Advanced technology and risk management: Multi-customer warehousing is usually equipped with an advanced warehouse management system (WMS) that can monitor inventory in real time and optimize logistics processes. In addition, the shared warehousing model can also disperse operational risks and reduce the burden on enterprises.

Disadvantages

Communication difficulties: Since the computer terminal interfaces and network management systems of different customers may not be standardized, there may be certain difficulties in data transmission and information communication with public warehouses.

Limited personalized services: Although multi-customer warehousing provides basic warehousing services, some companies' special requirements (such as strict refrigeration requirements) may not be fully met.

How to choose the right warehousing model?

Choosing multi-customer warehousing, dedicated warehousing or public warehousing depends on the specific needs, operational priorities and financial situation of the company. The following are key factors to consider when making a choice:

Enterprise size and development stage

Startups and small and medium-sized enterprises are usually more suitable for multi-customer warehousing because this model is low-cost and flexible. Mature companies may choose dedicated warehousing if they need greater control and customized services.

Product types and requirements

For products that require specific storage conditions (such as pharmaceuticals and perishables), dedicated warehousing may be a better choice. Ordinary consumer goods can be efficiently managed in a multi-customer warehousing environment.

Demand fluctuations and seasonality

The scalability of multi-customer warehousing makes it an ideal choice to cope with seasonal demand fluctuations. Companies with high demand may be more suitable for dedicated warehousing.

Logistics Strategy

Companies with centralized logistics strategies may prefer dedicated warehousing. Companies with decentralized logistics strategies can achieve wider coverage through multi-client warehousing.

Common Problems and Solutions

Which companies are suitable for multi-client warehousing?

Multi-client warehousing is suitable for small and medium-sized enterprises, e-commerce companies, and those that need to flexibly respond to seasonal demand.

How to ensure the safety of goods in multi-client warehousing?

Adopt advanced WMS system to monitor the inventory status of warehouses in real time, and promptly discover and solve inventory problems. Introduce a variety of security control functions, such as permission management, data backup, etc., to ensure the security and integrity of warehouse data.

How to improve the operating efficiency of multi-client warehousing?

Optimize the operating process through the WMS system to achieve fast and accurate operations such as warehousing, outbound, picking, etc. of goods. Introduce automated equipment, such as robots, conveyor belts, etc., to further improve operating efficiency.

How to balance cost and service quality?

Work with professional logistics and warehousing fulfillment service providers, such as Chinadivision, to use their rich experience and advanced warehouse management system to ensure service quality while reducing costs.

Flexibly choose warehousing services according to business needs to avoid unnecessary waste.

In multi-client mode, does order processing efficiency decrease?

An efficient WMS can optimize the picking path, and parallel processing of multi-client orders can improve efficiency. Intelligent wave picking technology can reduce the walking distance of pickers by 60% and increase the average daily order volume by 3 times.

Multi-client Warehousing provides cost-effective and flexible warehousing solutions for B2B companies and e-commerce sellers. By working with professional logistics and warehousing fulfillment service providers, such as Chinadivision, you can obtain high-quality warehousing services while reducing costs and improving operational efficiency. No matter what warehousing challenges you face, we will provide you with professional solutions to ensure the smooth operation of your business. Welcome to get in touch with Chinadivision logistics and warehousing fulfillment service providers to explore the infinite possibilities of multi-client warehousing together!