How does Pop-Up Warehousing Work?

Throughout the year, many companies across the entire logistics industry suffer from fluctuations in their volume. And although many companies know it is bound to happen, the most common solutions end up being costly for the company.  In order to avoid costly mistakes, we have everything you need to know about pop-up warehousing. Let’s get started.

What is Pop-Up Warehousing?

A pop-up warehouse is a temporary place for companies to store and sell some of their products. The pop-up warehouse is intended to help assist companies during their short-term influx of orders throughout the year. They only house a small portion of the company’s products and are not as high tech as some other warehouses can be. 

What Causes the Fluctuations?

Some potential causes of the fluctuations can be:

Seasonality

Many products sold by companies are only needed during specific times of the year. For example, many states do not need sunscreen for a good chunk of the year and only purchase it for the summer months. This causes a spike in sales when it comes time to prepare for summer. And although companies know this particular spike is coming, the seasonal influx is still larger than the normal outflow of products – causing a company to need more space for a temporary period of time.  

Sales

Promotions and sales cause an increase in the amount of product moving out the door – and this is why stores utilize these marketing tactics. But similar to seasonality, the company is still in need of a temporary solution for their short-term influx in sales.  

Bulk Buys

At times it may make sense for a company to purchase certain items in bulk to save cost. This causes a temporary storage need that needs to be fulfilled.  

Testing New Markets

Pop-up warehousing is a risk-free solution for testing out new markets. Pop-up warehousing allows companies to put their product closer to the consumer while they test out the market.  

Introducing New Products

New product launches require companies to stock up on the newly released product in order to keep up with the demand. Pop-up warehousing allows companies to temporarily adjust their warehousing needs to launch the new product.  

Costly alternatives to Pop-Up warehousing

It is important to understand the key differences between a warehouse and fulfillment center so that your company can make an informed decision on which route is best for your company. 

Long-term leases

This option becomes expensive because businesses are left with empty warehouses after their spike in sales, but are stuck in the lease they signed. Pop-up warehousing offers short-term solutions with no commitment so companies don’t end up paying for space they aren’t using. 

Shuffle existing product

Companies that don’t want to sign a new lease deal end up spending large amounts of money trying to ship around their products to their various warehouses to keep up with the demand. Pop-up warehousing allows companies to temporarily lease space in areas they need it most.  

Overloading Existing Warehouses

Trying to squeeze large amounts of inventory into current warehouses can cause many problems that could lead to customer dissatisfaction. Utilizing pop-up warehousing allows companies to keep their supply chain organized during spikes. 

Pop-up warehousing is the perfect way for businesses to keep their supply chains flexible. Pop-up warehousing allows businesses to change warehouse locations to keep up with the demand, test out new markets, release new products, or shorten delivery times.  

Want to learn more about how warehousing can transform your business? Read our latest blog on the on-demand warehousing model.

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