As businesses of all sizes—especially after this year—know, warehousing can often be one of the most inflexible points along the global supply chain. If not building out their own unique warehouses, it is common for businesses to not only enter into long-term warehousing contracts which extend far into the unknown future, but they must also decide, very literally, where and how to position themselves and their goods. And as ShipHawk research has shown, while with one strategically placed distribution center, companies can reach 73 percent of the US via ground shipping in two days, with two distribution centers, this number jumps to 90 percent, to 91 percent with three, and to 95 percent with four distribution points. This is where dynamic and pop-up warehouses come in.
For companies desiring the many advantages of warehousing—whether it be the added space or the outsourcing of shipping—but are weary of the lack of flexibility of traditional warehouse models, dynamic warehouse strategies offer a variety of services from access to a host of conveniently located DCs, to temporary storage nearby.
Some dynamic warehouse options operate out of empty space in existing 3PL operations while others use old shopping malls, retail stores, or other real estate strategically located close to dense consumer populations. Think of the Halloween superstore that pops up every year. Using the same logic, dynamic warehouse networks allow companies to store merchandise in temporary locations that they don’t own. Seasonal fluctuation in demand, and therefore inventory, is a huge issue in every sector for which very few companies have sustainable responses—Nike famously evened-out yearly demand by adding two new footwear periods in addition to the existing “Spring” and “Back-to-School” seasons. As most businesses don’t have quite this leverage, dynamic warehousing and pop-up warehouses are innovative solutions.
Not only do dynamic warehouses offer temporary storage and fulfillment services, they also frequently support cross-docking, where bulk orders can be received, sorted, and reshipped to the end customer without the need for overnight storage. I have seen these services speed delivery times, reduce product handling, and at times, bypass the need for storage completely. Large carriers and 3PLs have used cross-docks for years to speed service and reduce storage costs. Dynamic warehousing options are now making these services accessible to smaller shippers. Think of it like a nationwide directory of distribution points you can instantly tap into.
And dynamic warehouses needn’t just be for those planning for or in the process of scaling. As one small business owner said of his experience using Flowspace’s services, “I need flexibility. I need a temporary warehousing solution to buy me some time for the deal to close before I commit to a new long-term lease. This is where Flowspace flat rate flexible warehousing is so useful. I ship my inventory, they receive it and store it until I free up the space to bring it back. If a surprise comes up and I need to ship some of that inventory to a customer, I can do it through their inventory software.” A service that can be equally beneficial to outfits of all sizes and needs is crucial to helping establish a diversity of businesses in the increasingly virtual marketplace.
For more advice on modern delivery automation for small businesses, you can find Adapt or Die on Amazon.
Jeremy Bodenhamer is a leading expert at the intersection of shipping and e-commerce. He has been featured in Inc., TechCrunch, AOL, Fortune, Internet Retailer, and Entrepreneur; is a frequent speaker on innovation, technology, and logistics; and was a 2018 Supply Chain & Executive Pro to Know. Jeremy is an active volunteer in the community, an avid Crossfitter and surfer, and champion of a company culture that promotes health, family, and happiness among employees. He lives in Santa Barbara with his wife—educator and youth advocate, Bethany Bodenhamer—and their three sons.