What is Contract Warehouse and How Is It Beneficial?

A contract warehouse is a warehouse storage facility offered by a third party that stores goods on the behalf of the client. The client can access and store the goods in a warehouse based on the contract which can range from months to years. The contract will detail the cost of storing and ensure maximum protection of the goods against changing circumstances and environments. Contract warehouses also manage labeling, packing, handling of the goods, and other related activities. There are several types of warehouse options available suitable for businesses of all varying sizes. If you are a business owner, here are a few reasons why you should consider contract warehousing and how it is beneficial for your business.

Types of Warehousing 

Just like the businesses vary in size and structure, the warehousing also changes according to the client’s needs. There are different types of warehousing which include 

Private warehousing

 A wholesaler or a manufacturer can lease or own a private warehouse to store the goods. The buyer would be 100% in charge of the warehouse and managing inventory and warehouse operations. Using a private warehouse calls for a hefty investment than required for other warehouses. If you build a private warehouse, you should be patient enough to wait for at least 30 years to see a return on investment. 

Public warehousing

This is one of the cheapest ways of storing goods. Here the client does not involve in any fixed contract regarding space or resources. Instead, a monthly bill is issued based on the number of goods that go in and out of the warehouse. The warehouse works on a first-come, first-serve basis. The client needs to pay only for the space used which is comparatively very little. Public warehouses work the best for short-term storage. It is ideal as a seasonal inventory. A flip side to the public warehousing system would be that it might not be able to match the unexpected fluctuations in your inventory. If there is a sudden increase in the number of goods, you might not get enough space in a public warehouse to store the goods. 

Interested to read : Reasons to Choose A 3PL for Your Warehousing Needs

Contract warehousing 

Contract warehousing is also known by the name dedicated warehousing. It is when a company outsources its warehousing to a third-party logistics company or a larger facility. Here a client can get a dedicated space for a fixed period. It can be short-term or long-term. 

Why Choose Contract Warehousing? 

Hope you have understood what a contract warehouse. There are several reasons why a business needs contract warehousing in Oman and how it is beneficial for your business. Below are some of them. 

Reliability

Importing and exporting goods to and from countries is a challenging task. The sudden political and environmental changes can affect the goods in transit and can cost the business much. To avoid such unprecedented and unpredictable situations, it is safer to store the goods in a contract warehouse with complete security. With the help of contract warehousing, businesses can ensure the continuous and timely delivery of goods. Limit your expenses by choosing the right warehouse. And be a reliable service provider for your customers with timely deliveries. 

Interested to read: What to Look When Selecting A Warehousing Partner

Lower costs and fees

The main benefit of Contract warehousing is its lower costs. Often the two parties come to a fixed agreement regarding the payment and stick to it until the end of the agreement. Depending on a contract warehouse reduces the expenses when compared to managing your warehouse. The latter would call for expenses such as renovation, maintenance, utilities, and others. All these can be saved by depending upon a contract warehouse. Avoid paying taxes for the goods while it is stored in a warehouse. It can help businesses save huge amounts of money. 

Enjoy value-added services

 Warehouses do not only store the goods but tend to do it around the clock. They also do Other value-added services such as pick and pack orders, packaging, product handling, etc. 

Read to know the benefits of using an outsourced warehouse.

Locked-in service period 

It is possible for the client to extend the contract period. Also while you are involved in a contract with the warehouse, your company will be protected from all unexpected expenses. The contract will mention in detail the monthly and annual costs of the warehouse. 

Running a business in itself is hectic. Keeping the flow of goods and services streamlined adds to it. Make it easy for you and your business by outsourcing it to the best logistics company in Oman. Depending on a contracted warehouse will help you streamline the import and export of goods and prepare against unexpected changes without losing any dime. 

Feel free to contact us : +968 24955777 96897441754