January 26, 2022

7 Easy Steps to Improve Warehouse Profitability

Even though a warehouse is meant for storage purposes, the expenses incurred on its maintenance and the income received by the material storage should be accounted for. The difference between the income and the expenses during a particular period is called warehouse business profit.

The concept of warehouse business profit plays a vital role in the case of warehouses that let down their warehouse to several manufacturers (who do not have their warehouse) on rent for storage purposes. Earning a good profit depends on efficient warehouse management. A better warehouse should handle any issues related to the storage of materials. The following seven easy steps to improve warehouse profitability will increase profitability.

1. Check The Warehouse Area

 If the warehouse is newly built, the manager should check the warehouse area and analyze how much material can be stored. As warehousing of products is considered a business, every inch of space will earn revenue.

2. Plan Where The Material Should Be Placed

Once the warehouse area is analyzed, the manager should plan the placement or storage of material. The materials in demand have to be given more importance and stored in such a place to be dispatched quickly. As the warehouse is business-oriented, it may contain more products related to different manufacturers. So the material should be placed so that there won't be any confusion in case of any product requirement. A sufficient gap should be maintained between the products, and fixing identification marks will make removing the products easy.

3. Ordering of material

The manager should check the warehouse frequently and make a list of available products in the warehouse. Based on the availability of the materials, they have to place an order with the manufacturer. Ordering the right product at the right time will increase profitability. Hence, the manager must always check the market status and product movement. 

4. Clearance Of Material

If the warehouse manager finds any damage to the material, he should send it back to the manufacturer. As space is significant in a warehouse, the space occupied by damaged goods will be considered a loss by the warehouse management. If things are delayed, there are chances of the denial from the manufacturer to accept the product and stoppage of payment. If something can be avoided, it is advisable to avoid them.

5. Unloading And Loading Of The Material

 As soon as the material is received from the manufacturer, it should be done carefully. Damage to the product by the unloading staff is a loss to the warehouse management. The manufacturer won't take responsibility. The same happens in the case of loading material while dispatching it to the destination. This will increase the supply chain profitability.

6. Dispatch of material

The material received by the warehouse should be dispatched on a FIFO( first-in, first-out) basis. This way, all the old stock is cleared, and there will be ample space for the new store.  

7. Maintenance Of The Warehouse

A focus on regular warehouse maintenance will keep the products neat, clean, and dust-free. A clean environment will keep the products safe. When the warehouse is maintained correctly, identification of products also will be easy.


To improve warehouse profitability, you need to find the right balance of labor and technology. Get started by thinking about your current store layout so that you can figure out how much space is needed for each type of product. Once this is done, it's time to invest in order management software like Conveyr's Warehouse Management System (WMS). It will help increase efficiency because all orders are managed from one place.

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