The 4 Top Tips to Reduce Warehouse Costs

On average, a warehouse business costs between $10,000 and $50,000 just to set up. Once the setup is complete, a lot of operating costs go into building up the business.

In the warehousing industry, small mistakes can cost money. However, there are ways to reduce warehouse costs, prevent mistakes, and increase productivity.

Not sure what you need to do to cut costs? Keep reading for the top four ideas.

  1. Cross-Train Employees

One way to reduce warehouse costs is by cross-training current and new employees. With the holidays rolling around, you might have more time off requests than usual.

Make the most of the staff you have available by assigning them multiple job roles. You can shift workers around during the busier times of the year for continuous production.

Create your own training program that incorporates this method. Allow employees to shadow tenured employees and gain valuable job experience.

  1. Implement Software and Smart Tools

You can upgrade warehousing tasks by using software and smart tools. Although implementing these things can help with multiple jobs, many warehouse managers opt for software to better their inventory management.

Poor inventory management is costly because it can cause backorders, increased shipping costs, and off-schedule deliveries. Plus, if you overorder stock because you fail to manage inventory, you’ll experience warehouse waste.

To avoid this issue, you can use software like inventory management systems (IMS) and use smart tools like handled scanners and beacons. Both options will help you improve inventory management accuracy and reduce costs.

The goal of software and smart tool additions should be to lessen the cost of a shipping order by streamlining the process. Apply industry best practices to reduce the amount of handling and costly touches.

Cross-docking is a part of WMS software that can reduce handling costs to improve shipping costs.

  1. Retain Your Employees

When you upgrade a warehouse, you are likely to keep your employees for longer. Automating some of the manual tasks can lead to employee retention.

Often, warehouse employees are overworked and will move on to a different company. To increase warehouse savings, you’ll want to retain your employees to avoid spending money hiring and training new ones.

Focus on overall job satisfaction by allowing employees to take rest breaks, be rewarded with bonuses, and compete for promotions.

  1. Reduce Energy Costs

A lot of warehouses are open and working all day, every day. It can be hard to reduce energy costs unless you shut the entire place down.

However, there are a few easy solutions that can greatly reduce energy costs in a warehouse. For example, you can opt for commercial LED lighting from

Reducing Warehouse Costs Where Possible

Increasing productivity is a sure way to reduce warehouse costs, but it can only get you so far. To ensure your costs go down, you might need to make changes within the business.

These top tips are common ways to reduce warehouse costs, but measuring where your costs are coming from might prove that cutting costs elsewhere is more beneficial.

No matter the need for cutting costs, these four options can work and benefit the business in additional ways. For more articles like this, check out the other posts on our blog.


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