Skip to content


Warehouses of any size, once they reach a certain threshold of income and product intake, have a lot of financial details they need to keep an eye on.

Even if you’re not the head of the financial department, warehouse managers still need to factor cost and revenue into everything they do, as financial statements can have a huge impact on your ability to replenish stock, manage your current inventory, and plan for the future in regards to what items you need (and when you need them).

No matter what role you serve in your warehouse, or how your financials are handled, here’s five monthly charges that should always be taken into account to help prepare for the future:


Receiving: When receiving goods, there’s a few ways to track the overall cost, but generally what you need to focus on is the cost per item or per pallet. The true cost of a palletized item combines both the cost or value of the good itself, as well as how much “work” is required to receive it – ‘work’, in this case, referring to the labor spent organizing, sorting, and tracking each individual SKU or UPC on the pallet. Intangible costs such as this will play a huge role in your overall warehouse expense calculations.


Storage: This is the big one. No matter how many pallet racks, steel shelves, and other types of commercial shelves you use, you need to keep an eye on how much space your products are currently taking up to prevent overcrowding or damaged goods. The best way to check this is to see how many locations (or storage bins) a specific product or SKU takes up, and then see how many products you need to store overall. This can give you an idea of where you need to make product reductions, and what you can do to help manage your space usage.


Pick & Pack: Similar to the cost of handling the goods upon receiving, the labor costs involved with finding the items, picking them, and packing them for shipment can begin to add up. Do you have workers wasting time due to an inefficient zone layout? Do you have a dedicated picking staff, or does your team have to spend time on picking that they could be using for other tasks? See where the inefficiencies start with your picking team and work from there to better find opportunities to streamline and cut expenses.


Shipping: Even after the item has been found and is ready to hit the bricks, shipping costs can add up. Do you have your own shipping account, or are you working with one of your clients or vendors to use theirs? See if you can find a balance in shipping costs vs. overall destination, and consider adding a flat-rate shipping option like so many other retailers are starting to look into.


Consumables/Miscellaneous: No matter how meticulous your warehouse operation may be, there’s always the little things that help you get work done that may go unnoticed. Things like shelf labels, hazardous materials storage for batteries and chemicals, product breakdowns, and the like. Small uncategorized steps like this have a habit of falling through the cracks, and can start to add up financially unless they’re carefully tracked and monitored. Don’t let anything too small slip your notice, and you’ll start having a much better idea of where you are, fiscally speaking.

Comments are closed.

Back to top