Start with the customer promise.
Before comparing warehouse proposals, define what the customer needs. Order size, delivery expectations, returns, retail requirements and product handling all influence the right operating model. A facility should support those needs.
Model the cost of serving an order.
Storage and pick-and-pack charges are only part of the comparison. Examine inbound handling, minimum charges, packaging, shipping zones, returns and exception fees. Use a realistic order profile and several volume scenarios so that proposals can be compared on the same basis.
Understand inventory before adding space.
Review replenishment lead times, minimum order quantities, product range and expected sales concentration. The inventory strategy determines how much space and working capital the business needs. It also affects the cost of a slower-than-expected launch.
Test the information flow.
Clarify how orders, inventory and returns will be recorded and reconciled. Ask who resolves exceptions and what your team can see without asking for a manual report. A service relationship is easier to manage when the information is timely and understandable.
Keep the next stage in view.
Evaluate the arrangement at launch volume and at the next realistic stage of growth. Understand minimums, service commitments and the conditions for changing the relationship. The objective is an operating model that supports the business as its requirements become clearer.
