End of Financial Year: managing surplus warehouse space

Are you a third-party logistics (3PL) provider with unused storage space in your warehouse? Are you a Product Owner with inventory levels that have dropped as we approach the end of financial year (EOFY)?

Rather than allowing this surplus warehouse space to remain idle and drain resources, you may be able to turn it into a source of revenue. In this article we explore your options when it comes to managing surplus space, and if you are in the opposite position of requiring overflow storage, this could be a great opportunity to quickly secure short-term warehouse storage.

Don’t pay for space you don’t use

Coming up to the end of financial year, you may discover that your stock levels have gone down leaving you with excess space in your warehouse. If there is no immediate need to use this space, you could find that sub-leasing this space is an option that may save you money, or you could look into providing this additional space as short-term overflow storage solution for another business.

In both cases you are likely to be looking at ways to reduce your costs in the new financial year in order to manage your business operating costs better. To put it simply, you only want to pay for the space you need and use.

Sublease unused space

If you find yourself with surplus warehouse space that exceeds your operational needs, consider subleasing it to other businesses in need of space. This can be particularly lucrative in areas with high demand for warehouse space or during peak seasons when temporary storage solutions are in high demand. Negotiate favourable terms and rental rates to maximise your return on investment.

Strategic partnerships

By forge strategic partnerships with complementary businesses, you can leverage each other's strengths and resources. For example, you could partner with transportation companies, manufacturers, or suppliers to offer end-to-end supply chain solutions. By pooling resources and expertise, you can create value-added services that differentiate your offerings in the market and attract clients seeking comprehensive logistics solutions.

Offer overflow storage solutions to third parties

One of the most straightforward ways to monetise surplus warehouse space is by offering storage solutions to third-party businesses in need of temporary or long-term storage. This can include storing excess inventory, seasonal goods, or even equipment and machinery. By charging competitive rates for overflow storage services, you can generate a steady stream of revenue while making efficient use of available space.

For 3PL providers, offering short-term overflow storage solutions to new clients is a sensible way to increase utilisation of your surplus warehouse space when inventory levels with long-term clients drop due to EOFY sales and other seasonal troughs.

Speak with a warehousing expert

Unsure of the right strategy to manage your surplus warehouse space as we head into EOFY? Start a conversation with the warehousing experts at uTenant to explore your options.

Updated: 23 April 2024