- Cost to physically store inventory
- Cost to finance inventory
- Cost of inventory obsolescence
We’ll talk about how Packsize helps reduce all three of these costs briefly, but if you’re interested in getting the nitty-gritty details on how this works, contact us and talk to one of our representatives. You can send us an email by clicking the link below:
Now, let’s start off by looking at the cost of physically storing inventory:
1. The Cost to Physically Store Inventory
Without an On Demand Packaging® system in place, warehouses have to carry pallets for every SKU of box that they use. If you carry a lot of different box sizes, this can add up to a lot of pallets pretty quickly—which leads to a lot of space being taken up in your warehouse. In fact, your average pallet is 40″ x 48″—or about 13 ft2.
Now, how much do you lease your warehouse for? Obviously this will vary wildly for readers, but if the annual rate per square foot is $3 (which is probably the minimum payment once utilities and other overhead costs are factored in), you’re already spending at least $39 per pallet to store boxes.Of course, most warehouses store things in stacks or on racks, but the point still stands—you are paying to store anything that takes up space in your warehouse.
With On Demand Packaging® soltuions in place, you house corrugated instead of boxes. This will often cut the number of pallets a customer has by 80 percent. Let me say that again: we usually cut the number of pallets needed by 80 percent.