Maybe you’re preparing for the holiday rush, and you’ve got some stocks that don’t fit your primary warehouse. Perhaps you’ve over-ordered to avoid stockouts, but now you’ve got excess inventory sitting idle for a few months. Some businesses struggle with inaccurate forecasts, which also results in surplus stock. Whatever the cause, seasonal inventory overflow can be tricky to handle, especially if your warehouse is already at capacity.
Paying for extra warehouse space can be costly and unnecessary, especially if you don’t expect to hold the stocks all year long. That’s where temporary, portable storage options come in handy. Pro Box Portable Storage shares what these options mean for you and how they can help your business.
Key Takeaways
Managing seasonal inventory doesn’t have to be costly. Here are key points to remember:
- You can use temporary, portable storage solutions — a process called overflow warehousing — to store inventory right at your facility.
- Overflow warehousing solutions are flexible and benefit many industries, including retail, e-commerce, manufacturing and third-party logistics services.
- Creating an accurate estimate of your storage needs helps you prevent paying for extra space.
- You can plan ahead for storage, especially for predictable seasonal activities, such as promotional events and holidays.
- Finding the right storage solution requires evaluating options carefully, from their storage sizes to design and security features.
How Businesses Can Manage Excess Inventory
Businesses can manage inventory overflow through temporary or permanent storage solutions. However, permanent solutions, such as warehouses with long-term contracts, come with unnecessary overhead costs. You might end up with empty warehouses once you lose all excess inventory through discounts or other reselling strategies. Portable storage enables you to rent storage space as needed and have it wherever you need it, suitable for seasonal fluctuations.
What Is Overflow Warehousing?
Overflow warehousing pertains to the use of temporary, semipermanent or flexible storage space to supplement your primary warehouse facilities. It’s ideal for businesses that experience seasonal peaks, changes in market conditions and unexpected surges. You can handle demand shifts without committing to long-term storage. It also helps you avoid operational bottlenecks and better meet customer expectations.
For instance, if you’re an online business, your customers expect fast turnaround times for their orders. Delivery time is one factor that influences customer satisfaction, particularly for e-commerce platforms. With a portable, temporary storage space closer to your customer’s region, you can deliver goods more quickly and easily. You can also expand or contract as needed, without requiring the effort of purchasing or leasing a permanent warehouse.
Benefits of Overflow Warehousing
Demand for temporary storage solutions is increasing across multiple industries. Retail businesses, farmers, construction firms and event organizers are some of the few that enjoy these benefits:
- Flexible terms: Temporary storage solutions come with short- and long-term options, which cater to varying business needs.
- Customizable features: These solutions can include add-ons or design customizations that cater to your preferences — for instance, you might want some shelving to optimize storage space or ramps to make inventory movement easier.
- Streamlined operations: Temporary solutions prevent back orders and stockouts, which lets you continue your business operations smoothly during high-demand periods.
- Sustainable practice: Temporary storage facilities don’t have the same environmental impact as traditional warehouses. Portable containers don’t require construction and are repurposable. For instance, used shipping containers contribute to the circular economy — you’re extending the lifespan of these durable steel structures, keeping them in circulation for as long as possible.
Retailers, in particular, can maintain optimal stock levels without overcrowding primary warehouse facilities. Manufacturers can store excess parts, which are often valuable during supplier delays or new product launches, when inventory needs can be unpredictable. Third-party logistics providers can also navigate storage constraints more easily, meeting clients’ complex inventory requirements without disrupting daily operations.
How to Manage Inventory Overflow
Using onsite portable storage containers is an effective way to manage seasonal inventory. But before you compare storage solutions, you need to do three things:
1. Estimate the Storage Space You Need
The whole point of avoiding additional warehouse leases is to avoid paying for unnecessary storage space during periods that they’re empty. In the same way, you need to calculate how much storage you realistically need to avoid overpaying for temporary storage. Here’s how:
- Make an accurate list of inventory: List all excess inventory you have, including other materials you plan to store. For instance, you may list your products, packaging supplies, seasonal decor, retail displays, extra signage, power tools and cleaning items.
- Estimate volume size requirements: Calculate the volume size for each item — estimate the length, width and height in feet and multiply to get the cubic feet. Add everything together.
- Identify the storage unit size through your calculated volume: You typically choose storage units based on square footage, but consider the floor space and vertical stacking height. You likely won’t use 100% of the storage container’s cubic volume since you’ll need to account for access, safe stacking and oddly shaped packages.
- Consider how much access you need: If you don’t intend to access the inventory regularly, then you may pack the materials tightly. This approach might result in needing a smaller storage container. However, if the storage acts as a warehouse extension where you’ll access the inventory daily or weekly, you need to account for small walkways, shelving and labeled zones.
- Incorporate a growth buffer: Even if you’re using the storage for seasonal inventory, it helps to account for future needs. You might accumulate more equipment or seasonal products. This buffer can save you the potential cost of having to switch to or add a larger storage container later on.
2. Identify the Applicable Local Requirements
Consider whether your business needs permits based on your local regulations. You might need zoning or building permits for temporary structures. In San Diego, you can place sea cargo containers in commercial and industrial zones if you have a legally established primary use onsite, and if you maintain all parking requirements. In Howard County, you don’t need a zoning permit if the storage container is an accessory structure to a principal farming use within the Rural Conservation, Rural Residential and Rural: Environmental Development districts.
Following these regulations protects you from potential fines, while noncompliance risks operational disruptions.
3. Prepare Your Site for Drop-Off
Portable storage containers have different sizes and weight limits, which impact site requirements. For instance, your site must be able to support the container’s weight, especially when it’s loaded with your inventory and equipment. Soft and uneven ground can cause containers to settle or shift, impacting your ability to open and close doors smoothly. A stable base also prevents moisture buildup and ensures the container remains level.
The following bases can work great as a storage site:
- Concrete slab: Acts as a solid, level base
- Gravel: Offers stability with excellent drainage
- Asphalt: Provides a smooth, level surface
- Steel skids: Protect containers from uneven or soft terrain
When to Plan for Seasonal Inventory
Planning for seasonal inventory is possible if you understand which business situations to expect. For instance, you may plan for:
- Holiday seasons: Businesses typically expect condensed shopping periods during holiday seasons, such as Christmas. Looking for temporary storage leases during these periods can help you navigate inventory overflow.
- Promotional periods: Your business may set early ordering periods or major promotional events that require bulk buying of stocks. Large stock quantities can temporarily overwhelm your primary warehouse, necessitating a separate storage solution.
- Business growth opportunities: You might plan to enter new markets, launch new products or merge with another company. These business growth opportunities often come with unpredictable inventory needs. Using onsite storage containers can offer breathing room before you move toward a larger, more permanent warehouse purchase.
- Infrastructure changes: Maybe your business will undergo expansion or renovation, or move entirely to a new facility. These events require temporary storage for your affected inventory.
Some instances can be hard to plan for, but can still benefit from temporary storage. For instance, when inventory arrives earlier or later than you expect, you might not have the necessary space in your warehouse. Natural disasters and other emergencies also put inventory at risk, requiring temporary storage elsewhere.
How to Choose the Right Seasonal Storage Solution
The right storage solution accommodates your excess inventory and handling equipment, making daily operations and trucking activities easier. You can process goods in a minimal turnaround time, protecting customer trust. Consider the following criteria when selecting an option:
1. Storage Size and Condition
You can purchase a used or new portable storage container, or rent a refurbished one for a set period. Both options protect your inventory from the weather and external factors, thanks to 14-gauge corrugated steel and watertight gaskets. You can also save more with used containers, even if they may need repairs or repainting. However, new, one-trip and refurbished containers are more pleasing to the eye for your personnel and passersby.
Storage containers come in different capacities, typically ranging from 20’ to 40’, each with its own height clearance. Choose a size based on your inventory calculations. If you’re uncertain whether the container will fit your site, providers can check out your site and confirm for you.
2. Design and Add-Ons
Temporary storage containers come with different designs — for instance, you may be looking for side-open containers or double-door options. If you’re buying instead of renting, you can also opt for customization, adding doors, windows, skylights, and framing. You can also opt for containers with ventilation and electrical systems.
Rental container add-ons can improve your storage efficiency. For instance, shelves enable you to organize your boxes and make the most out of the storage space. Pipe racks keep the piping and other long materials off the floor and out of the way. Ramps make loading and unloading inventory quick and easy.
3. Security Features
Ideally, you’ll want easy-to-open doors without sacrificing security. Look for robust security features that can protect your inventory effectively. For instance, some storage containers come with heavy-duty corrugated steel, solid interior locking bars and multiple security plates that prevent any break-in attempts, even with drills and pry bars. These features can give you peace of mind, especially if you plan to position these storage containers in remote areas.
4. Contract Terms
Renting portable storage containers is often the ideal solution for seasonal inventory overflow. But before you sign any contract, carefully review the terms to see that they’re adequate for your specific needs. Will you be loading the inventory yourself, or will the provider manage the packaging and handling for you? Consider if the contract comes with flexible storage durations. Providers typically transport the containers to your site.
Frequently Asked Questions
Businesses with seasonal inventory often ask the following questions:
What Is the 80/20 Rule in Inventory?
The 80/20 rule is based on the Pareto principle, stating that about 80% of the effects in any system originate from 20% of the causes. When applied to inventory, you can estimate that 20% of your inventory items comprise 80% of the total inventory value, such as sales volume or consumption value. Understanding which of your stocks contributes the most to your business lets you set priorities when negotiating prices with suppliers.
This estimate can also affect your priorities when reordering and arranging inventory in your storage spaces. For instance, you may position your top 20% in easily accessible areas.
What Are the 7S Rules in Warehouse Management?
The 7S framework offers a structured approach to how you optimize your workflow. It consists of:
- Sort: Sorting eliminates unnecessary items, requiring you to determine which ones add value to your operations. For instance, you may want to get rid of obsolete inventory or unused equipment.
- Set in order: Setting the place in order requires organizing your essential items to increase operational efficiency. This organization reduces wasted time and space.
- Shine: Shine pertains to the warehouse’s cleanliness — apart from simply polishing the surfaces, you clean the space thoroughly to prevent risks that can arise from neglect and disorder.
- Standardize: Standardizing processes and workflows creates an orderly and efficient environment. These processes also lead to less confusion and fewer errors.
- Sustain: To sustain the operations is to continuously improve business practices. You must foster an environment that constantly iterates, instead of encouraging personnel to unthinkingly follow procedures.
- Safety: You must ensure that all employees enjoy a safe environment and mitigate risks for accidents and injuries.
- Security: For a secure warehouse, ensure that only authorized personnel can access the area.
How to Reduce Inventory Surplus
While it can be tricky to prevent inventory surplus entirely, you can reduce it through different marketing strategies. For instance, you can:
- Offer sales or discounts regularly or after holiday seasons.
- Bundle products and services, such as slower-moving products with a popular one.
- Repackage products as rewards or incentives to build customer relationships, especially for products with shorter shelf lives.
Eliminate Unnecessary Warehousing Costs
Expanding warehouse space just to accommodate seasonal inventory can lead to unnecessary overhead costs. Opting for temporary, portable storage solutions can help you manage and store the surplus. This method pertains to the concept of overflow warehousing, which is often beneficial for many industries, such as retail, e-commerce, manufacturers and third-party logistics providers. Providers often offer flexible terms and customizable solutions, so you can easily find an option that fits your seasonal needs.
To get started, you need to calculate the required storage space, review relevant local regulations and determine if your site is suitable for portable containers. Then, carefully consider providers based on their container conditions and sizes, customization options, security features and contract terms.
