
What Is Overflow Warehousing?
Why Companies Need Overflow Warehousing
There are various reasons why a company may need overflow warehousing, including the following scenarios:
- Rapid growth – If a business grows too rapidly, it might outpace available infrastructure.
- Peak seasonal demand – Peak periods often require companies to bring in more inventory than they can temporarily store, while demand is high.
- New product launches – Companies launching and marketing new products intentionally purchase a high amount of inventory, believing that demand will be high. They need somewhere to store it.
- Bulk purchasing – Businesses purchasing excess inventory at a significant discount (such as when a competitor goes out of business) need a place to store the additional goods.
- Supply chain disruptions – Delays can cause backlogs, meaning inventory scheduled to be gone is taking space away from newly arriving goods.
- Emergencies – Natural disasters or facility damage can put inventory at risk, requiring it to be temporarily stored elsewhere.
- Moving, expansions, or renovations – Any company that is moving to a new facility, expanding existing operations, or making major renovations, may need temporary space to store goods.
Key Benefits of Partnering with a 3PL for Overflow Warehousing
1. Flexibility and cost efficiency
Pay only for the space you use, not empty space that is only filled when demand increases. Make use of short- or long-term storage based on demand cycles.
2. Integrated services
Take advantage of order fulfillment, packaging, and value-added services offered by your 3PL partner.
3. Speed to market
When demand spikes, you won’t be lagging behind trying to find storage space. Therefore, your goods can get to their destinations quickly and efficiently.
4. Risk mitigation
Navigate supply chain disruptions and emergencies easier with 3PL-provided overflow warehousing in place.
5. Strategic locations
Overflow storage in a central geographic location, or one closer to key clients, will reduce shipping times and costs.
