Online Stockkeeping: Where Should Your Ecommerce Business Keep Its Inventory?

At Home

Many ecommerce startups begin by storing their inventory at home. This doesn’t cost you anything and gives you immediate access to your goods at any time. 

You do however need to consider whether you truly have enough space in your home to store all of your inventory. If you have quite a lean inventory or sell very small items, you may not need a lot of space for inventory storage. However, if you have a large inventory or sell larger products, it’s unlikely you’re going to have the space in your home.

Quite often, successful home-based inventory storage requires dedicating a room or outbuilding to storing your goods. This could include an attic, a garage, a basement, a spare bedroom or a shed. Doing this can prevent your company inventory from getting in the way of your personal life (do you really want your living room to be full of boxes?). If you don’t have this free space and can’t build a shed, you may have to consider other inventory storage options. 

In a Self-Storage Unit

Storage units can provide you with an external space to keep all of your inventory. You’ll find storage unit facilities everywhere. Each of these facilities has different types of units, charges different types of fees and has different rules - which are important to look into.

Ideally, you should try to look for a storage unit that is climate-controlled and ultra-secure (some storage facilities have strict access controls and security cameras outside every unit). Make sure that you can freely access the unit whenever you want so that you can ship products quickly. The unit should also be within budget and local enough that you don’t have to spend huge amounts of time driving there and back. 

With a 3PL Provider

3PL (third-party logistics) companies can take care of warehousing, order fulfilment and shipping for you. You’ll usually pay a monthly fee to use this service, which is based on how many items you need storing and how many items you have shipped that month. 

You will be given space within a warehouse for your goods. Other company’s goods will also be stored within that warehouse. In some cases, goods may be spread out across multiple warehouses. You won’t have control as to how these goods are stored, however you’ll have more free time to focus on other parts of your business because you don’t have to worry about order fulfilment and organizing stock. 

In a Dedicated Warehouse

For companies with a very large inventory and or very large products, renting out a dedicated warehouse may be necessary. This comes at a much higher cost, but is often worthwhile for larger companies that often face high 3PL fees. 

You’ll need to manage this warehouse yourself, or hire a team staff to manage it. You should still be able to outsource couriers to ship items, but may need to consider hiring an additional staff member to take care of managing delivery drivers if you’re shipping lots of different items per day.

FAQs for Online Stockkeeping: Where Should Your Ecommerce Business Keep It

When is storing inventory at home a good idea?

Storing stock at home works best when you are just starting out, have a small product line, or sell items that do not take up much room. It is the most budget-friendly option, but you must have a dedicated area to avoid cluttering your living space.

What should I look for in a self-storage unit for my products?

You should prioritise a unit that is climate-controlled to protect your goods from damage. Also, check for strong security features like cameras and controlled access, ensure you can get to your items whenever needed, and confirm it fits your budget.

What is a 3PL provider and who should use one?

A 3PL, or third-party logistics provider, is a company that manages your warehousing, order fulfilment, and shipping for you. This service is ideal for growing businesses that want to outsource logistics to focus on other important tasks like marketing and customer service.

Is renting a whole warehouse only for huge companies?

Typically, renting a dedicated warehouse is a solution for larger, established companies with a very large inventory. It becomes a financially sound choice when the volume of stock makes third-party logistics fees more expensive than managing your own space.

Can I use a combination of these storage methods?

Yes, absolutely. A hybrid approach can be very effective. For example, you might keep your best-selling items in a local, easily accessible storage unit for quick shipping, while using a more affordable, distant warehouse for long-term storage of slower-moving stock.