Warehouses in Thailand – What you need to know.

Warehouses in Thailand – What you need to know.

Whether you are a new business owner looking to expand, or you are long-established and simply need to upgrade, having a warehouse comes with a great number of benefits. As someone who is unfamiliar with warehouses or is perhaps looking at them for the first time, then you’ll need to plan your approach with careful consideration.

In this article, we’re going to take you through everything you need to know, from what a warehouse is and how they function, the various types of warehouses available, which businesses can benefit from having one, and much, much more.

What is a Warehouse?

So, what is a warehouse? Well, a warehouse is quite simply a building that is used to store goods. It is a large storage facility typically used by importers, exporters, manufacturers, wholesalers, customs, and transport businesses (to name a few). They are large, open plan building that can typically be found in industrial parks on the outskirts of cities and towns.

But a warehouse is more than just a place to store your goods. It can also serve as a central distribution hub and the first (or early) step in your supply chain.

What is the importance of warehouse?

The importance of a warehouse is gargantuan, particularly to businesses that are intended to expand their operations and experience significant growth in the coming future. Having a warehouse can help you store and shift much larger amounts of stock, reaching a wider audience and driving revenue through the roof.

When your business reaches such a size where a warehouse is finally in consideration, it is a very important step in the right direction. It signifies growth and success and can be an incredibly exciting time for any business owner.

Of course, as important as it is having a warehouse, the thing of greatest importance is securing the right warehouse…

Warehouse classification – Types of Warehouses

Of course, when you are looking into buying or renting a warehouse in Thailand, you need to know the type of warehouse that you are going to need.

What’s that? You assumed a warehouse was just a big empty building with lots of shelves for stacking? Well, you weren’t far off! That is essentially what a warehouse is when stripped down to its core, but there are various types and classifications, each designed for a specific function…

Types of warehouses classified by physical attributes

Warehouses can be classified in a number of different ways. Let’s break them down for you:

Warehouse type classified by Atmospheric Protection:

  • Covered Warehouse: A warehouse that is covered with brick, metal, wood, or canvass panels. A covered warehouse offers complete protection to the goods stored from the outside elements and changes in weather.
  • Open or Outdoor Stores: These are warehouse types that are delimited by fences and markings, which do not have a complete or physical building for storage. These are designed for products that do not deteriorate with atmospheric effects and can be stored outside (such as a new vehicle).

Warehouse Type classified by Materials Stored:

  • Finished Goods: These types of warehouses are reserved exclusively for finished products and are designed to keep the turnover as high-as possible, churning out finished goods.
  • Auxiliary Goods (Procurement Logistics Warehouses): These types of warehouses are designed and dedicated to storing materials that are used for the production of certain goods.
  • Manufacturing Logistics Warehouses: These types of warehouse are designed for products that are at the intermediate stage of production (partially completed).
  • Spare Parts: This type of warehouse is used to store spare parts and is designed more as a maintenance supply unit.

Warehouse type classified by Function and Distribution Logistics:

  • Central Warehouse: A central warehouse is a type of classification for warehouses that are located as close to the manufacturing centre as possible (in order to reduce costs for handling and transportation, etc.)
  • Regional Warehouse: These types of warehouse should be as close to the centre of consumption as possible. So for example, if you are a wholesaler and distribute merchandise to businesses throughout Bangkok, you’ll need to be as close to said distribution centre as possible.
  • Warehouse Platform: Warehouse platforms are similar to regional warehouses, but on a smaller scale. They are typically focused on minimising stocks and increasing customer satisfaction through cross-docking, tense flow, and shock stocks.
  • Temporary Warehouse: As the name suggests, a temporary warehouse is designed to be used for certain times of the year. For example, during an event or season peak where demand is high and the need to supply with overstock is necessary.

Types of warehouses classified by business

  • 3PL (Third-Party Logistics) Warehouse: This is a classification of warehouse that serves logistics companies. Those who are delivering packages on your behalf, will have a warehouse (or several in fact) where products can be stored temporarily in transit.
  • Trading Companies Warehouse: This is where goods that are ready for sale are stored. Any business with a retail or e-Commerce aspect to their business can benefit from this, particularly when product storage in their retail space becomes limited and overflow is an issue.

Bear in mind, that pretty much any business can benefit from having a warehouse. Of course, a Law Firm certainly isn’t going to need the storage, nor will a third-party customer services provider. However, any business with retail products, or some form of e-Commerce aspect to their business is going to—at some point or another—need to utilise some warehouse space. Any companies looking to cater to special requirements outside of the types you see above, may consider a fully custom warehouse for rent as a solution.

What are the benefits of warehouses?

So, what are the benefits of having a warehouse? Well, first of all, it’s not just the benefit of having the warehouse itself, but the additional services that are offered by warehouse supply companies. Let’s take a look:

1 – Production Support

Having consistent production support is something that can significantly reduce your production lead times. In addition to that, having a managed warehouse allows you to leverage transport logistics expertise.

2 – Opportunity for Expansion

And then we have the opportunity for growth and expansion. But not being restricted with the need to store all of your materials, components, and the finished products stored in your manufacturing facility, you will be able to focus more of your efforts on the core of your business, absent unnecessary clutter or distraction. Better use the space that you have for what it what intended for, and utilise warehouse space to facilitate growth.

3 – Smoother Packaging and Processing

The best warehousing and distribution centres are not just about keeping your goods and products in storage. In fact, the best warehouses will provide picking, packing, and shipping services, including inventory management where necessary.

4 – Price Stability

Having warehousing also ensures that you have a consistent supply of goods ready to go into the marketplace, by being able to store goods when supply exceeds the demand (and conversely releasing them when demand exceeds production).

By maintaining consistent stock levels, you can help keep your prices stable and thus make it easier for you to forecast your production, profit, and potential losses.

5 – Spot Stocking

Spot stocking is a huge benefit for those who product seasons products. This is a type of technique that is certainly the most favoured by agricultural businesses; rather than using a warehouse facility all year round, you can simply use a number of warehouses at the same time, over a range of different locations which are close to key market areas, thus reducing transport time and having the ability to meet customer demands.

6 – Minimise Your Risks

Any goods that are kept in a warehouse are insured at the risk of the warehouse owner. Keeping your goods stored at an off-site warehouse will minimise the risk of inventory loss, damage, theft, and fire; thus transferring the risk to the owner of the warehouse and the insurance company.

If you keep all of your goods stored onsite in your store, the risk is all on you. When you keep your goods stored in an off-site warehouse facility, you are reducing the risk significantly.

The Bottom Line

All in all, you can’t beat a good warehouse when it comes to expanding your business. De-clutter your shop and premises and start storing your goods off-site. Take advantage of the multitude of benefits that come with warehousing, including the logistics side of things.

In any case, if you are interested in exploring our services further, please do not hesitate to contact us. We have a wide range of warehouses available in strategic locations all over Thailand to help propel your business forwards.