How Much Does Warehouse Storage Cost? A Complete Pricing Breakdown.

Do you need a warehouse for your goods but want to understand the costs to better budget?

This article covers everything you need to know, from warehousing costs and how they’re calculated to practical strategies for reducing expenses. Keep reading to get all the details!

Do you need to speak to an expert about the cost of a Warehouse? Contact our team today.

Warehousing Costs Breakdown

Keeping your goods in our warehouse means you rent a space in our facility for your goods, which comes at a cost.

The warehousing cost has different components that contribute to the total expense of storing the goods.

These costs are broadly divided into 5:

1. Storage Infrastructure Costs:

Storage infrastructure costs form the base cost of renting space in a warehouse, covering the physical space and facilities required to store goods efficiently.

These costs vary based on warehouse location, size, and storage requirements.

While in some warehouses, this storage cost is calculated per pallet stored, others calculate it per square meter or cubic meter and some a fixed price for a section of the warehouse.

At SARA, we bill our clients per square meter, and the cost varies for a dedicated warehousing service and a shared warehousing service.

2. Management Costs:

Management costs in warehousing cover the expenses related to overseeing daily operations, ensuring efficiency, and maintaining smooth logistics processes.

It covers safety and health compliance, legal documentation, and management software.

Additionally, it includes other services needed to manage your goods from arrival at the warehouse to final delivery to your customers.

3. Handling Costs:

Handling costs refer to the expenses incurred in moving, loading, unloading, and organising goods within a warehouse.

These costs cover labour, equipment, and operational processes required to efficiently manage inventory.

If you also need the warehouse facility to handle the packaging of your goods, that comes under this part of the warehousing cost.

4. Stock Maintenance Costs:

Stock maintenance costs refer to the expenses involved in keeping inventory in good condition while stored in a warehouse. 

These costs ensure that your products remain undamaged, properly tracked, and ready for distribution at any time.

At SARA, we also insure certain goods stored in the warehouse against fire, theft, and natural disasters, adding to stock maintenance expenses.

5. Order Fulfillment Costs:

Order fulfilment costs refer to the expenses involved in processing and delivering customer orders efficiently. 

These costs cover everything from picking and packing to shipping and returns, ensuring timely and accurate deliveries.

At SARA, we offer holistic shipping and procurement that takes care of all your needs and lets you focus on the major parts of your business.

Key Factors Influencing Warehousing Costs

1. Location:

The location of a warehouse plays a major role in determining its overall cost. 

Warehouses in prime commercial hubs often come with higher rental fees, while those in remote areas may have lower rent.

Proximity to ports, airports, and major highways affects the cost you pay to store your goods.

Aside from the fact that the warehouse location affects the warehousing cost, it can also affect other logistics expenses.

This is why we advise our clients to use warehouses close to their customers' locations to keep transportation and delivery costs down.

SARA warehouse is located at Ajao-Estate,  a popular part of Lagos, very close to major roads, airports, seaports, and commercial hubs.

2. Labor & Operational Costs:

Depending on the capacity of the warehouse, the labour required would vary and so would the wages, benefits, and training cost of warehouse staff.

There are also other expenses related to daily operations, such as utilities, security, and equipment maintenance.

All these costs can affect your warehousing cost. You need to take note of these when selecting a warehouse.

Go for a warehouse with sufficient labour and efficient operations. Though this might cost you a bit, it is better than risking your goods at a low-cost warehouse.

3. Inventory & Storage Methods:

Efficient storage methods in a warehouse maximise space, reduce handling time, and improve overall warehouse efficiency.

Poor inventory management, on the other hand, leads to higher costs due to wasted space, stock damage, and inefficiencies.

How the storage cost is calculated also influences your total cost. Some warehouses calculate per pallet, whereas others calculate based on the amount of space your goods occupy in the warehouse.

At SARA, storage cost is calculated according to the amount of space your goods occupy, except if you are using our dedicated warehousing service where you pay for the whole section in the warehouse.

4. Third-Party Logistics (3PL):

Outsourcing warehousing to a third-party logistics (3PL) provider can significantly impact overall warehousing costs, offering potential savings and operational efficiencies. 

At SARA warehouses, we handle storage, inventory management, order fulfilment, distribution, product sourcing, customs brokerage, freight forwarding and many more.

This allows you to focus on core operations in your business without managing your own warehouse and logistics, which would be more costly.

If you need a cost-effective warehousing solution, then working with a third-party logistics firm like SARA is what you need.

SARA's Warehouse Cost

At SARA, we provide flexible and customisable service to meet the needs of different sizes of business, but here are the costs for the major warehousing offers we have:

1. Dedicated Warehousing:

In this warehousing service, you get a specific section of our warehouse dedicated to your business needs, and we manage your inventories in a dedicated space.

Cost of Dedicated Storage Space: NGN 14,400 per square meter per month, with pallets provided.

2. Shared Warehousing:

Here, you share the warehouse storage space with other businesses and pay only for the space your goods occupy, not for the entire space.

This is great for small businesses.

Costs of Shared Storage Space: NGN 10,000 per square meter per month, with pallets provided.

3. Cold Chain & Temperature Controlled Warehousing:

If you need to store temperature-sensitive goods, like perishable goods, pharmaceuticals, chemicals and so on, then this is for you.

This offer provides you with a storage space designed to maintain the safety, quality, and compliance of your temperature-sensitive products.

Cost of cold storage and air-conditioned dedicated space: NGN 20,000 per square meter per month with a minimum of 3 months' payment. This includes the use of our pallets and racks, though you are welcome to provide your own if preferred.

Strategies to Reduce Warehousing Costs

1. Leverage Third-Party Logistics (3PL):

Outsourcing warehousing operations to a third-party logistics (3PL) provider is one of the most effective ways to reduce warehousing costs while maintaining efficiency and scalability.

By leveraging 3PL services, businesses can minimise fixed costs, optimise inventory management, and improve order fulfilment without the burden of maintaining their own warehouse.

Working with SARA as your 3PL partner means that your business can also leverage the 20+ experience of the team in the shipping, logistics and procurement industry.

Contact us to discuss your needs, and we will provide you with a custom solution for your business.

2. Conduct Regular Performance Audits:

Regular performance audits are essential for identifying inefficiencies, reducing unnecessary expenses, and improving overall warehouse operations. 

By conducting detailed evaluations, you can optimise storage, streamline workflows, and eliminate cost leakages in your operations.

We have experts in the SARA team who can work with you through this process.

3. Optimise Order Fulfillment Processes:

To reduce your warehouse costs, streamline the picking, packing, and shipping operations involved in your supply chain.

• Implement batch picking, zone picking, or wave picking to minimise travel time.
• Leverage barcode scanning to reduce errors and improve speed.
• Use standardised packaging to minimise shipping costs
• Arrange inventory based on demand frequency.

 With all these, you can minimise labour costs, reduce errors, and speed up deliveries.

4. Negotiate Better Warehouse Lease Terms:

Warehouse rental fees make up a significant portion of the warehousing cost, and securing a cost-effective lease can lead to substantial savings for your business.

Contact us today and let's negotiate an agreed price. 

5. Storage Optimisation:

Although the optimisation of third-party warehouse storage isn’t something you can control, you can make it a criterion you use in determining the best warehouse for your business.

Remember that poor storage will lead to a high cost due to wasted space, stock damage, and inefficiencies.

At SARA, we provide efficient warehousing solutions with optimised layouts and flexible storage options to help you reduce costs and improve operational efficiency.

Store Your Goods At SARA Warehouse

Finding the right warehousing solution is crucial for managing costs, improving efficiency, and ensuring smooth logistics operations. 

At SARA, we provide reliable, cost-effective warehousing solutions tailored to your business needs. 

Whether you need dedicated storage, a shared warehouse, or temperature-controlled facilities, our flexible options help you store your goods securely while keeping expenses under control.

Contact us today and let us get your goods to a safe place.