The Warehouse as a Service: New Business Model


The Warehouse as a Servicemodelis a relatively new, but fast-growing phenomenon. Partly driven by the scarcity of space for ecommerce fulfillment,and partly driven by skyrocketing customer demand, this new model isexpanding.

What is Warehouse as a Service (WaaS)?

Warehouse as a Service is amodelfor outsourcing some or all logistics functions, such as storage, stock management, fulfillment, shipping and tracking. Often shortened to “3PL” or “TPL” for “third party logistics, Warehouse as aService is seeing rapid growth that is over 15% faster than the growth of ecommerce overall.

As warehouses transformed from physical infrastructure and aplace to store goods and evolved into order fulfillment centers, the opportunity for Warehouse as aService emerged. Typical Warehouse as a Service offerings include:

  • Managing inventory
  • Pick, pack and meter
  • International and domestic shipping
  • Local courier service
  • Tracking and reporting
  • Service centers with dedicated help staff

Benefits of Warehouse asa Service

Companies that provide these specializedlogisticsservices have worked out all the kinksand costs. Most have invested in the latest equipment and software. With volume, they cannegotiateideal terms with carriers, including UPS, FedEx, and the US Postal Service, and discounts for packaging and printing.

Besides efficiency and cost effectiveness, Warehouse as a Service providers offer customers flexible scalability. Warehouse space is scarce, and expanding capacity takes time and money. With a Warehouse as a Service provider, scaling up is easy. Just as important for some businesses is the ability to scale down. A seasonal business does not need to carry excess warehouse capacity all year. It can add during the high season, then contract back down when things are slower.The inefficiencies of over-utilization and under-utilization are being driven out of the market.

Many companies do nothave the capital to establish a state-of-the-art warehouse system, especially if their business serves customers nationally or internationally.Warehouse as a Service gives them near instant ability to compete like a well-funded global giant by tapping into an established network of facilities.

The last benefit is human capital. Warehouse as a Service companies are run by well-trained and experienced staff who enjoy solid pay and benefits—with lower turnover.

More than Just Space on Demand

Flexible warehouse space has been around for decades, but what makes the Warehouse as a Service model so compelling today is its affordable comprehensiveness. These companies offer technology and operational innovations that are costly and complex to install. Add the scarcity and expense of finding

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