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2 Pros and Cons of Warehouse Expansion By now you have a good idea of why you might want to invest in more warehouse space. Let’s evaluate some possible outcomes. Potential benefits •Ability to meet rising customer demand and expectations •Capacity to scale your business for an influx of orders or seasonal rushes •Lower shipping costs •Improved efficiencies and greater productivity across the board •More convenient location for vendors, logistics, staff •Competitive advantage for multi-channel endeavors •Freedom to add new product lines •Opportunities for reimagining tech infrastructure and workflow •Equity growth and appreciation in property you own •Potential to tie costs to volume and avoid large up front investments if partnering with a 3PL Potential risks •Increased labor, material, and operational costs •Large upfront capital investment unless choosing to expand through a 3PL relationship •Cost overruns and scheduling delays in construction •Lengthy process to build a new facility from scratch •Or, if buying or leasing existing warehouse real estate, lack of availability in key geographies and high purchase/rental costs •Mistakes due to lack of project management expertise •Unknowns of new location, labor force, logistics requirements Comparing the pros and cons above will give you a good gut feeling about the feasibility of adding warehouse space. Now follow up with quantitative analysis. You can easily run the numbers to predict your anticipated break-even point. Here’s how… Time to Expand Your Ecommerce Warehouse? A Guide from Extensiv 6

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