5 ms·

If you are an American and shop at Costco, the toiletpaper section has been practically overfilled for the past six months. People simultaneously overestimate a

If you are an American and shop at Costco, the toiletpaper section has been practically overfilled for the past six months. People simultaneously overestimate and underestimate just how much time it takes to ramp up and ramp down production.

Wowfunhappy 5y ago
Am I greatly underestimating how much it costs to just store excess inventory in a damn warehouse?
- ouid 5y ago
  Probably, yes. A warehouse is basically just a costco that you aren't willing to sell things out of. Why wouldn't you just make a new location?
  - Wowfunhappy 5y ago
    Because you could put the warehouse in the middle of nowhere, hire a fraction as many employees, and leave everything in shipping containers.
    - jterrys 5y ago
      But there's cost of shipping and maintenance of the warehouse, alongside with the product loss/tampering. None of these are revenue generating.
      - netizen-936824 5y ago
        My assumption is that there are people out there who do the calculations of storing and shipping (with internal or external logistics) vs lean/JIT But those calculations may have some assumptions about service and manufacturing availability However I'm not one of those people, I'm guessing someone else knows better than me
    - NoOneNew 5y ago
      "Put the warehouse in the middle of nowhere..." Dude... you play way too many video games. The cost of building a warehouse, lead time and logistics is not like in Simcity. Best case, you'll have a large dockable warehouse in 12 months after purchase IF the bureaucracy is smooth. Which it wont be. Mobilizing a crew is its own nightmare when it's "middle of nowhere". Where do you house a hundred rotating contractors within a 20 min travel time if it's in the middle of nowhere that doesnt have the population infrastructure for that influx? Trucking in materials is it's own issue. Along with equipment. Oh and when the rest of the industry is doing the same thing... wait list or you get the bargain bin contractors... which... yea... not worth it. That and Conexes "rot". They're not long term solutions in a lot of environments. There's a lot of reasons why it ain't that easy as you think. I hate the smell of white collar in the morning.
      - gruez 5y ago
        >I hate the smell of white collar in the morning. More like "armchair urban planner/real estate developer". While I'm sure that most "white collar" workers don't know how long these steps take, I'm sure that some white collar workers in the chain (eg. management/engineers/civil servants) do know. By the same token, while I'm sure some non-white collar workers know how long this takes, I'm sure most non-white collar workers (eg. guy working in retail) don't have any idea either.
- HWR_14 5y ago
  Although warehouses don't have to be located as close to consumers as say, a Costco or amazon fulfillment center, they have to be built. And for the past at least decade long term warehousing wasn't a major business model, better to sell it at a consistent pace. So there wasn't an investment in warehouse space. However between supply chain uncertainty and inflation, the relative cost of warehousing vs discount selling and reordering is lower now than it was before.
- WheelsAtLarge 5y ago
  It makes no sense financially, building, maintaining, running them is expensive. I liken it to my own experience. I sent about 20 boxes of books to be stored because I just could not get my self to get rid of them. I rented a place for $25 a month. It was ok since it would only be a few months. So, 5+ years later, and an increase to $45 per month, I finally decided that I was never going to read them so I threw some out and donated the rest. I never even read a single one in storage and If I really had wanted to I could have bought them multiple times with the money I spent in storage fees. Now imagine millions of items stored without really knowing if anyone will ever buy them. Companies are so opposed to using storage that they are willing to send brand new items to the dump and take a 100% loss rather than to store them.

Wowfunhappy 5y ago

Am I greatly underestimating how much it costs to just store excess inventory in a damn warehouse?

ouid 5y ago
Probably, yes. A warehouse is basically just a costco that you aren't willing to sell things out of. Why wouldn't you just make a new location?
- Wowfunhappy 5y ago
  Because you could put the warehouse in the middle of nowhere, hire a fraction as many employees, and leave everything in shipping containers.
  - jterrys 5y ago
    But there's cost of shipping and maintenance of the warehouse, alongside with the product loss/tampering. None of these are revenue generating.
    - netizen-936824 5y ago
      My assumption is that there are people out there who do the calculations of storing and shipping (with internal or external logistics) vs lean/JIT But those calculations may have some assumptions about service and manufacturing availability However I'm not one of those people, I'm guessing someone else knows better than me
  - NoOneNew 5y ago
    "Put the warehouse in the middle of nowhere..." Dude... you play way too many video games. The cost of building a warehouse, lead time and logistics is not like in Simcity. Best case, you'll have a large dockable warehouse in 12 months after purchase IF the bureaucracy is smooth. Which it wont be. Mobilizing a crew is its own nightmare when it's "middle of nowhere". Where do you house a hundred rotating contractors within a 20 min travel time if it's in the middle of nowhere that doesnt have the population infrastructure for that influx? Trucking in materials is it's own issue. Along with equipment. Oh and when the rest of the industry is doing the same thing... wait list or you get the bargain bin contractors... which... yea... not worth it. That and Conexes "rot". They're not long term solutions in a lot of environments. There's a lot of reasons why it ain't that easy as you think. I hate the smell of white collar in the morning.
    - gruez 5y ago
      >I hate the smell of white collar in the morning. More like "armchair urban planner/real estate developer". While I'm sure that most "white collar" workers don't know how long these steps take, I'm sure that some white collar workers in the chain (eg. management/engineers/civil servants) do know. By the same token, while I'm sure some non-white collar workers know how long this takes, I'm sure most non-white collar workers (eg. guy working in retail) don't have any idea either.
HWR_14 5y ago
Although warehouses don't have to be located as close to consumers as say, a Costco or amazon fulfillment center, they have to be built. And for the past at least decade long term warehousing wasn't a major business model, better to sell it at a consistent pace. So there wasn't an investment in warehouse space. However between supply chain uncertainty and inflation, the relative cost of warehousing vs discount selling and reordering is lower now than it was before.
WheelsAtLarge 5y ago
It makes no sense financially, building, maintaining, running them is expensive. I liken it to my own experience. I sent about 20 boxes of books to be stored because I just could not get my self to get rid of them. I rented a place for $25 a month. It was ok since it would only be a few months. So, 5+ years later, and an increase to $45 per month, I finally decided that I was never going to read them so I threw some out and donated the rest. I never even read a single one in storage and If I really had wanted to I could have bought them multiple times with the money I spent in storage fees. Now imagine millions of items stored without really knowing if anyone will ever buy them. Companies are so opposed to using storage that they are willing to send brand new items to the dump and take a 100% loss rather than to store them.