Your storefront is for one thing: showing products to customers! You want customers to see your available merchandise, and the more store space you have, the more you can show.
As a result, any space used primarily for storage is a waste. This is especially true in the Greater Toronto Area, where any storefront comes at a premium.
Cost of Storage Space versus Shop Space
Storage lockers cost, at most $1 per square foot. Let’s compare that to GTA retail space.
A decent price in the suburbs is $4 per square foot. That’s not too bad. But in a downtown high-traffic area like Yonge Street? We’ve seen prices over $22 a square foot. If you have a good location, using a single square foot to stack boxes effectively costs you hundreds of dollars a year. The potential savings of storing a larger amount of inventory off-site could be in the thousands!
Creating an Off-Site Inventory System
The only challenge in using off-site storage is keeping track of the inventory, and making sure that the inventory is flowing through the storefront.
For the easiest way to keep track of your merchandise, we recommend using an inventory management app! Keeping track of it in Excel or on paper is likely going to leave a lot of room for error as people may forget to log everything they pick up or drop off. An app helps all your partners and employees log changes on their phones as they make them.
Another challenge is in predicting sales. Check your sales reports and try to estimate how much stock you need to move from your storage unit in advance. If you estimate this too high, then you will end up cluttering your shop and defeating the purpose.
Choosing the Right Facility
The most important thing to look for in shop storage is security. Your merchandise is valuable and can be targeted.
Choose an indoor storage facility with cameras, electronic locks, and when possible security guards.
Insuring your Unit
Even the best facility can sometimes be damaged by fire or leaks. Be sure to take out insurance on your storage unit to cover any losses you might have. Many brokers offer a commercial goods policy that takes into account shifting inventory by setting a maximum threshold for your claim.