Neatly organized warehouse storage shelves with orange and silver steel shelves.

Storage Warehouse: How to Reduce Costs and Increase Productivity

Storage warehouses are essential to any supply chain. The right storage techniques can optimize warehouse space, maximize product organization and streamline operations.

However, many businesses lose money through slow warehouse processes. Misplaced inventory, theft, and stock damage can all wreak havoc on warehouse costs. Here are some ways to reduce those expenses:

Feature Image by Tiger Lily

Optimize Storage Space

Most storage warehouses for rent have much wasted space. Such wasted space is due to empty aisles, open areas above products on shelving, and other factors. These spaces can be used to improve warehouse storage capacity.

Start by calculating the square footage of your warehouse. Subtract out office space and restrooms. Then divide by your warehouse clear height (the distance from the floor to any overhead object).


This number will give you a better idea of how much space is utilized. However, this metric does not accurately measure your warehouse’s capacity. For accuracy, calculations must account for the space needed to move items in and out of storage.

To maximize your warehouse space utilization, consider installing a mezzanine level to double your storage space without expanding the building. Also, a high-density storage system to store more items in the same footprint improves the utilization of space. Vertical carousels or lift modules accomplish this goal. Such storage systems can eliminate many rows of racking and reduce the need for wide aisles. Altogether, these strategies free up additional space for other uses.

Invest in Storage WarehouseTechnology

Save significant costs by investing in technology that automates warehouse processes. This reduces labor costs and the need to keep a large workforce on hand to handle manual operations. This also minimizes the time required for inventory tracking and management, reducing the risk of theft or misplacement.

Having the right storage equipment can also lower operational costs by decreasing the need for employees to move products. Choose a rack build that optimizes space dimensions to reduce the amount of aisle space needed. Additionally, consider storing frequently used items closer to the dock. An efficient warehouse storage system keeps rarely-shipped products farther back. In doing so, employees must take fewer steps throughout the day.

Young, white man in baseball cap and yellow vest operating a forklift in a warehouse
Photo by ELEVATE

Another way to lower warehouse costs is by reducing energy usage. Use natural lighting in your facility to lower electricity bills. You may also opt for motion-sensitive light controls to decrease the energy used to keep empty rooms lit.

Reduce Waste

A well-stocked and organized warehouse for rent in Los Angeles can save time, money, and energy. Consider storage warehouse slotting. Slotting is a method of arranging items to maximize storage efficiency. This method ensures that your most popular products are positioned in an optimal location for efficient picking, shipping, and return processing. Less popular items can be stored out of the way in less-used areas.

Eliminate unnecessary steps in your workflow by putting frequently shipped items closer to the dock and rarely-shipped merchandise farther away. This reduces the number of steps employees must take, and the time wasted in transit.

Well-insulated warehouses lower heating and cooling costs. Additionally, insulation maintains the working environment for employees at comfortable temperatures. Keeping workstations neat and organized also helps reduce worker fatigue, which can lead to a productivity drop. Lastly, invest in high-quality tools and keep them properly labeled at each workstation. This enables workers to pick the right tool when needed.

Invest in Storage Automation

Labor costs consume a significant portion of every warehouse’s operating budget. Unstable work conditions and insufficient management systems lead to constant stress, errors, and high turnover, increasing staffing costs. Finding and recruiting workers to meet seasonal demands also requires more work. Warehouse automation technologies eliminate these problems and reduce overhead by reducing employees’ time on non-value-added tasks.


The right warehouse automation system will depend on your operation. Those with minimal processing procedures such as distribution centers, wholesalers, and retail are the best candidates for automation solutions like conveyors or automated storage and retrieval systems (ASKS) that utilize smaller warehouse aisles and taller racks to improve cubic space utilization.

Larger retailers with deep pockets will likely opt for more advanced technology-intensive setups, ranging from individual picking robots to fully automated warehouse systems that manage the entire supply chain. Either way, the initial investment pays off quickly as client satisfaction rises and customer repeats business increases.