In today’s tight industrial real estate market, every square metre counts. With warehouse vacancy rates in Australia sitting at historically low levels (around 2.5% in late 2024), businesses are feeling the pressure to make the most of their available storage space and keep costs under control.
Whether you manage a large distribution centre or a smaller storage facility, here are five proven ways to reduce your storage costs without compromising on operations.
1. Review and Resell Dead Stock
Excess and obsolete inventory is one of the biggest drivers of unnecessary storage costs. Every pallet of unsold or outdated product takes up valuable space, space that could be used for fast-moving, revenue-generating items.
Selling dead stock through industrial marketplaces like Industrial Clearance (IC) not only frees up space, but also recovers some of the capital tied up in that stock. Plus, reselling helps keep materials in use and out of landfill, contributing to a more sustainable supply chain.
2. Optimise Your Warehouse Layout
An inefficient warehouse layout can make you feel like you’re out of space when you’re not. Review aisle widths, racking configurations, and storage zones.
- Use vertical space with taller racking systems
- Group fast-moving items near dispatch areas to speed up handling
- Reconfigure shelving to fit product dimensions more closely
3. Improve Inventory Accuracy
Carrying more stock than you need leads directly to higher storage costs. Investing in inventory management technology from barcode scanning to real-time stock tracking can help you maintain leaner, more accurate inventory levels.
By reducing overstocking, you’ll naturally reduce the storage space required.
4. Consolidate and Rationalise SKUs
Every additional SKU (stock-keeping unit) comes with handling and storage overheads. Review your product range to identify low-selling or duplicated SKUs. Phasing out or consolidating slow movers reduces the storage footprint and simplifies inventory management.Â
5. Consider Alternative StorageÂ
If you have seasonal demand peaks, long-term storage of certain items may not be the most cost-effective choice. Explore:
- On-demand warehousing (pay only for space when you need it)
- Third-party logistics providers with scalable storage capacity
- Shared warehouse space with other businesses to spread costs
Final Thoughts
Reducing storage costs isn’t just about spending less, it’s about improving efficiency, freeing up capital, and making space for the stock that actually drives your business forward.
From optimizing layouts to reselling dead stock on platforms like IC, a proactive approach can help you reduce costs, improve operations, and run a more sustainable supply chain.