When it comes to storing your product or inventory there are more than one ways to skin a cat. Some of the terminology and pricing can be confusing to businesses as they look for storage vendors to help them with their needs. Depending on the type of logistics project you have going on there are storage pricing models that work better and some others that may not. Once you understand how storage can be priced you will be in a better position to negotiate and plan with your logistics partner. Here are three of the most common pricing models for logistics and warehouse storage.
1. By the” Hundred Weight” – Often called “CWT”
Storage can be calculated by the weight of the shipment. This calculation charges a certain dollar amount for every 100 pounds of product being stored. This type of storage pricing makes sense when quoting the storage of product that has unknown dimensions at the time or will be put into vaulted storage.
2. By the Square Foot
Storage providers care mostly about one thing when they hold product in their warehouses, how much space does it take up? More specifically, how much floor space does the product take up? The footprint of your storage is an easy way to determine a fair cost. If your items are stackable and can consume less floor space this could be a good option to ask for.
3. By the Pallet / Skid
Many shipments and stored items in the logistics world are palletized onto skids so they can be moved and transported easily. Pricing storage by the pallet or skid is a good way to break down a complex project to a least common denominator, how many pallets or skids will we store at a given time? Skid storage can vary but often it can be less than square footage simply because your product can be moved easily if it is palletized.