Buying a commercial property is one step towards helping your company realize its business goals, whether that goal is getting off to a good start or expanding for future business prospects. For most companies, that means acquiring a new commercial site for storage, manufacturing or a combination of the two. Factories and warehouses serve these purposes well, but there’s often confusion between the two, leading many to make poor decisions that reflect negatively on their business’s future prospects.

Major Differences

Most people use the words “factory” and “warehouse” as one and the same, when the two are far different in both function and design. Both factories and warehouses have their own unique functions and these functions often complement one another in a vertically integrated manner:

Factories are industrial sites made up of buildings and machinery used for manufacturing goods and processing materials. These sites are often located in industrial areas near major roadways and rail lines with optimized transportation of goods in mind. Many factories incorporate warehouses on-site to house finished goods, raw materials or assembly equipment needed for manufacturing.

Warehouses are commercial buildings prioritized for storing raw materials and manufactured goods. Like factories, warehouses are usually located in industrial areas near major rail and road routes. Warehouses are capable of storing a variety of goods, from finished products to spare parts, packing materials and equipment required for product assembly.

Other Considerations

Most companies tend to hire out the storage of inventory, materials and other assets to storage companies with their own warehouses. Companies benefit from having only fixed or variable monthly costs to worry about, as opposed to additional employee salaries and maintenance costs. Companies interested in purchasing existing factory sites often outsource warehousing functions to third-party commercial and industrial storage facilities.

While many warehouses are located away from the site of production, it’s not uncommon to find a warehouse attached to a factory. One benefit of an on-site warehouse is the centralization of production, storage and shipping functions, potentially eliminating waste and improving efficiency. Finished goods can easily go from the factory floor to warehousing shelf in a shorter amount of time. Raw materials are also more readily available from on-site storage facilities, promoting shorter production times.

Seeking the advice of a commercial real estate agent is a must when it comes to factory and warehouse purchases. An experienced agent can help your company locate the best candidates based on its purchasing criteria, from total building area to road access and floor planning.

Best Regards,
Serene Chua : (+ 65)98-199-199
B.Sc(NUS)Hons / CEHA-Certified
Email : topserene@yahoo.com.sg