Behind the Roll-Up Doors: 5 Distinct Warehouse Models You Should Know

I’ve spoken to over 100 warehouses in the past 14 months  - Although they all seem similar on the surface, there are distinct differences you should be aware of before making a partnership.

 1. The “OG” Warehouse 🧱

As simple as it gets, this is a 3PL brand who owns their warehouse.

The Founder / CEO is actually working on the premises, and they live and breathe the physical side of the business.

These types will typically be the most reliable when it comes to the basics - pick, pack, and ship.

2.  The “Startup” Warehouse ⚡

This is a newer entrant to the market that does not have the capital and expertise to operate a warehouse themselves.

They approach an OG warehouse and offer a shared space model. For example, they “buy” 10% of the space and are responsible for filling it.

This allows them to learn and share resources with the “parent” 3PL, and focus more of their time on great customer service.

3.  The “Software” 3PL 💻

This is a company that has built some sort of software in logistics.

Since all companies who need logistics software also need logistics, they solve this need as well. It’s 1:1 and makes sense to vertically integrate, but they lack true warehousing expertise.

So, they partner with a network of warehouse logistics partners, and build an additional revenue stream through referrals to the warehouses.

Now, under their brand name, they are able to offer you software and warehouses.

4. The “Franchise” 3PL 🏪

Think McDonalds.

This is a 3PL under a massive parent company.

They share expertise, software, and brand name, but the individual entrepreneur takes on the risk of the individual location's success.

#5 - The “Joint Venture” 3PL 🤝

Similar to a “startup” 3PL, this is a warehouse operator who is established in one region, but wants to satisfy customer needs in other regions.

For example, a warehouse who’s been operating in the UK has clients asking them for USA fulfillment.

They “Joint Venture” with a USA based 3PL to offer the same service but under a different storage space.

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If you're building a DTC brand and want a recommendation on the best warehouse type for you — email me at keyan@ironmargin.com and I’ll send you a reply within 24 hours.