Warehouse Space vs. Industrial Space

Warehouse space for rent and Industrial space for rent

Warehouse Space and Industrial Space is one thing that we see folks commonly conflating. I’m guilty of it too, but there is a difference. That difference lies in how the space will be used and, generally speaking, the level of occupancy on behalf of the tenant.

Warehouse space is best thought of as storage. But that’s a bit too simplistic. Anyone who has ever managed a warehouse knows there’s a lot more to it than piling boxes on top of one another. Warehousing efficiently requires deft utilization of people, software, and machinery to run smoothly and with little error.

Skilled warehousing managers are perhaps best thought of as the first 100 yards of a logistics network. This goes double for third-party logistics (3PL) companies and on-demand warehousers whose livelihood depends on the accuracy and precision in this first 100 yards on behalf of their clients..

Industrial space couldn’t be farther from warehousing, even though the terms are used interchangeably. Industrial space may take the form of a warehouse, but it may not. Industrial space is a place where a business can manufacture, fabricate, assemble, have employees, conduct meetings, so on and so forth.

Here’s the nectar of my point – industrial space is property that a business occupies all to themselves and operate out of. So, a combo of office and warehouse space. Warehouse space, on the other hand is best thought of as storage as a service.

Gif Source

Why does it matter?

Well, the lack of distinction between the two represents a challenge to marketers of industrial spaces and on-demand warehousing as a service. I’m in charge of growing our Orange County, California based commercial real estate startup called Digsy and this is a common discussion point in our marketing messaging.

The thing is that using the word “warehouse” in our ads puts us in competition for search engine ad placement with Public Storage and the like. The net result is that we end up paying for clicks for customers that don’t need our service. Our service is helping businesses find industrial space that they’ll occupy for two years or more, not on-demand warehousing or run-of-the mill storage.

I’m not trying to change people’s behavior when using search engines. That’s not my point at all. The fact of the matter is that enough people click on our ads for warehouse space – while actually needing industrial space – that it still make sense for us to bid on warehouse space search phrases. Furthermore, warehousing is actually part of what our clients need the industrial space for anyway.

Here’s my point. The distinction between warehouse space and industrial space can actually save businesses a bundle. Using flexible term warehousing as a service, like Flexe for instance, is less expensive, and well… more flexible than 2-year-plus commitments for industrial space. I’ve analyzed the prices of Flexe versus Industrial space in some of the largest US markets, and for businesses that need both warehousing as well as industrial space to operate in, a considerable amount can be saved on operating expenses by using both.

Keep an eye out for that post in an upcoming post called Hybrid On-Demand Warehousing and Industrial Space Solutions.