Cheap Racking – Think before you buy it
Many people say they want to buy cheap racking but what do they really mean?
Basically racking is a necessary evil. First of all, nobody wants to stock any product at all. So in the ideal world, nobody would need racking at all. But in the real world most companies have to hold stock. Moreover, in order to be efficient they need to have some form of racking or shelving to store the stock on.
So the cry is that they want cheap racking. But cheap racking is not what people really want. What they actually need is value for money and I will give you an example with regards to cheap racking:
We had a customer who had a warehouse with an area to be racking of approximately 23.5m x 13m. His pallets were an unusual size and were 1050mm x 1050mm thus needing a beam of 2325mm to provide the necessary clearances. This worked out quite well giving 10 bays in the length with a run down each wall and a double in the middle. Unfortunately, we could not do this in second hand racking so we had to quote new racking (mind that the new racking we quoted was very cheap). We managed to accommodate 320 pallets within the space at a cost of £8000.
The customer was however offered some cheap racking which he dully installed. The cost was about half the price that we had quoted. However, the beams were 2700mm long and thus he could only accommodate 256 pallets. But on the face of it, his cheap racking had saved him money. What he did not consider was the cost of storing those pallets. His warehouse cost him about £6 per sq ft rent and rates a total annual cost of approximately £23,500. I pointed out to him that his cheap racking had cost him money although he struggled to understand this concept until I put it onto paper.
He could have leased the racking over 5 years at a typical cost of about £2000 pa. By adding this to the rent this gives an annual cost of £25,500 or just under £80 per pallet position. The cheap racking option on the same basis cost only £1000 to lease so a cost of £24,500 pa or over £95 per annum.
So, the cheap racking was actually costing him 20% more.
The key to getting cheap racking is to plan your warehouse space well !