Warehouse Location and Infrastructure

Choosing the right warehouse location and suitable infrastructure determines whether an in-house warehouse can be operated profitably or whether delivery times, costs, and error rates slow growth. For online retailers, location is not an isolated real estate project but a central lever in fulfillment – it connects supplier access, last-mile costs, workforce availability, and scalability in one system.

Anyone planning an in-house warehouse must consider location, building, and technical equipment as a complete package. A low rent per square meter is of little use if carrier access is poor or ceiling height does not allow high-bay storage. Conversely, a premium location only justifies higher fixed costs if it measurably enables shorter delivery times and lower shipping costs per parcel.

Why Location and Infrastructure Belong Together

Location and infrastructure are two sides of the same coin. Location determines accessibility, delivery times, and operating costs. Infrastructure – from power supply and floor load capacity to the WMS – determines how efficiently work can be performed at that location.

The Three Levels of Site Selection

1. Macro location: Region, metropolitan area, proximity to customer clusters and suppliers
2. Micro location: Industrial zone, motorway access and carrier depots, labor market
3. Building level: Hall height, ramps, loading bays, expansion potential

A typical mistake: retailers first choose an inexpensive building and only later check whether the infrastructure suits their product range. For bulky goods, hazardous materials, or temperature-controlled products, this leads to expensive retrofits or even a relocation.

Site Selection Criteria at a Glance

Site selection always follows the tension between Kundennähe, supplier proximity, and costs. For pure B2C fulfillment, proximity to the customer base usually dominates; for import-driven models, access to ports and customs locations moves to the forefront.

Location Types Compared

Proximity to Customers vs. Proximity to Suppliers

For German e-commerce, a Central Warehouse Position in central Germany or the Rhine-Main area is often in the sweet spot: from there, large parts of the country can be supplied within one to two days. If most customers are in southern Germany, a location in Bavaria may make more sense – even if suppliers from northern Germany have longer travel distances.

Practical example: A fashion retailer with 80 percent of customers in North Rhine-Westphalia relocated its warehouse from Hamburg to Dortmund. Rent increased by 12 percent, average delivery time dropped from 2.4 to 1.6 days, and the return rate fell slightly due to faster delivery. The higher rent costs paid off through lower carrier surcharges and a higher repeat purchase rate.

Infrastructure: What a Warehouse Really Needs

Infrastructure means everything beyond four walls: technical building equipment, warehouse layout, IT systems, and logistics facilities.

Building and Structural Requirements

• Ceiling height: At least 6 meters for simple shelving, 10–12 meters for high-bay storage
• Floor load capacity: Sufficient for racks, pallet trucks, and full pallets if needed (often 5 tons/m² and more)
• Ramps and doors: Separate zones for inbound goods and shipping reduce congestion
• Loading bays: Sufficient parking spaces for trucks and freight carriers
• Power and network: Adequate connections for scanners, packing stations, label printers

Technical Infrastructure in the Warehouse

1. WMS (Warehouse Management System): Controls put-away, picking, and inventory management
2. Barcode scanners and label printers: Foundation for error-free order picking
3. Wi-Fi and wired networks: Stable coverage in all warehouse zones
4. Packing tables with power and data connections: For scales, printers, and monitors
5. Security systems: Video surveillance, access control, fire protection

Warehouse Layout and Zoning

A well-designed layout clearly separates inbound goods, storage, picking, packing, and shipping. The flow ideally follows a single line without backward movements – this reduces travel time and collisions.

Returns are ideally routed from shipping back to the inspection zone – separate from the main flow, but without detours.

Cost Factors: Location and Infrastructure Compared

The total costs of an in-house warehouse consist of rent, ancillary costs, investments in racks and technology, and ongoing operating costs. A realistic calculation compares at least three location options over a period of three to five years.

Checklist: Evaluating Location and Infrastructure

Before signing a lease, all relevant points should be systematically reviewed:

Location Checklist

• Accessibility for main carriers (DHL, DPD, GLS, Hermes) verified
• Average delivery time to top-3 customer cluster calculated
• Travel time for most important suppliers determined
• Labor market and public transport access for shift operations assessed
• Lease reviewed for expansion options and notice periods
• Zoning plan and warehouse use confirmed

Infrastructure Checklist

• Ceiling height and floor load capacity sufficient for planned racking system
• Number and width of ramps/doors sized for expected volume
• Power supply sufficient for peak operations (holiday season)
• Network/Wi-Fi plan for all warehouse zones in place
• Fire protection and occupational safety meet requirements
• WMS integration with shop and shipping software technically clarified

Scaling and Future-Proofing

A warehouse location must not only meet today's needs but enable growth. Plan reserve space from the start for additional rack rows, more packing stations, and a separate returns area.

When a Relocation Makes Sense

1. Space is 85 percent or more utilized – efficiency drops measurably
2. Shipping costs per parcel rise because the location is too far from customer clusters
3. The building can no longer be adapted technically (no high-bay storage, no cooling)
4. The break-even calculation shows that another location is cheaper long term

Site Evaluation in 6 Steps

Integration into the Fulfillment Strategy

Warehouse location and infrastructure are not an end in themselves but part of the overall fulfillment strategy. Those weighing in-house warehousing against outsourcing should include location costs in the break-even analysis and compare them with the services of a fulfillment provider.

For retailers with multi-channel sales, location also plays a role in inventory distribution: a central location simplifies inventory management, while multiple regional micro-warehouses shorten delivery times but increase complexity and fixed costs.

Avoiding Common Mistakes

• Focusing only on rent: A cheap peripheral location can cause expensive last-mile costs
• Underestimating infrastructure: Retrofitting power, network, or ramps is expensive
• Planning layout without process: Racks before pick strategy lead to inefficient routes
• Not planning a returns zone: Returns need their own inbound area and inspection zone
• Ignoring growth: A cramped warehouse during peak season costs revenue and reputation

Frequently Asked Questions

How large should my first warehouse be? Orient yourself to current order volume plus 30–50 percent reserve for growth and peak season. A warehouse that is too large ties up capital; one that is too small creates bottlenecks immediately.

Is an urban location worth it? Only for same-day or express delivery promises and high order volume in the immediate area. Rent costs are significantly higher and scalability is limited.

Do I need high-bay storage? From around 1,500–2,000 m² of warehouse space and limited plot area, the investment pays off. For smaller spaces, block or shelving storage with 6 meters ceiling height is often sufficient.

When is a garage warehouse enough? For start-ups with fewer than 50 orders per day and few SKUs, a garage or basement can work as a transitional solution – but not as a long-term solution when growing.

In-house warehouse or 3PL – which is cheaper? That depends on volume, product range, and process maturity. From around 500–800 orders per week, a break-even analysis is worthwhile; below that, a service provider is often more economical.

Conclusion

Warehouse location and infrastructure form the foundation of every successful in-house warehouse. A sound site decision combines customer proximity, carrier access, and economic viability. Infrastructure – building, layout, technology, and IT – must fit the product range, order volume, and planned pick strategies from day one.

Those who plan both systematically create the basis for fast delivery times, controlled costs, and scalable growth. Those who only look at the cheapest square meter often pay twice later – through inefficient processes, higher shipping costs, or an early relocation.

Related Topics

• Decision: In-House Warehouse or Service Provider
• Break-Even Analysis for In-House Warehousing
• WMS – Warehouse Management System
• Storage Location and Storage Zone
• Customer Expectations and Delivery Times

Last updated: July 6, 2026