How to Choose the Right Warehouse Size for Your Business

Investing in a warehouse is a major milestone for any business. Whether you’re taking back your living room that’s currently filled to the brim with boxes, or admitting defeat to the mice after a long battle for your storage unit, finding the right warehouse size is a critical next step for growth. 

And it’s not a step to take lightly. Finding the right warehouse space is a bit of a ‘goldilocks’ situation. It can’t be too big or too small, it needs to be just right. 

Here’s everything you should consider when determining what size warehouse your operation needs. 

What Does Warehouse Capacity Really Mean?

Warehouse capacity is the total space available for storing your products and materials. It’s not just the room you have on the floor. It includes the horizontal and vertical space (within any regulatory limits for your industry, of course). 

Your total capacity doesn’t include areas you’ll use for things like receiving, packing, and shipping. You also won’t include areas like work spaces, break rooms, or aisles when calculating usable storage space. 

By understanding warehouse capacity, you can avoid overpaying for space you can’t use.

What is the average warehouse size?

In the United States the average warehouse is 17,000 square feet. Yet, warehouses vary drastically depending on industry, product type, and location. 

For example, a sticker manufacturer might only need a few hundred feet to operate. But a furniture brand may need thousands of feet to fit all their products. While corporations like Amazon and Walmart may have megawarehouses exceeding 500,000 square feet, those are often the exception and not the rule. 

Warehouse Spaces That Are Too Large

Bigger is not always better when it comes to warehousing. A space that’s too large can drain your resources since every extra square foot of space increases your rent, utility costs, and maintenance fees. 

Think of a warehouse that’s too big as a bucket with holes in it and water as your income. You’re constantly losing money until you’re able to address the holes. 

Warehouse Spaces That Are Too Small

Too little warehouse space can be an equally wasteful scenario. Warehouses that are too small can lead to clutter, which can cause products to be damaged or go missing. Without the space to operate, a small warehouse can hinder your ability to fulfill orders efficiently. 

It can even hurt your team morale when people are forced to work in too close of proximity or if they often struggle to find the items they need. 

Finding a Warehouse Space That’s Just Right

The sweet spot when it comes to renting a warehouse is finding a place that fits your current needs while allowing for smart, manageable growth–without breaking the bank. Below are some key considerations to help you pick the perfect sized warehouse for your organization. 

Inventory Volume and Product Size

The size of each of your items and the total number of items you store is the foundation of your warehouse planning. 

First, take accurate measurements of your products’ dimensions, including: length, width, height, and weight. Knowing these dimensions can help you assess their stackability. Next, think through how you’ll stack them, like on wracks or pallets. Then determine the amount of vertical space you need to fit all the items.  

This will help determine your storage and handling requirements for your business at the moment. 

Business Growth Projections

The warehouse that’s ‘just the right size’ for your business today should also be the right size for your business months down the road. This is where your business growth projections come into play. 

Ask yourself the following questions:

• Are you seeing steady growth?
• Do you expect seasonal spikes in inventory or orders?
• Do you have major events coming up where you’ll need more products?
• Do your customers place large orders that require exponential space? 

If you answered yes to any of these questions, secure a space that allows you to grow your business without disruptions. Moving a warehouse can cause unnecessary downtime and spending. 

Leave some wiggle room to expand your current operations in your warehouse rental.

Operation and Staffing

If you have, or plan to hire a full-time employee or part-time employee, your warehouse won’t just be a space to store your items. It will also be a space to get your team together. 

The less people you have, the less room you’ll need for unloading, putting things away, staging, assembling, and packing. That said, your team should always be able to move efficiently and safely through daily operations in your warehouse. 

Location and Delivery Requirements

The ideal warehouse location is always close to your customers. However, a global market means businesses can’t be close to everyone. Instead, it’s advantageous to be close to major distribution routes, like highways, airports, or seaports to reduce delivery times and shipping costs. 

Advantageous locations is why we decided to open co-warehouses in Atlanta, Dallas, and Denver. 

If your business is hyper-local, staying near your target market can ensure a faster delivery and a better customer experience. 

Amenities and Additional Space

A warehouse can be so much more than a storage space. Look for warehouses that include private offices, break rooms, conference spaces, or kitchens. You may also benefit from loading docks, racking systems, and moving equipment. This can help you avoid purchasing these expensive items up front. 

These amenities can significantly improve daily operations and employee satisfaction.

Don’t Forget the Hidden Costs

When calculating the right warehouse size, it’s also important to understand the full cost of renting a warehouse. Beyond rent, you may need to pay for:

• Utilities (electricity, water, internet)
• Facility maintenance
• Equipment and storage solutions
• Security and insurance
• Cleaning services

These additional expenses add up, so make sure they’re considered in your budget.

Still not sure what size warehouse you need?

Choosing the right warehouse size is about more than square footage. It’s about creating a space that supports your products, your people, and your plans for the future. A perfect-sized warehouse helps you ship faster, store smarter, and operate more efficiently

Polygon specializes in helping small business owners find warehouse solutions that scale. If you’re still wondering how to choose the right warehouse size, our team is here to help. Whether you’re just getting started or leveling up, we can help you evaluate your inventory, team, and growth potential. 

Get in touch with a Polygon manager today and let’s talk about what your business really needs—from square footage to support systems.

Want to do more reading before you rent a space? Check out our blog on 7 Things to Avoid When Renting a Warehouse.