Too often, financial constraints within a company lead to decisions being made solely on the basis of initial purchase price. This narrow focus often overlooks the total cost of ownership, a critical factor that can significantly impact long-term operational efficiency and cost-effectiveness.

A common and costly mistake is opting for second-hand racking systems that compromise on specification. For example, an optimal racking design might feature three pallet bays, storing pallets on the 1000mm face. However, a second-hand alternative might offer only two pallet bays, storing pallets on the 1200mm face. On the surface, this might seem like a smart decision—one real-world case showed a 30% cost saving with only a 15% reduction in capacity.

But such calculations can be misleading. They often fail to account for the total cost of warehouse space, where the racking system typically represents only a small fraction of the overall storage costs. In the example above, the customer would have been better off financially by leasing a warehouse 15% smaller, rather than accepting a compromised racking configuration.

Once you’ve committed to a larger warehouse, it’s not as simple as “moving the walls” to reduce unused space. However, if you’re in that position, there are still ways to optimise: consider utilising only 70% of the space and floor stacking in the remainder.

The key takeaway is clear: Always evaluate the true cost of ownership—not just the upfront price. A slightly higher initial investment in well-designed racking can lead to substantial savings and operational advantages over the long term.