Warehouse Sizing: How Many Square Feet You Actually Need

Size the box from pallet positions

Most brands take a broker number and sign. Eight months later they are staging cartons in the aisles, or paying rent on space that never fills. Both outcomes come from skipping one calculation.

Start from peak inventory, not current inventory. Take the highest stock position you expect in the next 18 months, which for most Indian sellers is the pre-Diwali build in September. Convert units to cases using real case counts, then cases to pallets using real case dimensions and stack heights.

Required pallet positions equal peak units divided by units per pallet, plus 15 percent for honeycombing, plus 5 percent for quarantine, damages and returns holding. Honeycombing is the empty space left behind in a partly picked pallet lane. It is real, it is unavoidable, and it is where naive plans lose a fifth of their capacity.

Do the cube math

A standard 1200 by 1000 mm pallet takes 1.2 sq m of floor. Selective racking with 3.5 m operating aisles and cross aisles lands net floor utilisation near 45 to 50 percent, so budget 2.6 to 2.9 sq m of built area for each pallet footprint.

Height is where the money is made. A Grade A shed with 12 m clear height carries four to five pallet levels. An older godown at 6 m carries two. That single difference halves or doubles your rent per pallet position for the same rate per square foot. At four levels, a workable planning factor is one pallet position per 12 to 14 sq ft of built area.

Now add the zones nobody budgets for. Inbound staging, outbound staging, packing benches, returns processing, quarantine and office take 18 to 25 percent of the floor in an ecommerce operation. A brand that plans 100 percent of the floor as storage has already lost a fifth of its picking speed.

Split reserve from forward pick

Do not pick from pallets for fast lines. Give the top 200 SKUs a forward pick face on shelving, carton flow or a mezzanine, sized at five to ten days of demand, and replenish from reserve racking on a min-max trigger.

In a typical catalog, 20 percent of SKUs carry 70 to 80 percent of lines, so a compact forward area cuts picker travel sharply. Mezzanine capex runs Rs 900 to 1,400 per sq ft in India. Against Rs 22 to 30 per sq ft of monthly rent, that pays back in roughly three years, which means it only makes sense on a lease with lock-in and tenure to match.

Size storage on peak stock, labour on peak throughput

These are two different plans. Storage follows the September stock build. Labour and packing capacity follow the October dispatch peak, which typically runs 2.5 to 3.5 times an average day.

Useful planning rates for single line ecommerce orders: a picker moves 40 to 70 lines per hour with cart picking, and a packing bench clears 220 to 320 simple orders per nine hour shift. So a 4,000 order peak day needs 13 to 18 bench shifts, not two more racks. Leave 400 to 600 sq ft of flat floor for temporary festive tables and courier staging, and confirm dock capacity, because three pickup vehicles at one shutter will cap you regardless of headcount.

Know the true cost per unit

Grade A rent in Bhiwandi, NCR, Hosur and similar hubs sits around Rs 22 to 30 per sq ft per month. Grade B space runs Rs 12 to 18 with lower clear height. Add CAM at 8 to 12 percent of rent, a security deposit of three to six months, a typical three year lock-in inside a nine year lease, and escalation of about 5 percent a year or 15 percent every three years.

Translate that into the only number that matters operationally. A 20,000 sq ft box at Rs 25 is Rs 5 lakh a month plus roughly Rs 45,000 of CAM. Dispatch 60,000 units and occupancy alone is about Rs 9 per unit. Dispatch 30,000 units and it is Rs 18. Rent per unit dispatched, tracked monthly, exposes an oversized lease faster than any utilisation report.

Signals the box is wrong

Watch four things. Pallet position occupancy above 85 percent, because pick productivity falls before you actually run out of space. Floor stored pallets above 10 percent of total, which means racking design no longer matches the mix. Peak overtime above 15 percent of regular hours, which is a labour and layout problem, not a space one. And occupancy below 55 percent for two consecutive quarters, which is money you can recover by subletting a bay or renegotiating at renewal.

Take the smaller box with a written first right on the adjacent bay. Under-leasing costs a few months of congestion. Over-leasing costs three years of fixed rent that no amount of operating discipline can undo.