Starting a cold storage business can be the best idea if you are looking to start a business with an initial investment for constant returns. Cold Storage is a one-time investment business, and the cost of operations is less.
This cold storage business can be profitable in both the short and long run, and you can put up a cold storage unit in both developing and developed countries. If you want more returns, you can choose to set up a multi-purpose cold storage unit so that you can store different types of products.
Is Cold Storage Business Profitable?
The demand for perishable goods is always fluctuating, and this increases the demand for cold storage. Retailers and businesses are always looking for ways to extend the shelf life and store goods till the demand rises. There is always a time constraint like transportation gap, harvest, and sale period, and demand for a product, and cold storage is one tool that could help in preventing losses.
Cold Storage units are also essential for farmers because they need a place to store that harvest, and without cold storage, the harvest may start to spoil before it even reaches the market, and people will have restricted access to fresh products. The prices begin to rise, and the farmers’ struggle begins.
Investment Costs for setting up a Cold storage
Setting up cold storage is profitable, but the process of setting it up and getting all the required permissions is complicated. The initial investment for this business is pretty huge; you would have to incur expenses on pricing the land, setting up the machinery, making provisions to ensure the efficiency of cooling systems.
Apart from the initial investment, you will also have to take care of the monthly electricity, water bill, and also make sure that you pay your employees and clear out all the promotional expenses.
Role of Location and Licenses
Location is the key to running a cold Storage. Setting up Cold storage in the middle of the city might not be profitable because you won't have enough customers who require cold storage. Even if you are able to find a couple of customers, they won't be regular.
Setting up Cold storage near farmlands and near industrial areas is suggested because these farmers and industries look for places to store their products without incurring heavy charges on transportation.
There are various rules and regulations that you have to know before setting up storage space, and you should also study various tax liabilities before getting the permissions. Setting up a cold storage unit without proper permissions is illegal.
Cold storage is a profitable business both in developing and developed countries.
Covid-19 Vaccine - An Inflection Point
As per the recent WHO reports, more than 50 percent of vaccines could be wasted globally annually due to logistics, temperature regulation, and shipment-related problems. The introduction of vaccines is an inflection point and a chance to build a new, sustainable cold chain that can be used for past the current crisis. Globally, the covid vaccine introduction means that it is not feasible to easily extend the existing cold chain of vaccination. Seeing this, Any Spaze, backed by technology-enabled solutions, is committed to re-shape the current landscape and exceeds the customer’s expectations.
A cold Storage business is not so common, and not many people think of this idea, but it is a pretty profitable business. You should make a proper business plan, select a suitable location, arrange finance, procure the land, and make sure you have enough space, look for suitable machinery and take care of all the possible factors affecting the business because it is hard to make changes later.
Any Spaze is India's largest on-demand warehousing storage management and supply chain solution platform that provides end to end cold chain solutions. They offer a broad range of integrated solutions and in-house Warehouse Management with flexibility, scalability, and a significant competitive advantage for optimum business performance..