Every warehouse manager wants to improve their profitability by minimising costs and increasing revenue. For many, it’s challenging to increase margins simply because of operational costs and few opportunities to minimise costs. However, technology advances in LED lighting has provided a way for warehouses to minimise their overhead costs while improving profit margins in other areas of the business. If this sounds like music to your ears, then check out the ways achieve it below.

Benefit from government schemes.

The New South Wales and Victorian governments have launched schemes (VEET and ESS) that will allow businesses to upgrade their facilities to become more energy-efficient. Warehouses that opt to participate in the scheme can potentially benefit by receiving discounts and subsidies.

Improve your warehouse’s financing strategy with on-bill finance.

Warehouses are in a position to upgrade their facilities by leveraging long-term finance deals rather than paying for the total cost upfront. The total cost of retrofitting the warehouse with LED lights is split over a finance term and is coupled with the bill that would normally be received from the energy supplier.

Because LED lights can draw up to 80% less energy, the energy bill with the financing cost can be cheaper than the existing bill that the warehouse is paying for; making the deal cashflow positive.

Improve the operational efficiency of your warehouse.

One of the most overlooked benefits is the improvement to a warehouse’s operational efficiency. This covers employee satisfaction, employee productivity as well as health.

High-bay LED lights improve visibility within the warehouse, which helps to minimise employee accidents and therefore reducing sick leave and workers compensation costs to the warehouse.

Additionally, the brightness will improve the perceived workplace conditions and motivate employees to work harder and increase their output. Morale in the workplace tends to be better which should allow the warehouse to improve its overall profitability.

Upgrading to LED lights will have direct impact on your warehouse’s overhead costs.

The biggest advantage of upgrading to LED lights is the cost impact on your warehouse’s overheads. Typically, lighting costs will account for at least 15% of your warehouse’s overhead costs. Most warehouse managers notice initial savings of up to 50% on their lighting expenses, which can even extend up to 80%.

In the past, increasing profit margins in warehouses might have been hard to come by, however the opportunities that’s available with LED light technology gives Australian warehouse operators the chance to benefit over the long run.