Ecommerce warehousing is that the storage of physical goods before they’re sold online. Warehousing includes safely and securely storing products, as well as tracking where items are located when they arrived, how long they’ve been in stock and the quantity on hand at any given time.
What is Ecommerce Warehouse Management?
Ecommerce warehouse management refers to daily warehouse operations, including (but definitely not limited to!)
- Training and managing warehouse staff
- Managing inventory, equipment, and safety.
- Building and maintaining relationships with shipping carriers.
- Keeping products secure.
- Forecasting shipping volume and labor demand.
- Obtaining certifications and licensing.
- Scaling operations as the business grow.
- Keeping up with proper safety regulations.
- Recording daily inbound and outbound shipments.
Whereas in the past a company would need to open up a physical store, hire a web designer, and commit to a massive ad spend, now you only need a do-it-yourself web page and savvy social media use.
But one fixed cost that isn’t going away is the warehouse. Goods got to be stored.
Despite the high need for warehouse space, it’s a challenge to accurately predict its use. Many companies find it difficult to anticipate growth – and in turn, how much storage space they’ll need. This is to say nothing of “surges” that can surround a new product launch or the holiday season, when the need for extra space is temporary but not easily calculated. The result is that as much as 30% of warehouse space lies empty at any one time.
What’s involved in the eCommerce fulfillment process?
Fulfillment involves more than picking and packing orders.
There are four basic components of the e-fulfillment process:
ECommerce store and fulfillment center integration
Receiving and inventory management
Order fulfillment
Returns processing
Below, we discuss each component. By the end, you’ll understand what eCommerce fulfillment offers your company. You’ll be ready to take advantage of the power of outsourced fulfillment.
As you’re planning for the future of your business, here are some things you need to consider to take your e-commerce logistics to the next level.
Demand Planning
As a startup, you may not have that luxury. So how do you know how much inventory you’ll need? There are a couple of techniques to use until you build your own sales history.
First, monitor site traffic and social sharing. If your social media efforts start to pay off, demand could spike, and you’ll want to be ready. Look at seasonal trends such as changes in the weather and holiday-driven purchases. If spring comes early, outdoor items and apparel could see unanticipated demand.
Of course, refill to support your promotional efforts like discount codes and free shipping thresholds. Scalable warehouse space can assist you to plan for increasing demand without investing in long-term leases.
Visibility
As your e-commerce logistics needs to grow, it becomes harder to ascertain the large picture. Companies that experience rapid growth may add logistics capacity in an ad hoc fashion, bolting on pieces to deal with a surge in orders or new products. Perhaps you’ve expanded to use several warehouses, drop shippers, or other logistics tactics.
However, those pieces may not communicate very well, leaving the organization with an incomplete picture of their inventory and sales performance. It can be difficult to see your entire inventory situation and have that reflected in quantity counts on your internal systems as well as on your website. Shoppers want to be able to see if an item is available before they go through the checkout process. It’s a balancing act to stay enough stock available but not have excess inventory docking cash and shelf space. The answers are different depending on your market space, and the best solution is always a moving target. Work with logistics providers who can assist you develop the systems and operational discipline to form your inventory work for you.
Free Shipping
In a recent study, 73 percent of online shoppers said unconditional free shipping was “critical” to their purchase decision, according to Inc. magazine. Amazon boasts more than 100 million Prime subscribers worldwide, Fortune magazine reported, so free and fast shipping is obviously vital to consumers.
It wasn’t too long ago that 10-day delivery time was standard. Then in 2014 delivery times fell to about six days. By 2016, it had shrunk to three days. Now it’s closer to two days, and overnight for some Amazon shipments.
The thought of no-cost shipping spurs many online purchases, but of course, the shipping is only free to the consumer. The shipper must be as disciplined as possible to reduce costs while providing the service customers expect.
Your customers now expect two to three days for delivery, but don’t want to pay for it. Discipline in your supply chain can reduce costs to make free shipping a competitive advantage rather than a financial drain.
Last Mile
Last-mile service typically represents up to 28 percent of the total shipping costs, according to a study from the University of Delaware.
Keep in mind the last mile maybe a lot longer than an actual mile — we’re talking about the final delivery step to the consumer.
Managing Returns
The average return rate at a brick-and-mortar store is 8 to 9 percent, and for e-commerce can reach 24 to 36 percent, according to Transport Topics.
Experts say to handle returns properly, a retailer should consider a return as a reverse purchase with all the same care and oversight that goes into managing the original purchase.
Your return policies help incentivize buyers who can purchase with confidence that they won’t be stuck with products that don’t suit their needs. Do you pay for return shipping? Do you charge a restocking fee? Do you resell the items or liquidate them through a wholesaler?
Decentralized Warehousing
This strategy shortens the last mile to the customer. These facilities could be mini-warehouses or dedicated fulfillment centers. Some brick-and-mortar stores are converting retail locations into shipping centers, devoting some or all of the footprint to fulfillment. Warehouse Anywhere operates flexible warehouse space in over 10,000 locations nationwide, allowing you to place inventory exactly where you need it.
The distributed inventory strategy enables shippers to offer same day or overnight fulfillment in major cities, allowing them to compete with Amazon on shipping time. Reducing shipping distances will in turn reduce costs and improve service. Regionalized inventory opens up the possibility of using regional carriers, metro area couriers, and other delivery options that aren’t possible over longer distances.
3PL Relationships
Your company can concentrate on its core competencies and outsource logistics operations.
Functioning as a 3PL, Warehouse Anywhere can handle warehousing, fulfillment, and transportation relationships and ensure the customer experience meets your brand standards. Look for a 3PL that provides data on sales and inventory management to support strategic decision-making. Also, a 3PL has long-term relationships with carriers so shippers typically receive better rates than they could negotiate on their own.
Understanding and leveraging these trends will make sure that you’ve got the strategy and relationships to support your mission.
Start with Utilizing the Cluster-Picking Strategy
Before the increase of e-commerce, warehouses and distribution centers were wont to processing bulk orders. Now, they’re handling smaller orders and even individual items, requiring a more efficient picking strategy.
Cluster-picking is a simple method to start out with if you would like to form your warehouse suitable for e-commerce. It’s a cost-efficient strategy that focuses on the picking of things rather than orders. during this method, one picker collects multiple orders at just one occasion and places them in separate totes to avoid errors. Cluster-picking decreases the time period of workers, which accelerates the picking process and offers the potential to satisfy tighter delivery times.
Use Slotting Optimization for an Organized Inventory
An organized warehouse is critical within the e-commerce era because proper organization makes warehouse processes like picking and replenishment more accurate, easier, and faster.
Warehouse slotting is the process of identifying the foremost appropriate storage location for every product in your inventory. this sort of e-commerce warehouse layout also ensures you’re making the foremost out of your warehouse space for storing.
Optimize Your Reverse Logistics Process to Manage Returns Efficiently
Hence, it’s highly imperative to optimize the reverse logistics process.
Strategies to optimize this process include dedicating a neighborhood for returns, determining KPIs, and integrating warehouse technologies. to find out more best practices,
As e-commerce is seen to expand over the years, warehouses and distribution centers should prepare to support the changing demands of consumers. you’ll start small by either choosing more efficient picking methods or implementing advanced technologies.
Conclusion
Every eCommerce warehouse business has a unique blueprint, and what may work for a competitor or another enterprise may not necessarily work for your business. By employing a combination of different eCommerce warehouse strategies and testing them, you’ll be able to figure out which yields the best results for your brand.
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