Have you ever ordered something online and been blown away by how quickly it arrived at your doorstep? That’s the power of immaculate E-commerce warehousing!
Without reliable warehouse logistics support, even the most innovative E-commerce businesses would struggle to keep up with customer demand. In this post, we’ll explore the ins and outs of E-commerce warehousing and how it can help you take your business to the next level. Read along!
What Is E-commerce Warehousing?
E-commerce warehousing is the process of storing and managing goods before they are sold online. Effective E-commerce warehousing ensures that the products are safely stored and accurately delivered to customers on time. It also involves keeping track of where the items are located, how long they’ve been in storage, and how much inventory is available at any given time.
What Does E-commerce Warehousing Management Consist Of?
If you are managing E-commerce warehousing yourself and have not partnered with third-party services, these are some of the activities you might have to handle on a day-to-day basis:
- Training and management of warehouse staff
- Maintain strong relationships with logistics handlers
- Forecasting inventory and shipping volume
- Obtain all the necessary certifications and licenses to operate
- Ensure that your warehouse is adhering to local safety regulations
- Recording incoming and outgoing shipments
And, of course, you need to keep the products secure and ensure that delivery is happening on time.
What Are The Types Of E-commerce Warehouses?
E-commerce businesses can choose from several types of E-commerce warehouses depending on their specific needs and requirements. Here are some of them:
Private warehouses are owned by large businesses, wholesalers, and online marketplaces to handle their own inventory needs. As a result, these warehouses are highly customized and tailored to their needs. For instance, if the business sells perishable goods, the warehouse will be equipped with a cold storage facility. Warehouses owned by Amazon and Flipkart are prime examples of private warehouses.
Public warehouses are owned by government agencies. They are less advanced and well-equipped than private warehouses and may have limited facilities to store your goods. Government agencies rent these warehouses at highly affordable rates. Due to their minimal functionalities, they are only suitable for short-term storage requirements and ideal for sprouting startups.
These E-commerce fulfillment warehouses collect goods from multiple suppliers, group them into larger shipments, and then deliver them to different destinations within the same city or area. They act as both the collection center and distribution centers for brands.
As businesses are sharing transportation but get their own storage space, it is an economical solution for small and medium businesses with limited inventory.
Bonded warehouses are managed by customs authorities, providing storage facilities for imported goods before the business pays the customs duties & taxes.
It is common knowledge that a business that imports goods must pay import duties immediately after delivery. However, a bonded warehouse bypasses this rule by letting the business owners pay when they take the goods out of the warehouse.
P.S: Some interesting facts: the name “bond” comes from the customs authorities issuing the businesses a “bond” when they begin to rent the warehouse.
Smart warehouses use state-of-the-art technologies like artificial intelligence, drones, robotic arms, and automated vehicles to manage everyday warehousing operations. Because of the automation offered by these cutting-edge technologies, these E-commerce warehouses are highly efficient but equally expensive.
Cooperative warehouses are owned by multiple businesses from the same industry or selling similar products. They share the warehouse because they have similar storage needs. Cooperative warehouses are almost like private warehouses, except that multiple businesses own these warehouses.
Members of cooperative warehouses pay a small fee for using this facility, while non-members shell out more.
Better than the traditional warehouse, E-commerce fulfillment centers are designed to not just receive and store your inventory but to pick, pack, and ship orders to your customers too.
E-commerce businesses often use fulfillment centers by outsourcing their order fulfillment to third-party logistics (3PL) providers like Amazon’s FBA (Fulfillment by Amazon) services.
Don’t Let These Factors Stop You From Outsourcing E-commerce Warehousing
Most emerging D2C businesses, despite the benefits of warehousing, do not consider outsourcing their warehousing and distribution. Don’t let the below factors stop you from outsourcing your warehousing process:
1. Your business operates from home
If you are operating from home due to the convenience it offers, it is natural to feel apprehensive about outsourcing your E-commerce warehousing. What if the outsourcing partner asks you to move out to a larger location? What if your staff can’t commute to the new warehouse? What if you have to give up some of the control you had over your business? Such questions are inevitable.
We have good news for you. By outsourcing your E-commerce warehousing, you can still operate from home without losing any control over your business. In fact, the outsourcing provider will only handle the redundant and manual tasks involved in warehousing and storage, allowing you to focus on more strategic and mission-critical aspects of your business.
2. You feel you’re too small to outsource
There is a common misconception that outsourcing is only for large businesses. This is plain wrong. In fact, small businesses have more to gain from outsourcing than large enterprises because they get instant access to expertise and technology that large enterprises would have waited for several years to build.
Also, outsourcing your E-commerce warehousing can help reduce your business risks – you don’t have to worry about the liabilities associated with managing your own warehouse anymore. It will be taken care of by the service provider.
3. You think it is a huge investment
E-commerce warehousing might seem like a huge investment, but it turns out to be quite cost-effective in the long run. For instance, when you outsource, you don’t have to worry about purchasing and maintaining equipment, hiring and training staff, or managing inventory. Instead, you pay the provider a fixed cost, which is way more affordable than managing everything in-house. Additionally, outsourcing allows you to scale up or down your demands, so you can adjust costs based on your business needs.
Benefits Of Using Warehousing Services
Regardless of your scale of business, using E-commerce warehousing services have many benefits:
1. Faster shipping
We are living in the era of 10-minute delivery. So consumers naturally expect all their orders to reach quickly (if not in minutes!). To reduce delivery times and improve customer satisfaction, you can use warehousing services that can expedite your picking, packing, and shipping process. Also, it gives you an opportunity to store your goods in multiple warehouses. This ensures that your inventory is always close to your customers and can be delivered quickly.
2. Better inventory management
Warehousing services can improve the accuracy of your inventory monitoring process and prevent the loss of items. Most warehousing service providers offer advanced inventory tracking and management systems, which let you keep track of your stock levels, monitor product performance, and identify trends and patterns in customer demand. It will help optimize procurement, reduce wastage, and avoid stock-outs or overstocking.
3. Less stress
Managing a warehouse comes with a lot of baggage. You need to monitor the A-Z of your inventory without errors and ensure no delays. Doing this daily can be tiresome. Third-party E-commerce warehousing services take a considerable chunk of these responsibilities off your plate. They have the means and experience required for inventory management.
4. Time savings
For E-commerce business owners, time is money. By freeing up your time for day-to-day supply chain management and analysis, you can better concentrate on business-critical operations.
What Happens Without E-commerce Warehouse Management?
Without a proper warehouse management system in place, E-commerce businesses can face a lot of operational issues that can negatively impact their reputation and sales. Here are some of the consequences of not adopting effective E-commerce warehouse management:
1. Inventory gets lost
Without investing in E-commerce warehouse management, you may find it challenging to keep track of your inventory. As a result, there are high chances of losing, misplacing, or having products expire, especially when dealing with an extensive catalog.
2. Wrong inventory gets shipped
Without proper processes in place, there are high chances of manual errors creeping into your warehouse operations. You may end up shipping the wrong products to the customers, which can result in dissatisfaction, returns, and additional costs for your business. Even worse, it can damage your reputation and drive your loyal customers away.
3. Stock-outs or over-purchasing inventory
By not adopting E-commerce warehouse management, you will never know how much inventory you should have on hand. This can result in early (and unexpected) stockouts or over-purchasing of inventory. Stockouts can lead to lost sales, while over-purchasing can lead to outdated inventory that you can no longer sell. Not to forget the additional cost of management.
How 3PL services can help you with warehouse management
Outsourcing your warehouse management to third-party logistics (3PL) providers let you enjoy benefits like improved efficiency, better scalability, and reduced costs. Here are some other ways in which 3PL services can benefit you:
Ship easily on major marketplaces
Many 3PLs offer direct integrations with major marketplaces like Amazon, Flipkart, Myntra, Nykaa etc. By partnering with such providers, you can seamlessly fulfill all your orders and manage inventory across multiple sales channels from one centralized location.
Customers hate to be in the dark when it comes to their orders. They want to be in the loop from the moment they place an order till the time it arrives on their doorstep. This is made possible through 3PL providers, who provide advanced order tracking systems. It enables the end users to monitor their order progress in real-time, resulting in customer satisfaction. As an E-commerce business owner, that’s one key responsibility you don’t have to worry about.
Just like order tracking systems, most 3PL providers offer sophisticated inventory management systems that let you optimize your inventory levels. Apart from the real-time status of your inventory, these systems monitor trends and historical patterns, helping you predict demand and build stocks. In brief, you can avoid the pain of overstocking and stockouts.
Scaling up operations
With rapid growth comes the demand for more space to store your inventory. This is where 3PL providers help. They offer scalable warehousing solutions that adapt to your business’s changing needs. Whether you need additional storage space or expanded shipping capabilities, 3PL service providers offer everything at an affordable cost.
Faster order fulfillment and return management
Location can no longer be an excuse to deliver orders late in this hyper-connected world. Today, if you don’t deliver fast, your competitors will. This is where the need for a 3PL provider arises. They normally own multiple warehouses spread across the country. This lets you ship orders and manage returns quickly as your distribution centers are closer to the customers, and the orders have to hop across fewer shipping zones.
Let ANS Commerce Help You With E-commerce Warehousing
As India’s best E-commerce enabler, ANS Commerce offers end-to-end solutions to manage your online business – from performance marketing and marketplace management to warehousing & logistic services – we provide it all!
Spread across pan India, we provide fully equipped storage facilities with cutting-edge warehouse management systems (WMS) and order fulfillment capabilities – pick, pack, dispatch, and return management.
To know more about how ANS Commerce can help you with warehousing and logistics support, book a free consultation today!