By 2025, online retail sales should increase to $1.3 trillion, up from $875 billion in 2022. This rise in ecommerce sales leads to major shifts in the warehousing industry. Because ecommerce operates differently from traditional brick-and-mortar retail stores, warehouses that support online businesses must also adapt. Faster delivery times and smaller orders make ecommerce warehouses different from those that serve major retail stores. Ecommerce warehousing solutions today must rise to meet the needs of a growing number of online sellers with options that include small warehouse spaces and flexible use.
What Is eCommerce Warehousing?
Warehousing for ecommerce gives online sellers storage space and room to organize and ship their goods.
History of Warehousing and Status of the Industry Today
Warehouses have dotted the landscape of cities for millennia, storing grain, dry goods, produce, and other goods. In the 19th century, major rivers and rail lines were the prime locations for wholesale warehouses that took local agricultural products and distributed them via rail or river to major cities around the country. The areas around warehouses also grew to meet the needs of those who used the storage facilities.
Warehouses have long played roles in defining their neighborhoods. These facilities fostered the growth of various businesses within the area. For instance, banks, hotels, and restaurants appeared near warehouses to provide services to warehouse employees and traveling salesmen. To appeal to consumers, warehouses also used attractive architectural styles that often appeared in advertising. Using these structures in ads showed the business’s strength and stability, ensuring customers that the business operations would be as stable as the sturdy construction of its warehouse.
For years, large companies could afford to own, operate, and maintain warehouses. However, with numerous small businesses online in need of locations around the country to ship their goods from, the demand for warehouses to provide smaller spaces and more flexible options has emerged.
Today, there are several types of warehouses that cater to small businesses that have online or offline sales. WareSpace has flexible space sizes, for instance, and offer new ecommerce business owners small warehouse space to securely store their products instead of in their homes or garages.
As businesses that need warehouses increase, the warehousing industry will also grow. In a 2022 report from Research and Markets, researchers predict the warehouse industry will have a compound annual growth rate (CAGR) of 4.9% from 2022 through 2027. Its value will grow from $451.9 billion in 2021 to $605.6 billion in 2027.
How Does eCommerce Impact the Future of Warehousing?
Ecommerce will not only impact the availability of smaller spaces. It will also affect how businesses design and use warehouse spaces.
Design Warehouses for New Technologies
Modern warehouses will need to use more technology within their operations to reduce mistakes and speed up product storage, retrieval, and shipping. Warehouses need precise organization to allow for employees to quickly find products and know when to reorder. A warehouse management system (WMS) connected to scanners can track inventory in the facility. However, to accommodate real-time updates, the warehouse will need wifi throughout for the scanning equipment to connect to the WMS. Plus, some facilities may need more electrical outlets for charging tools and electronics.
The goal of a modern warehouse design is storing more products in less space. Plus, today’s ecommerce businesses must know what inventory they have on hand at a moment’s notice to keep their unsold inventory and overhead at a minimum while having enough to fulfill orders. This delicate balance is possible with the help of warehousing technology and facilities that can accommodate them.
Ecommerce warehousing solutions need to have space for automating various facility functions. Whether that automation is a heating and cooling system set on a timer, a WMS that automates ordering, conveyor belts, or automated storage and retrieval systems (AS/RS), the facility should meet the needs of the business using it.
Smaller ecommerce businesses may not have the funds to invest in multiple automated processes. However, small changes, such as conveyor belts to save on walking or motion-activated lights to save on energy bills can still give the businesses that use them an edge against competitors and allow for future growth.
Automating basic processes saves time and reduces costly errors. For instance, automated operations reduce warehouse employee strain, which can help to keep them happier. By cutting worker strain, reducing time, and preventing errors, automation allows small companies to have the time needed to meet customer needs and grow.
According to Statista, 57% of e-commerce shoppers want fast shipping when selecting a delivery option. This value only comes in second to free shipping, which 69.2% of shoppers look for. To meet the demand for fast shipping, ecommerce sellers need to have their warehouses located near their buyers. Closer warehouses shorten shipping times and help to bolster customer satisfaction.
The Future of Warehouses
The future of warehouses lies in growth and catering to the needs of ecommerce businesses. Various ecommerce warehousing companies will present various solutions. At WareSpace, you can find a variety of small space options, free wifi, on-site security, and the ability to use your warehouse space as an office. Few other warehousing companies can provide these perks. Learn more about our options for ecommerce businesses of all sizes at WareSpace.
Your Space Is Ready
Your space is ready. Is your business prepared to make the move to a small warehouse space? Book a tour today!
Many ecommerce owners may start their business inside their homes. They send out orders from the stock stored in spare rooms, basements, or garages to save on costs. If you have an ecommerce shop, you may have grown your operations to where you want to expand your stock lines and market to more regions. This operational growth requires you to move into an established facility, but you may be wondering what to look for in a warehouse for ecommerce. Learn about what to look for in a small ecommerce warehousing solution.
What is eCommerce Warehousing?
Ecommerce warehousing refers to the storage of inventory that will fulfill orders for products that customers purchase online. This process differs from dropshipping, where the storage and shipping of goods is typically done by a supplier. With ecommerce, the business owner handles marketing and takes product orders.
Importance of Finding the Right Small Warehouse Space
It’s important to find a small warehouse space that accommodates your business setup and how you fulfill orders. A small warehouse space should streamline your supply chain when receiving orders, storing products, and picking/packing products for shipments. The right ecommerce warehousing solution should speed up your productivity.
What to Look for in a Small Warehouse Space for Ecommerce
There are several factors to look for when you are in search of a small ecommerce warehouse. Keep in mind your available working capital and the current size of your business. You want to look for a small warehouse space that accommodates your operations without being too crowded for all your products yet not too large where you are paying too much in warehouse overhead costs. Check to see if the ecommerce warehouse provides the following features.
Does the Warehouse Have Diverse Capabilities?
The ecommerce warehousing companies should offer loading docks specific to your fulfillment needs that are separate from other ecommerce businesses. It should be equipped with racking systems and shelves that accommodate the size and shape of your products and allow you to easily customize the shelves for products that may be bulky, large, or in odd shapes.
You should be able to reach all products safely and the space should be big enough for you to move about and fulfill orders.
Do They Offer Additional Services?
Some ecommerce warehousing companies only offer storage space. Others may provide other features to help you better manage your inventory. For instance, you may want secure wifi to run a warehouse management system. Ecommerce warehousing may also offer other perks like warehouse equipment, office spaces, conference rooms, kitchen & lounge spaces, and packing and labeling areas.
Always be aware of what additional services that a place may offer even if you are a small business that doesn’t need these add-ons at this point in your operations. You may want to opt-in later for these services as you scale up. WareSpace offers everything your small business needs to grow, learn more on our amenities page.
In What Regions Are They Located?
Location is an important aspect to consider when looking for a small warehouse space. You want the facilities to be easily accessible and close to manufacturers for restocking while also close to your customer base.
3 Benefits of Using an External eCommerce Warehouse
Companies offering warehousing for ecommerce may provide the solutions you need when growing your business.
Easier to Stay Organized
Ecommerce warehousing solutions provide ways for you to stay organized. They offer a broad range of shelving and racking solutions to more easily pack your product inventory to fulfill orders. They offer small warehouse spaces in different sizes so you have the right amount of space without being overly cluttered. You can move freely to quickly fill orders and get them shipped out while also receiving shipments from suppliers.
More Accurate Picking and Packing
Picking and packing solutions may involve industrial racking systems and bins that can easily be tabled with product barcodes to improve product visibility when retrieving items. You can implement the type of warehouse picking and packing method that best works for you, such as zone picking or batch picking, to accurately fill orders and minimize errors. You may also easily update your inventory software to have more accurate inventory numbers so you will know when product levels are running low.
Time to Focus on Growth
A major benefit to having an ecommerce small warehouse space outside of your home is that it helps to further mature your operations to grow your business. It provides the right tools to efficiently fulfill orders. With an efficient supply chain, you can place more of your focus in other areas of your business. This growth may involve purchasing additional product lines, opening additional ecommerce shops, or hiring more employees.
If you are wondering what to look for in a warehouse for ecommerce, you first have to understand your current picking and packing needs, storage requirements, and budget. These factors will help you choose the best external ecommerce warehouse. An ecommerce warehouse solution should make your operations easier to manage so you can continually bring in more sales and profits. To learn more about what WareSpace’s small warehouse solutions have to offer your small business visit our Explore our Spaces page.
Your Space is Ready
Here at WareSpace, we offer small warehouse spaces for ecommerce owners that are looking to move their operations outside their homes. These spaces are designed to meet the needs of your operations, no matter the size, and to provide for more efficient inventory storage and picking and packing solutions. In addition, we offer a range of additional features in one all-inclusive price. Contact us today to learn more.
Ecommerce sales have been on the rise for the last several years. The pandemic triggered a rapid acceleration in growth among online retailers, with sales in 2020 increasing by 43% compared to 2019. Today, the growth of ecommerce continues. According to the U.S. Census Bureau, as of the third quarter of 2022, ecommerce continued to grow, showing a 10.8% increase from the same quarter of the previous year. Your ecommerce business can grow with the industry, but you must think about how you store your inventory and seriously consider the benefits of having warehouse space for ecommerce companies.
What Is eCommerce Warehousing?
Ecommerce warehousing solutions offer several benefits for online retailers including space needed to store, sort, and ship products they sell online.
Why Moving Your eCommerce Company from a Garage or Living Room to a Small Warehouse Space Is Beneficial
Your home only has so much space available for you to live in and run a business. Reaching your home’s storage capacity, by filling any free space with inventory for your e-commerce business, limits the amount that you can sell. Plus, by having goods in multiple spots around your home, you have a greater chance of losing track of what you have available in your inventory and when you need to reorder products.
Ecommerce warehousing solutions provide the answer for many small businesses needing storage space. Not all businesses need large warehouses. Learn why WareSpace’s small warehouses are perfect for your ecommerce warehousing needs. Our options allow you to select a warehouse space that matches your volume of inventory. When moving from your home and into a warehouse for the first time, you will likely find that a small warehouse space is sufficient for your storage needs. As your business grows, your warehouse space should, too. Scalable warehousing means that you can choose a larger or smaller warehouse space as your business needs change.
In brief, moving from your home into a warehouse provides you with the advantages other businesses have and helps you to compete among other ecommerce retailers.
5 Benefits of Having Warehousing for eCommerce Businesses
When considering whether ecommerce warehousing solutions are right for your business model, consider your budget, time, and supply needs. Also, recognize that you can gain significant advantages by moving your ecommerce business operations and inventory into a small warehouse space.
1. Ship from Locations Closer to Your Customers
If you want to become affiliated with Amazon through its Seller Fulfilled Prime program, you must have the ability to prepare, package, and deliver orders within two days. This strict requirement stems from the company’s overall ability to meet those short deadlines in its own deliveries. For a small business to meet this type of shipping requirement, you should have a facility that can keep your inventory sorted and ready to package and ship at a moment’s notice. Plus, the warehouse location allows you to position it closer to your customers, thus shortening delivery time. Even if you don’t partner with Amazon, you should still work toward reducing delivery times to keep customers happy. One way to do so is by using a warehouse from which to send your products.
2. Keep Your Inventory Secure
Inventory is a major component of your ecommerce business’ budget. In fact, startup companies may spend between 25% and 35% of their operating budget on inventory. With such a deep investment in the goods you sell, you need to keep them secure. Ideally, you should select an ecommerce warehousing facility that offers 24/7 security with video monitoring of the premises and access control of your space. With these control measures, you can have greater peace of mind that your inventory will be available and protected from theft.
3. Improve Inventory Organization
Homes, garages, and even self-storage units that store inventory for the smallest of new ecommerce businesses don’t offer space to organize or sort products. With a dedicated small warehouse space to organize products, the chance of losing inventory items in clutter drops.
4. More Easily Implement Warehouse Management Tactics
To start using a warehouse management system (WMS), you need to know what you have in your inventory. With an organized ecommerce warehouse storing all your goods, you can more quickly account for all the inventory goods you have. Use this information to facilitate the setup of your WMS, which you can connect to your ecommerce site to further make selling products and buying inventory even easier.
5. Increase Inventory in Scalable Spaces
While your home has a limited amount of space, ecommerce warehouse solutions include a variety of space sizes. As your business grows, you can move into a larger warehouse facility with ease. Similarly, if you need to scale back on your inventory, you can move into a smaller warehouse space.
What Happens If You Don’t Seek eCommerce Warehouse Solutions for Your Business
While ecommerce warehousing offers several advantages for businesses, few online retailers recognize the dangers of not expanding into a small warehouse space. If you keep running your business out of your home, as your retail sales grow, you will face many problems that could impact your bottom line.
1. Hit a Growth Ceiling
Your ecommerce business could hit a growth ceiling. Without storing your inventory in an ecommerce warehouse, you will only be able to grow your business as much as the space in your home allows you to keep your products. Over time, your family members may not like that your business has overtaken the house or garage.
2. Lose Inventory and Money
Another danger of not having a small warehouse space for your ecommerce business is losing money due to poor organization. Not having an organized warehouse for your ecommerce inventory makes losing inventory items more likely. Similarly, reordering products before you need them means that you will have used money and wasted space with excessive products in your home storage.
3. Waste Time
Finally, time and money are intricately linked in the business world, including for small ecommerce businesses. Therefore, anything that wastes time also will cost you money because you will not be able to spend as much of your attention on building customer relationships and improving your business. Wasting time finding inventory items, not knowing what you have on hand, or needing to contact customers because of out-of-stock products all can cost your ecommerce business money.
Your Space Is Ready
Take the chance to expand your ecommerce business by moving your inventory into a small warehouse space. You’ll reap the benefits of a better organized and more secure area for your goods. Why wait any longer to make your move toward greater growth? Your space is ready at WareSpace.
Small businesses make big contributions to the United States. According to the U.S. Small Business Administration Office of Advocacy, there are more than 33 million businesses with less than 500 employees in the country, and many are eCommerce businesses. During the pandemic when people had to stay at home, online sales rocketed and global e-commerce grew, increasing by 19% as compared to pre-COVID levels, according to the International Trade Administration. Today, eCommerce sales account for 14.8% of all retail sales. With the rising popularity of online selling, today is an opportune time to consider expanding your business from out of your home or garage and into an eCommerce warehouse space.
What Is Ecommerce Warehousing?
Ecommerce warehousing offers a secure place for receiving, storing, organizing, and shipping goods for small companies.
Benefits of Ecommerce Warehousing
It’s common for new eCommerce businesses to operate out of your home and store goods in a garage. However, these are not the best options for a growing company. ECommerce warehousing solutions offer you benefits beyond being able to use your garage again.
First, how organized is your garage? If you use the garage for both personal and business use, your products could easily become lost. Ask yourself: can you easily determine stock levels, know when to reorder products, or decide if you can fulfill a customer order? It can be hard to answer these questions with unorganized inventory spread across your home and garage.
A small warehouse space solves organizational hurdles by providing you with everything you need to receive shipments, organize, and store all your eCommerce items. A well-organized facility allows you to accurately determine when to reorder goods and to keep track of the ones that you have. You’ll reduce problems with lost inventory and the added costs of reordering products too often. To learn more about all of the amenities that WareSpace offers visit our full amenities list and breakdown.
If you store goods in your garage, a spare room, or the living space of your home, finding items that you sell online may require you to sort through several locations around your home. This wastes precious time that you could otherwise use toward running your business.
ECommerce warehouse solutions solve this problem by keeping everything you need where you can easily find them. Plus, small warehouse spaces have the room required for you to package and ship the goods that you sell. Better organization of your inventory and adequate space to prepare items for shipping saves you time.
Reduce Shipping Delays
By having your inventory meticulously organized, you reduce the chances of sending the wrong order to customers. Incorrect orders eat into your time and profits given the attention required to process returns and correct orders. Plus, your customer satisfaction can drop when you send out the wrong items. When you know where everything is in your warehouse and that you have enough items in stock to fulfill customer orders, you can get your shipments out quickly.
Another way that ecommerce warehouse solutions reduce shipping times is by putting your products closer to your customers. Depending on how you choose to leverage the benefits of warehousing and shipping for ecommerce businesses, you may choose to store goods in small warehouse spaces around the country. Distributing your inventory from multiple places reduces the shipping time, allowing customers to get their products as quickly as possible.
By moving your ecommerce operations into a small warehouse space, you return your garage and home living spaces to the rest of your household. You and your family regain more room at home when you have a warehouse dedicated to storing your business inventory.
What to Look for in an Ecommerce Warehouse Space
When looking for an eCommerce warehouse space, search for ecommerce warehouse providers that offer the following perks:
- On-site security
- Proximity to your customers
- Facility management
- Regular cleaning
- Adequate storage space for your needs with scalable solutions for the future
- Loading docks for receiving and smaller package receiving
- Logistics equipment to move goods around your warehouse, such as dollies
With the above features, an eCommerce warehouse provides your business with an upgrade in inventory storage.
Ecommerce Warehouse Management Best Practices
An organized ecommerce warehouse makes practicing good management easier. By implementing a warehouse management system (WMS) and connecting your online store to it, you’ll more easily be able to establish inventory reordering processes and make the most of the space. Scaling up for future growth becomes easier.
Use a Warehouse Management System
As your ecommerce business grows out of your home and into a small warehouse space, your inventory tracking method should also scale up. The most powerful tool for organizing and managing your small warehouse space is a WMX. A WMS tracks product availability, helps you to plan when to reorder products, facilitates order fulfillment, and manages your supply chain. You will save a lot of paperwork and will streamline your business operations when you have your eCommerce inventory managed by your WMS.
Connect Your Store to Your WMS
Another way to make the most of your WMS is by connecting it to your ecommerce store. When you do this, the system can speed up order fulfillment, send customers updates on shipping, and facilitate operations across multiple sales channels and ecommerce sites.
Determine Inventory Reordering Frequency
Keep track of your inventory and how quickly it sells. This information will allow you to calculate the inventory turnover ratio (ITR). The turnover ratio reflects the strength of sales of your eCommerce business. Larger numbers indicate stronger sales. To find it, divide the cost of goods sold by the total inventory value. Determine how often you should budget for restocking by dividing 365 by the calculated ITR. This gives you the average number of days your business needs to go sell its full inventory.
When choosing to reorder individual items in your inventory, set a minimum number of products to have on hand to fulfill orders until the new products arrive. Each product minimum should be based on past sales. Fast-selling products may have a higher minimum number than goods that sell at slower rates. If you have a WMS for your ecommerce warehouse, set up the system to reorder as soon as inventory items reach minimum levels.
Choosing eCommerce Warehousing Solutions
When choosing a small warehouse space, consider your business needs. You may need a space that offers the flexibility to serve both as inventory storage and as an office. Quality solutions will have amenities to do both and to securely store your eCommerce inventory without breaking your small business budget.
Check out our options at WareSpace. You’ll find small warehouse spaces ideal for those transitioning away from home-run businesses. Plus, you get perks that you won’t find from other eCommerce warehousing companies. We offer an on-site manager, package receiving, scalable spaces, Wifi, and much more for one affordable rate.
Your Space Is Ready
In 2022, we saw ecommerce businesses generate greater sales during and after the pandemic. With a bright future ahead, now is the time to move your ecommerce business forward. Your ecommerce warehouse space is ready. Are you prepared to upgrade your business? Find out more about how your ecommerce business can grow with wholesaling and warehousing ecommerce solutions from WareSpace.