In 2022, eCommerce continued to climb its rapid upward trajectory with 268 million American shoppers buying from online stores. It is estimated that in the next three years, online shoppers will grow to an estimated 284 million. If you have an ecommerce business, you may need to start thinking about expanding now. One solution is by learning more about ecommerce warehousing solutions and how they can help your business to make necessary changes for growth.
What is ecommerce warehousing? It involves the storage, securing, and preparation of products for online sales. Technically any place where you store your inventory can act as a warehouse. However, your garage will not offer your business the same space and management capabilities of an ecommerce warehouse.
How Does Ecommerce Warehousing Work?
Warehousing for ecommerce goes beyond merely stacking boxes of products and waiting for sales. Inventory management and product security are vital aspects of warehousing for all industries. In a world where online commerce fluctuates with demand, tracking inventory and protecting the goods that you have on hand are very important, to ensure prompt order fulfillment.
Inventory management includes knowing what you have on hand, when the inventory levels of products change, how often to reorder inventory items, and where you should store the items in your warehouse for the best retrieval.
Product security includes keeping your inventory items safe from theft, damage, and loss. On-site security prevents loss from theft. A well-built structure with shelves or racks to store items safely protects goods from damage caused by improperly stacking boxes. Finally, an ecommerce warehouse with an organized inventory means that you know exactly where your products are and how many you have. This can reduce the loss of time and money caused by products that disappear amid the clutter.
What Are the Different Types of Ecommerce Warehouses?
Several forms of ecommerce warehouse solutions exist. They differ in size, ownership, and operations. The best ecommerce option for your business depends on your budget, company size, inventory volume, and needed shipping times.
The government owns bonded warehouses. These facilities offer long-term or short-term storage of goods while awaiting customs approval. You may need to pay customs dues and fill out paperwork for incoming or outgoing products. The name comes from the “bond” issued to businesses that rent space in these facilities.
Consolidated warehouses allow owners to collect goods from multiple supplies and combine them into deliveries for the same area. Inventory items do not spend much time in these warehouses, which reduces the space needed and the overall cost to use.
Cooperative warehouses permit multiple businesses that sell related products to keep their goods in a shared space. Businesses in partnerships with others may benefit from the shared space and cost of a cooperative warehouse.
The government owns and operates government-owned warehouses, which provides reduced rates to businesses in specific fields. One downside to these facilities is the consequence of nonpayment. All inventory stored in the warehouse could come under government seizure if the business fails to pay its lease.
Mostly large corporations, such as Amazon, own and operate private warehouses that only store that company’s goods for sale. Manufacturers, distributors, and wholesale producers may also own private warehouses. These facilities need the resources of such large companies to ensure proper management of the warehouse and maintaining the facility.
Third-party ecommerce warehousing companies own public warehouses, which they lease space out to individual businesses for use. These facilities have various sizes and widely varying amenities that range from none to a full suite of features including security, loading docks, logistics equipment, Wifi, and more.
Larger companies that can afford additional automation tools tend to own smart warehouses. These facilities incorporate AI, robotic arms, automated storage and retrieval systems (AS/RS), drones, and data to vastly improve inventory tracking and management of large volumes of goods.
What Factors Should You Consider When Setting Up Ecommerce Warehousing?
When setting up your ecommerce warehouse, think about how you need the space and how you will use it. Factors to think about during setup include available space, equipment, safe operations, on-site security, and inventory management.
The space will depend on your typical volume of sales and how much inventory you need to keep on hand. The first warehouse for most ecommerce businesses tends to have a small space. However, as the business grows, you should scale up the warehouse with your sales.
Small Warehouse Equipment
Equipment for storing and moving equipment can protect you or any employees you have from injury while also keeping your goods organized and safely stored. Look for facilities that provide logistics equipment, such as dollies and pallet jacks. The facility should also have racking for safely storing your inventory. Other important pieces of equipment include packing equipment and locations on-site for sending and receiving goods, such as loading docks or mail drops.
Safety and Security
Safety and security are both important factors in running a warehouse. You need to make sure that you know the requirements from the Occupational Safety and Health Administration (OSHA) for safe warehouse operations. These guidelines ensure that everyone in your warehouse stays safe while working. You must educate yourself on warehouse safety but also choose a space that allows you to have room to operate without creating hazards.
Security from on-site security cameras and only allowing access to your warehouse by authorized personnel are important things to look for in any warehouse. Products stolen from your warehouse increase your operating budget. Good on-site security reduces your chances of loss.
Your inventory management will be up to you. You can choose from a variety of warehouse management systems (WMS), which are software programs used to track and order inventory. With these systems, you can look at your computer to determine if you have enough stock available for a seasonal rush. Additionally, these systems allow you to connect your ecommerce retail site. Customers can get order verification and shipment tracking automatically. Plus, the WMS can automatically order inventory items that sell out.
In brief, the features of the warehouse you use for your ecommerce business can impact your inventory management and business operations.
Your Space Is Ready
Once you understand how ecommerce warehousing works, you can fully appreciate the capacity it has to provide your business with the tools you need for growth. At WareSpace, we have several warehouse space options. Check them out to find the perfect space for your ecommerce business.
Your space is ready. Are you?
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.