Warehousing has always been an important part of business — be it manufacturing, distribution, or retail.
However, with the rise of eCommerce, the demand for warehousing space has grown exponentially. It’s because warehousing & logistics is the backbone of eCommerce.
You may have the best products to sell online. But if your warehouse becomes a bottleneck, your order fulfilment can take a big hit. And that’s definitely not what you want as an eCommerce business owner.
So if you want to run a successful online store, you need to get your warehousing right.
In this piece, we’ll dive deep into various aspects of warehouse management so that you can run your eCommerce operations seamlessly.
But let’s start with the basics of warehouse management before we jump to the visual.
What is Warehousing?
Warehousing refers to the process of storing inventory in a way that it can be quickly and easily retrieved when required for order fulfilment or redistribution.
For eCommerce startups or small scale online retailers with capital constraints, warehousing usually starts in their home garage or spare room. As they scale up, they move their warehouse operations to dedicated storage facilities.
Fundamentals of Efficient Warehouse Management
The purpose of warehouse management is to optimise all warehouse processes and operations for better efficiency. That’s why it requires meticulous planning and control to operate a warehouse.
Here are some fundamentals to keep in mind to manage your warehouse successfully and yield the best results.
1. Customer Centricity
It’s a given that customers should be at the centre of everything you do.
Although warehousing is a back-end process, it has a significant contribution to the overall customer experience. If warehouse operations are streamlined, your customers would receive their orders on time (also before time).
At the same time, inefficiencies in warehousing would do the exact opposite. Needless to say, how negatively it can impact your brand perception.
Hence, study your consumers’ product preferences and buying behaviour in order to procure, store, and manage inventory in a way that orders can be fulfilled quickly.
2. Control Over Warehouse Process and Workflow
You need well-defined warehouse management processes to operate smoothly and efficiently. So make sure you have a solid grip on the below warehouse workflows:
- Receiving the incoming inventory and storing it
- Inventory management, kitting & bundling
- Order management, picking and packing, shipping management
- Fulfilment reporting & analysis, reverse logistics
You must get the above warehouse processes right as each one of them is interlinked with the other and potent enough to make or break the overall warehouse workflow.
3. Adaptability
The eCommerce industry is quite dynamic and requires high operational adaptability.
So while you want to ensure there are processes, workflows, and systems in place, you also want your warehouses to be adaptable to changing circumstances.
For example, sometimes trends may change suddenly and bring you additional business opportunities or challenges. Your warehouse and team should be flexible enough to encash such opportunities or manage crises as they come.
5. Data Guided
Just like any other aspect of eCommerce business, data is your key — not only for warehousing efficiency but also for cost-effectiveness and profitability.
For instance, accurate inventory data helps you:
- Generate correct demand forecasts
- Track stock reorder levels
- Prevent overstocking and stockouts
- Minimize backorders
- Optimise warehousing space, etc.
So ensure you have the right data collection and tracking systems in place for warehouse operations.
6. Technology
If you want to scale your eCommerce business consistently, you can’t stay distant from warehousing technology.
While warehouse and inventory management software are the bare essentials, robotics can help automate most of the warehouse processes. With the right tools and equipment, you can reduce warehousing errors and improve productivity.
However, before you invest in technology, you must also assess its impact on your returns. For instance, if you’re a low-volume D2C brand, investing in warehouse robotics isn’t a wise choice. It may take you years to break even on its cost.
Now that we’ve covered the fundamentals, let’s dig deeper into the Whats, Whys, and Hows of warehouse management with this detailed infographic.
Get Warehousing Success with 3PL
As you saw, there’s a lot that goes into planning and operating an eCommerce warehouse. Although warehousing is one aspect of eCommerce, it’s significant enough to impact the success of your business.
Besides, your warehousing requirements may keep changing as the business dynamics change. So you may also have to keep upgrading your warehousing facilities frequently.
However, it’s easier said than done. It can lead to huge capital investments.
That’s why eCommerce businesses that want to scale faster prefer outsourcing their order fulfilment to expert third-party logistics (3PL) providers.
When you partner with the right 3PL provider, they take care of your end-to-end warehousing and inventory management needs in their fulfilment centre. And their software integrates with your e-store. So as soon as products are sold on your website, orders are automatically passed to the fulfilment centre.
Thus, the entire order fulfilment cycle is managed by the 3PL service. It means you can focus on doing what you do best — marketing and growing your business, while they handle all the logistics.
Frequently Asked Questions (FAQs)
What is warehouse management?
Warehouse management is the process of storing and managing inventory in an optimal way. This helps the warehouse team to easily trace, track, and retrieve the products when they’re sold or redistributed to another warehouse.
Besides, it also helps in reducing warehouse costs by optimising the use of available storage space and thereby increasing the profitability.
What is warehouse management system?
Warehouse management system refers to the defined processes and policies that helps you organise the warehousing activities in a streamlined manner.
In the context of technology, Warehouse Management System (WMS) is a software that allows you to track all the inventory movements within a warehouse. Furthermore, this software also integrates with your online store and updates the inventory count accordingly.
How to set up a warehouse management system?
First, you need to have a clear idea about the scale of your business and warehousing requirements. Then you need to research the warehouse management systems available out there. Next, appraise them based on your business needs and budget.
Then, you can select the one that best suits your business.