In 1989, Kevin Costner’s character heard a mysterious voice say: “If you build it, they will come.” In this competitive eCommerce era where in 2022 US eCommerce online retail sales are expected to cross $1 trillion for the first time, warehouse solutions have never been more important. It can be a difficult, expensive endeavor to secure your inventory in the right place though, because of this competition involved. From the warehouse shelving perspective, if a facility builds it, the products will come and fill the shelves quickly right after.
So how do you get a jump on the competition and find warehouse space and warehouse solutions that work for your business? Well, the best place to start is understanding the different ways to house your inventory, the details of warehouse logistics, and how warehousing solutions fit into your supply chain strategy. Starting with the basics—what is the difference between storage space and warehouse space?
Storage for Your Inventory
Storage refers to the general act or method of stocking something. For that reason, it is a term with a much larger application than warehousing. Items in storage are not currently being used but are intended to be used in the future. Items placed in storage are often for personal vs. commercial use, like the Christmas decorations you put in storage at the start of January to be used for next season. However, in terms of eCommerce retail, storage may be where raw materials end up, or products that are no longer relevant for sales, but may matter later on. Keeping goods in storage minimizes their deterioration over time, thus extending the window when they can be used or sold.
Warehousing Your Inventory
Warehousing is the process of shelving goods in a warehouse or fulfillment center before they are sold or distributed. Though warehousing is a type of storage, there are some big differences. The main takeaway in terms of differentiation is that storage is intended for goods that are meant to stay put for a while; warehouses keep inventory that’s meant to move quickly—to eCommerce customers, distributors, and so on. Other ways that warehouses are unique in design and operation are as follows:
Warehouse Size – Storage spaces usually consist of many smaller units of various sizes. Warehouses tend to be bigger than storage solutions because warehouses and fulfillment centers can serve many, many eCommerce merchants at once. The immense size of a warehouse allows automation and innovative technology room to work with human employees, thus maximizing efficiency to get products out the door.
Warehouse Organization – With so many clients and products in the mix, warehouses have to prioritize organization otherwise productivity would come to a grinding halt. This fine tuned organization also allows warehouses to host more eCommerce clients than a messier facility would. The main prerogative though, is that organized inventory is safer and simpler to keep track of. You can easily ascertain an item’s location, how long an item has been there, and how long you should wait until it needs to be restocked to avoid backorders. It’s like a shoe closet; if it’s organized, you can spend more time at the beach than you do digging through your closet looking for the sandals to wear there.
Warehouse Fulfillment – There is a big difference between a traditional warehouse and a fulfillment center. However, fulfillment centers typically have built-in warehousing solutions. In this case, inventory is stored until an online eCommerce order is placed. This triggers the fulfillment aspect of your warehousing solution. Fast-moving fulfillment employees work with uniquely-designed fulfillment robotics to pick, pack, and ship products as quickly as possible.
Warehouse Safety – With a storage rental you may just get a steel box to place your inventory. Warehouses have systems in place to safeguard the quality and quantity of inventory you keep there. Depending on your type of eCommerce business, warehouses may utilize different forms of temperature and humidity control, insulation, designated hazmat areas and other separation to protect your products.
Various Aspects of Warehousing Solutions
Warehousing is a pivotal part of every eCommerce business. Accordingly, there are various layers to a warehousing solution. Just as a tasty British trifle must execute the individual layers of custard, jelly, cake, and cream perfectly to produce something that’s scrumptious overall, an effective warehousing solution must master the four areas of: general facility management, warehouse operations, warehouse management systems, and warehousing services.
1. Warehouse Facility Management
Just as a ship needs her captain and a team needs its coach, in order for a warehouse to succeed, management is key. Managing a warehouse entails:
- Overseeing all facility staff
- Training new team members
- Supervising safety and security measures
- Maintaining relationships with shipping carriers
- Keeping an eye on all moving parts
- Running day-to-day operations
- Staying updated on warehouse space and slotting
2. Warehouse Operations
Warehouse operations handle all aspects of moving and tracking goods. This begins with the receiving of inventory. The next step is placing and storing inventory in the proper location (on pallets, in bins, or on shelves) with the correct corresponding SKUs. And when an eCommerce order is triggered, warehouse operations must expertly pick, pack, and send the correct (and correct amount of) goods out for delivery in an efficient manner. Well-optimized warehouse operations will take steps to ensure:
- The right technology is used to simplify processes of moving, picking, and packing
- Fulfillment team members are trained to work efficiently alongside robotic assets
- Storage is utilized efficiently throughout the warehouse for max performance
- Aisles are kept clear, stations are kept neat, and packing areas are kept clean
- There is always enough product, and systems are in place to notify of need for reorder
- Inventory is received and shipped on time with accurate details
- Costs are kept low so eCommerce brands can afford the space they need
- Customers are kept happy because there are minimal mistakes with orders/deliveries
3. Warehouse Management Systems
In order for a fulfillment operation to flow smoothly, many advanced systems and innovative softwares need to be in place. A warehouse management system (WMS) is a type of software that allows eCommerce brands and the fulfillment and warehousing facilities they utilize to manage daily operations, inventory tracking, distribution of labor within the warehouse, and shipping of merchandise. At a glance, the main benefits of warehouse management systems include:
- Real-time insight
- Extreme visibility
- Faster order adjustments
- Less wasted money
- Fewer delayed orders
- Decreased inefficiencies
- Streamlined processes
4. Warehousing Services
Warehouses can provide an eCommerce business with many services past the simple storing of goods. In general, warehouses are a pivotal part of the supply chain that (when combined with a leading fulfillment provider) help you fulfill orders faster. The four main services a warehouse can offer when combined with a fulfillment provider include: storing inventory, distribution, shipping, and returns.
Storing Inventory – Warehouses keep different SKUs in designated locations within state-of-the-art fulfillment centers. The careful, organized assignment of goods allows fulfillment staff to easily locate inventory, eCommerce brands to stay in the know about their inventory quantity, and make adjustments such as:
- Shipping older inventory out before newer inventory
- Responding to recalls, experations, and damages
- Readjusting for restock and seasonal needs
Shipping – Warehouse operations need to be set up for shipping success. This encompasses two aspects. First, the shipping in of goods to the warehouse where they are unpacked in a timely manner then stored and arranged for efficient retrieval later. Second, the shipping out of goods to their final destinations using the right shipping carriers, such as USPS, UPS, FedEx, and DHL.
Distribution – Warehouses that work in conjunction with a first-rate fulfillment center can rapidly move products in and out, getting them from the manufacturer to the end user (retailer, wholesaler, direct eCommerce consumer) as soon as possible.
Returns – Part of the eCommerce world is receiving returns, whether they be for damaged products or products that just didn’t fulfill a consumer’s needs/expectations. Warehouses need to be equipped with the right processes and software to receive, assess, and process returned inventory. Every eCommerce business differs on their exact returns policy (varying in everything from return labels to tracking to refund procedures). However, the most effective way to ensure your returns are handled correctly while also maintaining great customer service is to rely on a fully-integrated post-purchase protection software like MonkProtect. This first-of-its kind technology makes the post-purchase process easier than ever with delivery protection, an automated claims portal, and branded tracking.
Where and How to Find Your Warehousing Solution
The basics of warehousing and storage have remained steady over the years; however, as the eCommerce industry has flourished, the fulfillment capabilities and necessities of warehousing have become critical components that can make or break a business.
For a small or new business, warehouse space may not be at the top of the to-do list. But all entrepreneurs must look to the future to be successful, and with warehouse space shortages and increasing warehousing demands, the sooner you look into warehousing solutions for your eCommerce brand, the better.
Just keep in mind that warehouse space on its own is not conducive to long-term business growth and scaling. For that, you need a warehousing solution that incorporates the intricacies of a full 3PL operation, which enhances the efficiencies of your supply chain from point A to point Z. Created by an entrepreneur for entrepreneurs, ShipMonk is leading the industry in warehousing solutions because of fulfillment strides in the areas of:
So don’t wait. They say when there’s a will, there’s a way. Well, if there’s a where, there should be a how. And if you’re looking for where to store your inventory and how to best optimize your eCommerce supply chain, invest in a warehousing solution powered by a progressive 3PL fulfillment provider like ShipMonk. Contact our team now to get started!