E-commerce warehouses store and manage inventory that is to be sold online. In a sense, many e-commerce warehouses have begun assuming the role of physical stores for online businesses. Most e-commerce businesses rely on efficient and safe warehousing to grow and e-commerce warehousing is an important part of the order fulfilment process.
The three main types of e-commerce warehousing for order fulfilment include:
In-house fulfilment: The entire order fulfilment process is managed by your business in this process, often from your home or office. While this might cut down on storage charges, you might run out of space soon. While this offers you complete control of the order and has low start-up costs, it does take up a lot of your time and is not suitable for long-term growth.
Dropshipping: In this process, the product manufacturer controls the entire supply chain, and the merchant never handles any inventory. This system can also have lower start-up costs. However, there is almost no control over how the products are delivered and the overall customer experience.
Third-party logistics (3PL): This is possibly the most common method of order fulfilment, used by e-commerce businesses wherein 3PL service providers handle the process of picking, packing, and shipping your inventory on time. This kind of e-commerce warehousing is scalable according to your business growth and offers you an overview of your delivery process.
How to choose the right warehousing option?
Two of the major deciding factors in choosing the right warehousing option are the resources at your disposal and the quantum of orders. A start-up with few resources might find in-house fulfilment to be the most viable option. An e-commerce merchant start-up that cannot involve itself completely in the delivery process might choose dropshipping.
For an e-commerce business with enough resources and a sustained flow of orders, paying storage fees for 3PL services can be a practical option. Businesses that see a rise in orders for a specific period can consider on-demand warehousing. This system allows access to 3PL order fulfilment services for a fixed period.
Benefits of using external e-commerce warehousing
If you use external e-commerce warehousing, the entire process of storing goods and shipping the orders will be managed by professionals. It can cut delivery times and even provide you with discounts on shipping rates. Here are some of the benefits of using 3PL for e-commerce warehousing:
Organised system
A 3PL service provider can help you build an organisational system where you can keep a track of inventory and customer orders. You can get access to inventory count and tracking, shipment tracking, and regular reports, to help you identify areas to improve order fulfilment.
Accurate packing, picking and shipping
Supply chain optimisation is one of the main goals of 3PL service providers. This will ensure greater accuracy when it comes to picking, packing and shipping orders. This will ensure faster deliveries and a smoother customer experience.
Focus on growth
When you don’t have to invest time in storing, packing, and delivering orders, you can focus on business expansion.
What are the best e-commerce warehousing practices?
Here are some good warehousing practices to look for in any e-commerce warehouse.
Using Warehouse Management System (WMS)
WMS software helps businesses:
• Get regular and real-time reports about inventory and product availability • Plan inventory cycle and stock optimally
• Oversee supply chain operations at every stage of the delivery process
Integrate your e-commerce stores and tools
Connect your e-commerce website to the warehousing service — the WMS software can help determine stock availability and fix a reordering point in advance so that you can avoid stock shortage.
Distribute your inventory
Using a network of fulfilment centres can reduce shipping costs and ensure faster delivery. A 3PL service with multiple fulfilment centres in different locations can help you reach a wider customer base too.
Test multiple picking systems
For businesses that need to fulfil only a few orders a day, the picking process of ‘one at a time’ could work. However, businesses that see a large quantum of orders might need a more organised system to avoid time wastage. Using software to auto-generate picking lists based on proximity in the ordered item’s delivery address is one way to smoothen this process.
Set minimum inventory points
Balancing inventory requirements can be tricky because too much inventory can raise storage costs and too little inventory can lead to a shortage and loss in sales. Using inventory reports provided by warehousing service providers, it is possible to set fixed inventory and reorder points.
SDR Logistics is a 3PL service provider that can provide you with state-of-the-art e-commerce warehousing. It includes optimising the use of warehouse management software and inventory management. We can also facilitate smooth reverse logistics processes for returns or exchanges and offer value-added services like customised packing of orders to ensure a smooth customer experience.