eCommerce Warehouse Management: Top 3 Priorities for Growth

Finding just the right ecommerce warehousing solution to stand up to customer expectations for  1 to 2-day delivery is one of the most important decisions an ecommerce seller will make for their business. 

Many merchants find that the demands of building a fully in-house ecommerce warehousing solution is a drain on internal resources that is ultimately less efficient than an outsourced warehousing model. In fact, a merchant survey revealed that merchants who outsource their fulfillment find that their overall management scope is simplified, their warehousing and fulfillment costs are reduced, and their top-line revenue is increased.

Ahead, we’ve laid out three top priorities all merchants should set for their ecommerce warehousing management to grow their business quickly and sustainably.

1. A Fully Integrated eCommerce Warehouse Management System

Digital sales channels move fast, and your fulfillment solution needs to move just as fast to keep up with demand. You need the ability to launch a promotion or aggressive marketing campaign without worrying about building up a backlog of unfulfilled orders and disappointed customers. The key to effective ecommerce warehouse management is automation, and automation is powered by integration.

Choose a fulfillment partner with a direct integration with your ecommerce shopping cart. automate as many functions as possible, saving time and ultimately increasing customer satisfaction with accurate and fast fulfillment. An ecommerce warehousing integration should automate at least the following functions:

• Order Management: As soon as a customer places an order it should be automatically routed to your fulfillment provider. Manually checking your Shopify account, creating labels, and uploading orders to your fulfillment platform is an unnecessary time-suck. Automated order management not only saves you time but ensures that the warehouse gets your order as quickly as possible for same day or next day fulfillment. 
• eCommerce Warehouse Location: You shopping cart integration should automatically match an order to the ecommerce warehouse location closest to the order’s delivery address to ensure fast shipping promises are met as efficiently and inexpensively as possible.
• Delivery Tracking: Consumer expectations for delivery tracking are higher than ever, with 93% of consumers checking the delivery status of their package at least once while it’s in transit and 40% of consumers admitting to checking delivery tracking at least once per day. With this level of interaction, delivery tracking must be automated with tracking numbers syncing automatically from your ecommerce warehouse platform to your ecommerce store.
• Inventory Management: You should never have to wonder if your ecommerce store has up-to-date inventory levels. Your ecommerce warehousing integration should automatically and regularly update inventory at your storefront so you’re not switching back forth between portals reconciling inventory. Automating this process also helps avoid stockouts and backorders which can lead to frustrating customer experiences.

Integration points should go beyond simply connecting a single shopping cart to your ecommerce warehousing solution because a truly scalable ecommerce business model is multichannel. A fully integrated solution will tie all sales channels together, from ecommerce to wholesale, with a single platform. A single platform view of all channels and all warehouse locations gives you full visibility and allows you to make strategic decisions like exposing more inventory for increased sales on your most profitable channels.

2. A Distributed eCommerce Warehousing Network

There are a few main types of ecommerce warehouses, and the first step to building a distributed network is determining which type of warehouse will best suit your customer and product needs.

• On Demand Warehousing: This refers to a fulfillment model based on partnerships between warehouses looking for new inbounding merchants and an on demand warehousing provider with a roster of merchants in need of affordable warehouse space and premium SLA’s.
• Fulfillment Center: This term can refer to an on demand warehouse and may sometimes be used when referring to a 3PL. A fulfillment center is more than a warehouse for storing inventory but also offers pick, pack, and shipping services.
• Dropshipping Provider: Dropshipping is often handled directly through the product manufacturer but can also be negotiated with a wholesaler. Rather than purchasing and storing inventory, sellers purchase items from their dropshipping provider on a per-sale basis, and the manufacturer or wholesaler ships the item directly to the customer. This is a technique sometimes used to test into a new product line but isn’t a sustainable model for high growth.

Customer expectations for ecommerce orders is 1 to 2-day shipping, regardless of the merchants’ size. In fact, a recent survey showed that consumers actually expect faster shipping from small to mid-sized retailers.

The most efficient way to make 1 to 2-day shipping affordable for SMB’s is forward-stocking inventory as close as possible to the end customer, eliminating costly next-day air and long-zone shipments. This requires a greater upfront investment in inventory to stock multiple ecommerce warehouses, but the impacts of offering fast shipping ultimately increase both top-line and bottom-line revenue, far outweighing the additional inventory costs.

1 to 2-day shipping promises advertised early in the customer journey, as with Google Free & Fast shipping annotations have been shown to improve top of funnel conversions by 9%, and a 2020 merchant survey indicated that offering 1 to 2-day shipping options at checkout increased cart conversions by up to 25%. In the same survey 59% of merchants reported more repeat customers, and 39% reported better online reviews when 2-day shipping was offered. To see how extending your 1 to 2-day delivery network could increase revenue and lower delivery costs for your business, try our free network analysis tool.

3. A Flexible eCommerce Warehouse Network

A major benefit of digital sales channels is their flexibility. They can easily be turned on or off in response to changes in demand, and as the seller you can choose to target more profitable geographies with marketing and promotions. 

To take full advantage of this flexibility, you must have an ecommerce warehouse network equally flexible to pivot with demand. There are three distinct ways that eCommerce demand could shift, and it’s important that your ecommerce warehouse management system is able to support any of these three shifts.

• Geography: As your market share increases, your customer profile will inevitably shift. As you discover new pockets of demand, you need the flexibility to move your inventory close to these new customer bases to keep service levels consistent while controlling your cost to serve.
• Volume: Many businesses experience regular seasonal demand changes, and a qualified ecommerce warehousing partner will have flexible agreements to accommodate these shifts. You should be able to pay for only the space and labor you need when you need them, and you shouldn’t be paying increased rates during the holiday season or committing to your highest seasonal rate for the entire year. 
• Customer Type: 2020’s spike in ecommerce sales meant a dramatic shift in order mix from a mix of small parcel, full pallet, and LTL shipments to a heavy reliance on small parcel (residential) shipments. Merchants with flexible partnerships in place that could accommodate any order type or transit mode ultimately won when demand shifted suddenly. Flexibility creates supply chain resilience in the face market disruptions.

To learn more about how Ware2Go is simplifying ecommerce warehouse management for merchants of all sizes, reach out to one of our fulfillment experts.