The coronavirus pandemic has destroyed brick-and-mortar retail, but ecommerce has not suffered the same devastation. In 2020, the global ecommerce market grew by 16.5%, with all major world regions seeing growth.
With more of us staying home going into 2021, ecommerce is going to continue to boom. For new operations, however, thoughts turn to more practical concerns. Selecting the right warehouse for storing your brand’s inventory could make or break your business.
Your warehouse provider must offer speed, diligence, and protection for all your products. Keep these seven things in mind when selecting a warehouse provider.
How Many SKUs Do You Need?
The U.S. market is experiencing a shortage of warehouse space. It is estimated that an extra billion square feet of space could be needed, due to the increase in ecommerce.
Warehouses use a unit called SKUs to track inventory, estimate the amount of space needed, and how much to charge. The chances are you do not require thousands of SKUs, but it is a good idea to look into how warehouses are going to charge you so you can make the most cost-effective decision.
Check whether the warehouse charges per SKU or the per foot storage rate as this can make a big difference. For ecommerce businesses, they may even charge by the pallet, bin, or shelf.
Which Products Do You Sell?
Certain warehouses specialize in specific types of products, such as food or dairy products. Others will refuse to store anything flammable, such as alcohol. On the other hand, some warehouses will specialize in handling fragile products, such as glassware.
Research different warehousing solutions to ensure you are getting the facilities you need to handle your more specialized products. For diverse ecommerce stores, you may even need to use multiple warehousing solutions.
Do You Need Additional Value-Added Services?
Certain types of ecommerce businesses can benefit from combining their services as part of their warehousing solutions. Many warehouses offer additional value-added services.
These can include product labeling, packaging, assembly of products, and order fulfillment. For ecommerce business owners who want to outsource most of their processes, a warehousing solution offering these value-added services can be invaluable.
Is Your Warehouse Using Automation Technology?
An increasing number of warehouses have used the pandemic to upgrade their facilities using automation technology. This allows them to increase capacity, increase speed, and limit mistakes with inventory and orders.
Find out more about whether your warehousing solution is implementing automation technology as part of their offerings. Automated conveyor systems and artificial intelligence are just some of the automation solutions warehouses are increasingly investing in to better meet the needs of their customers.
Think About Seasonality
Many ecommerce goods are seasonal. For example, you may be selling winter coats and blankets. It is usually better to opt for public warehouses, in this case. They offer short-term storage services. Opting for contract warehouses is ideal for long-term needs, but if your goods are seasonal you are essentially paying for what you do not need.
Think about your inventory and when you make most of your sales. If your ecommerce business is seasonal, this will influence your choice of warehouse.
Location of the Warehouse
Normally, ecommerce businesses do not have to worry about location because they can deal with customers all over the world. When it comes to warehousing, location matters.
Warehouses in rural areas may be cheaper, but they tend to be slower at fulfillment, due to the distance from major transport hubs. On the other hand, big city warehouses often come with more services and can offer faster fulfillment.
Smaller businesses may want to consider utilizing a warehouse closer to their target market, or in a rural area where services are more affordable. Larger ecommerce businesses should prioritize speed, capacity, and value-added services.
Fulfillment Software Options
Any modern warehousing solution should offer fulfillment software to help you track current inventory and shipments.
Software is essential because you need to be able to track what is going on in your warehouse remotely. Ideally, it should also provide automation options.
For example, when a customer places an order that order should automatically be rerouted to the warehouse to facilitate quick shipments.
Ecommerce business owners are advised to ensure their warehousing solution allows them to connect their warehousing solution with their sales channels.
The most modern warehouses enable real-time tracking, so you know what is going on across your entire supply chain at any time of the day or night.
Conclusion
Selecting a warehouse for your ecommerce store can be complicated for entrepreneurs who have never used them before. With so many considerations, it is vital that you do your research and pay special attention to what their past customers have had to say.
What are your main priorities when deciding on a warehousing solution?