Here are some stats from 2021 that really make you rethink your e-commerce storage capabilities — Data from this year anticipate a 27.6% increase in e-commerce sales. A Harvard Business Review article: “Business leaders are scrambling to adjust to a world that few imagined possible,” e-commerce is shaking the foundations of normal retail and taking the market by storm. By the end of 2021, the market is expected to total over $4.89 trillion. Latin America saw a growth of over 36%, Singapore by 71%, and in the US the market ballooned and continues to do so at a steady clip of 32% yearly. Is your supply chain ready for that shift? Is it feeling the pressure? In this article, we’re going to talk to you about automation and how a quick investment can spark your efficiency and help your e-commerce warehouse business meet the growing demands of the market and the industry’s bright future.
Table of Contents
E-commerce storage or warehousing is the process by which a business stores goods that are being specifically sold online. Businesses will not only have to deal with the rigors of traditional warehousing such as keeping track of orders and equipment; monitoring each process; managing contacts and employees but other key challenges inherent to e-commerce.
Many businesses are either switching to e-commerce or are doing a side-hustle and implementing a new venture. It’s a massive market and consumers are spending a lot of money on e-commerce right now. Nonetheless, running an e-commerce warehouse comes with a few challenges — issues that make it different from traditional warehouse management.
Some e-commerce businesses, just starting, have a habit of stumbling into the same pitfall, they use traditional warehouse solutions and tools for their storage requirements. They figure that infrastructure will work splendidly for them. Why? It involves, on paper, the same process — an order comes in and a product goes out. In practice, things aren’t as cut and dry.
E-commerce warehouse systems have specific demands such as the amount of space actually needed, automation services requirement, the number of orders received, and stock fluctuation.
Whether it’s a public warehouse, a private warehouse, a government-owned warehouse, a consolidated warehouse, or any in-between, most storage spaces require a couple of things based on how e-commerce operates.
In a traditional warehouse, an order comes in and it’s most likely filled at a specified time and if possible in bulk.
In e-commerce storage orders come in 24/7 all year long. An efficient e-commerce warehouse doesn’t take the night off. It keeps piling in orders while your foreman sleeps. Around 80% of those orders are single items. Most traditional systems mainly deal with pallets, racks, and large equipment meant to move several products at once. You’ll need an efficient e-commerce warehouse business system that can fulfill large volumes of SINGLE item orders — systems that can pick the right unique item, and find the quickest route for its processing. Also, most of those items are fragile, and some are incredibly expensive and small.
You will also have more demand fluctuations. Demand fluctuations that aren’t seasonal. For example, let’s say you’re working with a client that sells electronics, you’ll not only have to deal with scheduled events – like Black Friday or Christmas – but promotional sales rush that are personal to their business model. And, in some cases, some that are outside their purview. Demands changes in e-commerce happen overnight.
Finally, you’ll have to handle more returns. 43% of e-commerce products are shipped back for a refund or product exchange.
The key to having an efficient e-commerce storage business is by first letting go of the idea that a traditional warehouse model is the way to go. You might have a warehouse already, but that doesn’t mean its configuration will adapt to your new venture/model.
The second and far more practical tip is simple and can be summed up in one word — AUTOMATION.
You’ll need to streamline your operation so it can handle most tasks without the need for operators, overseers, and pesky human interference. Why? Your business will be functioning all day long, even at nighttime and on the weekends. It will need to handle small items, small shipments, and high volumes of return — and your consumer has become accustomed to Amazon’s benchmarks, where everything more or less works perfectly.
Automated warehouse management systems (WMS) are really changing the landscape and making most e-commerce businesses far more competitive.
Amongst the feature of a standalone in-house or a cloud-based system you can find the following benefits:
And finally, systems like ERP – Enterprise Resource Planning – not only integrate all your warehouse tools so they work in sync but also link you to other departments within your corporation. They allow you to fully automate your platform, connecting sectors like marketing, planning, accounting, finance, sales, customer feedback, and dozens more.
It’s a gamble deciding which system to implement. Each has its pros and its cons. Some are more elastic and innovative, while others are more simple and intuitive. It’s important to consult a specialist. One that can guide you through the process, suggest to you a system that gives you a great ROI, and, more importantly, a model that can be scaled up in a couple of years so it meets the challenges of your constantly growing business.
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