Warehouse Operations in E-commerce
You might have been doing online shopping for years but you probably don’t know what happens once you are done with ordering. That’s where a warehouse comes into play. It is a place where inventories are stored by e-commerce businesses and products are dispersed for shipment.
As a beginner, one might do away with the need for a warehouse. Initially, you can utilize a garage as a warehouse. But it leads to so many inconveniences. As your e-commerce business expands, warehouses will become literally indispensable for you.
Here is how warehouses hold the key in terms of growth of your online business:
- Fast Shipment
It is particular with so many customers to check beforehand how many days you take to deliver the product. We are living in the age of millennial and they have the tendency to do things at the last minute. So many people will order things just at the eleventh hour. How you are going to tackle this challenge?
Well, the answer lies in having multiple warehouses at different locations. For example, if you have the warehouse in Washington but you have to carry the parcel all the way to San Francisco, then it will take a lot of time. In this age of doing things at a rapid pace, there can’t be any bigger turnoff for customers than this.
As a rule of thumb, if you consume more time than two business days to carry the inventory, you are in bad customer service reviews,regardless of how good your products may be.
- You can deal with the emergency situation more effectively
Sometimes emergency situations are not foreseeable. They just come to haunt you out of nowhere. For example, earthquake, storm, wildfire and so on. If your warehouses are scattered at more than one geographical location, you can somehow manage to transport the products using another warehouse.
Though, the delivery might not be as convenient but better late than never. Moreover, in the face of natural calamity, if your stock gets effected at one warehouse, you can use other warehouses to meet the supply until the recovery is made.
- Offer better organization and security of products
One of the biggest offshoots of garages is that they are not designed to stock your inventory. That’s why you have to face problems like lost items and wastage of time to look for a certain type of product which is a hurdle in the appropriate order fulfillment.
Warehouses are made especially to serve business purposes. Instead of investing your time to go through the piles of products, a warehouse can save your time which you can use somewhere else. Remember, time is money.
Besides, it is a healthy preventive measure to secure your products from theft as well. Knowing that your inventory is secure does come with peace of mind which helps you to concentrate on your business more proficiently.
- You can easily cope with increasing demand
Demand can suddenly go up. If something becomes a trend, people will literally fall flat for it and the demand can break all the records overnight. In such cases, it is observed that people don’t mind even paying more.
Warehouses keep you in a comfortable position by allowing you to stock materials in a big number. Sometimes you can anticipate that demand will increase but you have no place to stock the goods. Hence, warehouses enter the stage. Even if you have a spare inventory, even then warehouse management will look after it and you can sell it if un seasonal demand makes its way.
- Reduces costs on shipment
High shipping costs are one of the biggest reasons why people abandon online shopping carts. Of course, I have to pay more money on shipment if my parcel is coming from 500 miles instead of 100 miles.
You are left with two options, either you have to bear the shipment charges yourself (which is a bitter pill to swallow) or make the customers pay for it. It is very much apparent,there is no win-win situation here.
The customers surely won’t come close to you. It is you who have to come close to the customers by placing warehouses among your customer base. Needless to say,this is another area where having multiple warehouses could be very handy and directly add to your bottom line in the long run.
- Improved purchasing decisions
You have to take a cautious approach to buy certain raw materials because they can cost you heavily if you buy them more or less than a certain quantity. When you have warehouses where the warehouse management system is in place, you can forecast such future decisions in an appropriate way.You will have all the customer data available which will enable you to take an “educated guess” instead of “rough guess”.
Based on the purchasing history, you can also determine which product is going to be out of stock by a certain time. That way, your stock will never fail to meet the market demand. Moreover, this is a fine metric to measure the progress of your business.
- Right inventories get shipped
Picture this, a customer tears the packing of his order in all excitement just to find that a wrong parcel has been shipped to him/her.You don’t have to go through this situation to visualize the frustration. It happens and more so with the online brands operating from garages.
Every time you ship the wrong inventory, consider it a blow to your business. What’s more, the customer will have to wait for the next few days before he gets his right order. With warehouses, there is hardly any room for such blunders. Moreover, offer tracking is also efficiently done through warehouses.
- Company productivity
Warehouses can tremendously increase the overall productivity of the working place. Your employees will be able to deliver more work because everything will be fast paced. The atmosphere will be proficient and you can expect fewer errors regardless of the work burden.
Sometimes your business can be in a dire need of financing. Warehouses can make you eligible for financing too.Your warehouse can serve as collateral to the bank and therefore make it easier for you to obtain loans.
The final verdict
The list just goes on and on! Being a businessman, there are several options you can exploit – private, public and bonded warehouses. You can pick the one which goes best with you. As time slips by, online business is getting more competitive. There is no way you can grow and expand without having a network of warehouses in large cities.