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An Ecommerce Seller’s Guide To Warehousing Solutions & Logistics
What is Warehousing? Warehousing Solutions and Logistics Explained
Key Points:
- Warehousing is a process of safely storing a business' physical inventory. It can be used to stockpile items in anticipation of future demand, store products waiting to be shipped, or keep excess inventory that isn't moving as quickly as desired.
- The warehousing market is predicted to grow at a compound annual growth rate of 7% from 2018 to 2023.
- Warehousing logistics involves everything from the processes, personnel, and systems used to move products through the warehouse. Effective warehouse management can save time, reduce costs, and ensure the timely delivery of products and services.
- The supply chain is undergoing transformation to improve the speed of order fulfilment, with warehousing logistics playing a crucial role. Goods are typically shipped from the manufacturer to a warehouse for storage and handling.
- Fulfilment warehouses efficiently pick, pack, and ship orders directly to customers, either managed by the retailer or outsourced to a third-party logistics company.
Introduction
If you work in the e-commerce industry, whether as a delivery manager or a small business owner selling products online, you're probably already aware of the term "warehousing."
Some claim that the origin dates back to ancient Egypt, where crops were stored in warehouses. Others assert that the term "warehouse" was first used in Great Britain in the early 1300s.
Regardless of where it came from, the concept in today's digital age is far more complex than it once was. The mere thought of high rental fees, maintenance costs, and complex setup processes can be enough to discourage many entrepreneurs from considering warehousing as an option for their business.
However, with a thorough understanding of how it works and what solutions are available, you can decide to warehouse safely while meeting your business needs and saving money.
In this article, you will uncover everything you need to know about warehousing solutions and the crucial role of logistics. We will delve into what warehousing is, why it's important for sellers, the different types of warehouses available on the market, and tips for choosing the right one for your business. So get ready to expand your knowledge of warehousing and elevate your e-commerce game!
What is Warehousing?
Simply put, warehousing is the process of safeguarding a business' physical inventory. They are the perfect solution for enterprises that need to stockpile items in anticipation of future demand, store products that are waiting to be shipped, or even keep excess inventory that isn't moving as quickly as expected.
Consider an online store that sells various drinks, such as juices, sodas, teas, and coffee. The store has just received a large shipment of these drinks and needs to find a secure and efficient way to store them. This is where warehousing comes in. The beverage company can use a warehousing facility to safely store its inventory until it is ready to be shipped to customers.
In addition, the warehousing facility can also provide efficient order fulfilment services, allowing the online store to quickly and easily fulfil customer orders without having to worry about storing and handling the drinks themselves.
With the continued growth of e-commerce, the demand for warehousing solutions will only increase. As per Statista, the UK e-commerce market is estimated to reach £168.70 billion by 2023, having doubled in the last decade. With the COVID-19 pandemic catalysing a change in consumer behaviour towards online shopping, the warehousing market is predicted to expand at a compound annual growth rate of 7% from 2018 to 2023.
Storage Facilities vs Warehousing
Thinking of warehousing and storage as one and the same is like comparing apples to oranges. Sure, they may both involve storing goods, but that's where the similarities end.
Warehousing is the adrenaline fueled world of commerce, where products are constantly moving, and the atmosphere is high-volume and fast-paced. It's a place to keep your goods safe and a strategic hub for selling them too.
The Three Components of Warehousing Logistics
Warehousing logistics involves everything from the processes, personnel, and systems used to move products through the warehouse. With proper management, a warehouse can save time, minimise costs, and ensure the timely delivery of products and services.
Warehouse Management
Warehouse management entails the daily management of operations in the warehouse with a strategic approach, ensuring the highest quality standard. This involves overseeing inventory, staff, security, and safety and maintaining good supplier relationships. The primary tasks of warehouse management include:
- Managing labour and merchandise.
- Providing safety equipment.
- Obtaining proper certificates and licences for staff that operate the equipment.
- Managing operations effectively when the company expands in complexity.
- Giving clear information on how to receive, unload, retrieve, and ship packages
- Keeping track of all outward and inbound shipments.
Warehouse Operations
The objective of warehouse operations is to effectively track inventory and goods, receive inventory, manage stock-keeping units (SKUs), and ship products. If done properly, it can help to:
- Lower overall costs
- Improve productivity
- Manage real-time inventory
- Boost customer satisfaction
- Maintain stock in hand
Warehouse Management System
A warehouse management system (WMS) is a sophisticated software solution designed to manage and monitor inventory in a warehouse effectively. It offers numerous benefits, including generating optimised electronic picking lists based on the proximity of stored inventory to minimise inefficiencies.
We at Bezos offer an innovative online warehouse management platform that streamlines the entire fulfilment process. From when an order is placed to when it is delivered to your customer, we take care of everything.
Our platform integrates with all major e-commerce platforms, making the process seamless for you and your customers. With a network of fulfilment centres and logistic partners, we can always support your business as it grows. And the best part?
We assign a dedicated account manager who will be with you every step of the way, ensuring that your warehousing needs are met and exceed your expectations. Our fulfilment centres in the UK, Germany, France, and Spain allow us to work with e-Commerce sellers worldwide. Get a free quote today!
Behind the Scenes of Warehousing: How Does it Work?
The supply chain is transforming to increase the speed of order fulfilment, with warehousing logistics playing a crucial role. Goods are typically shipped from the manufacturer to a warehouse for storage and further handling.
Fulfilment warehouses perform not only storage but also the efficient picking, packing, and shipping of orders directly to customers. This process can be managed by the retailer or outsourced to a third-party logistics company, which provides fulfilment services to multiple companies. It involves a straightforward process, with clear and defined steps that ensure your products' safety and efficient handling. The four steps include:
- Step 1: Receiving Inventory: The adventure begins as your products arrive at the warehouse, ready to be stored and shelved.
- Step 2: Storing Inventory: Your goods are then organised and carefully placed in designated areas tailored to your needs.
- Step 3: Picking and Packing: When an order comes in, the warehouse team springs into action, carefully selecting and packing your products with precision. With cutting-edge tools and machines, accuracy is guaranteed.
- Step 4: Shipping: Finally, when everything is ready, your products are shipped to the customer, making their way to their final destination in no time. Whether you use your own transportation or opt for a trusted trucking service, you can be confident that your items are in good hands.
It's that simple! With a warehouse service to lean on, you'll be able to quickly and easily fulfil orders while ensuring that your products are handled with care.
5 warehousing logistics solutions your business needs
At Bezos, we specialise in providing comprehensive warehousing and logistics solutions to e-commerce companies. Our goal is to make the process of running an online store as smooth and efficient as possible. Here are five warehousing logistics solutions for your business.
1. Warehouse
The stereotype of a warehouse being a gloomy and dingy place with rows of dusty shelves is far from the truth. In reality, warehouses are well-lit, clean, and equipped with cutting-edge technology.
The impact of Brexit and the ongoing pandemic has resulted in a significant departure of EU nationals from the UK's logistics industry, making automation a critical aspect.
In 2020, the UK's warehouse automation market was valued at over 1.3 billion US dollars, and this figure has doubled to reach 2.05 billion US dollars in 2022, as reported by Statista.
A study by the Cambridgeshire Chambers of Commerce revealed that the UK is home to over 1,500 individual warehouse units, totalling approximately 424 million square feet of storage and distribution space. These facilities are diverse, ranging from standalone structures to part of larger complexes.
The four main types of warehouses are below:
- Private Warehouses ( Best for full control): These facilities are typically owned by a single manufacturer or larger companies to store and ship their products. They are also known as proprietary warehousing and can be run by a dedicated team within the company.
- Public Warehouses ( Best for small businesses): Public warehousing services are offered by companies that provide storage solutions to various businesses monthly, whether for short or long-term needs. They offer storage, inventory management, warehousing administration, and freight forwarding. Essentially, it is a commercial space that can be rented.
- Co-operative Warehouses ( Best for start-ups): These warehouses are owned by cooperative societies responsible for management and control. These societies provide affordable storage spaces to their members at cost-friendly prices, focusing on serving the community rather than maximising profits.
- Distribution Centers ( Best for fast inventory turnover ): These are specialised storage spaces equipped with refrigeration and air conditioning, primarily designed for short-term storage and rapid inventory turnover. They are ideal for receiving goods and distributing them promptly based on received orders.
2. Inventory Management
It helps you monitor your inventory levels in real time, making it easier to determine when and where products need to be purchased. This also saves you money on unnecessary buys and reduces the time you have to spend on administrative tasks.
3. Order fulfilment
It encompasses all activities that occur at a fulfilment centre. This includes storing goods, tracking inventory, selecting and packaging products, labelling boxes, shipping orders, and managing returns. It is a comprehensive process that requires careful management to ensure efficient and effective delivery to customers.
4. Distribution
From shelves to store windows, your business needs a reliable distribution system to get your products to the people who matter most - your customers.
Outsourcing fulfilment to a third-party logistics provider (3PL) can alleviate the burden of managing distribution tasks. 3PLs specialise in storing, replenishing, and efficiently delivering orders, allowing merchants to focus on growing their brand and running their business without worrying about warehouse space or packing boxes. Bezos is a prime example of a one-stop solution for order fulfilment, warehousing, and distribution services.
When you self-fulfil orders, you are the one who stores inventory (either in your home or by renting space), and you pack orders and make trips to the post office or shipping carrier. If you keep these functions in-house as you grow, you will either need to outsource order fulfilment or invest in the team, equipment, facility, liability insurance, workers comp, etc.
5. Self-fulfilment
Self-fulfiling orders involve storing inventory, packaging products, and delivering them to the shipping carrier or post office. This method is ideal for small businesses just starting out.
However, as a business grows, outsourcing order fulfilment to a third-party logistics provider may become necessary to accommodate increased demand and streamline operations.
Factors to Consider When Choosing a Warehousing Solution
Choosing the right warehouse solution can mean the difference between your company's success and failure. To help ensure you find the solution best suited to your needs, we've compiled a list of key considerations you should keep in mind.
Number of SKUs
Maintaining an accurate and efficient inventory system is crucial for the success of any business. The Stock Keeping Unit (SKU) plays a key role by serving as a unique identifier for each product. You can effectively calculate storage fees and determine the necessary warehouse space by keeping track of the number of SKUs.
For businesses with high demand and quick inventory turnover, it is advisable to restock promptly and avoid high logistics and storage costs. In this case, a self-managed warehouse solution may be best.
However, for businesses with lower sales volume and large amounts of inventory, opting for a warehousing service that includes storage and distribution can ease the burden. This way, you can enjoy the convenience of a single service subscription without worrying about separate fees for each aspect of inventory management.
Seasonality of Your Business
The demand for a product can be affected by various factors, including seasonal fluctuations. Leasing a warehouse can be extremely expensive if your sales vary according to the season or throughout specific months. You may also face a shortage during the peak season if your inventory is not managed properly.
Therefore, handing your warehousing and logistics to a trustworthy partner like Bezos can help you avoid these difficulties and focus on your core business. We will manage the whole process from beginning to end and ensure that everything runs smoothly. Start saving now!
Warehouse Location
As a business owner, providing your customers with fast and reliable delivery is crucial to their satisfaction. By choosing a warehousing solution in an urban or metropolitan area, you can tap into the potential of expedited shipping and delight your customers with quick turnaround times.
However, simply choosing a popular city is not enough. It's important to take a data-driven approach and assess where most of your orders come from. You can minimise travel distance and optimise delivery times by strategically selecting a central location.
Technology Used in Warehouse Management
Regardless of the route you take, whether you outsource your storage or handle it yourself, keeping your business up and running at the same level can be incredibly difficult without cutting-edge technology.
If you are still confused, we recommend consulting with a professional logistics platform like ours. We at Bezos can help you analyse your needs and determine the best option for your business. We believe every business deserves access to top-notch logistics services, regardless of size. That's why we offer a one-stop solution where we do everything from storing, picking, and packing to delivering online orders. And what's amazing is that there is no lengthy signup process. You can get up and running within 72 hours.
Bid farewell to the hassle and expense of managing your own warehouse. Let us handle the warehousing and logistics so you can expand your business. Get a free quote today!
Conclusion
The importance of warehousing in the e-commerce landscape cannot be overstated. By exploring the options mentioned in this article and choosing the right solution for your business, you can take control of your inventory, streamline your operations, and provide a top-notch customer experience. And with a little support from a partner like Bezos, you'll be well on your way to a successful e-commerce future.
FAQs
What is the definition of warehousing?
Warehousing is the process of storing goods in a controlled and organized environment to reduce the amount of storage space required and to make it possible to retrieve items quickly and easily.
What are the benefits of warehousing?
The advantages of warehousing differ based on the type of warehouse chosen and the size of the organisation. However, some common advantages include reduced inventory expenses, cheaper logistical costs, better customer service, and higher profits.
What is the most important thing in a warehouse?
The most important thing in a warehouse is orderliness and accuracy. This is why it is important to have a system that ensures the correct items are sent to the correct locations at the correct times, which can be achieved using a warehouse management system (WMS).
References
https://www.hopstack.io/blog/evolution-warehousing-systems-history-timelines
https://www.statista.com/outlook/dmo/ecommerce/united-kingdom?currency=GBP
https://www.researchandmarkets.com/reports/5572909/united-kingdom-warehousing-and-distribution
https://www.statista.com/statistics/1288537/warehouse-automation-market-size-united-kingdom/
https://www.cambridgeshirechamber.co.uk/downloadlibrary/UKWA%20Savills.pdf
