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Zyro encyclopedia

Learn about online business

Zyro Glossary eCommerce

Warehousing

What is warehousing?

Warehousing in its most basic form is the storage of goods. 

In an eCommerce context, warehousing is where you store items ahead of their being purchased online, instead of being displayed in physical retail locations. 

The word “warehouse” might bring to mind huge buildings filled with millions of dollars worth of goods, but in reality “warehousing” refers to any form of storage. 

This means that even mom and pop companies operating out of a domestic garage should still think about best practices when it comes to warehouse management. 

You will probably be surprised by how many aspects of your businesses rely on good warehouse planning. 

Why is warehousing important?

How you store and process your inventory has repercussions in many parts of our business. 

It’s obvious that ensuring that your stock remains safe and secure is one of the primary functions of warehousing. 

However, you’ll come to realize that warehouse operations affect things like how quickly you can fulfill orders, how you track inventory, and in what condition products arrive to customers. 

Good warehouse management adds value to your operation by ensuring orders are fulfilled efficiently and your products are kept in prime condition. 

The main functions of warehousing

Beyond simply being storage facilities to keep products before they’re sold, effective warehouse logistics include:

Receiving goods

Receiving wholesale and manufacturer goods for preparation before shipment to customers is the first task in the supply chain.

Inventory must be unloaded, checked, cataloged, and taken to the correct area of the warehouse for storage.  

Receiving in a warehouse also has to include the receiving of returned products that did not satisfy the customer. These will need to be checked, possibly cleaned, and stored for re-selling.

Final assembly, preparation and packaging

While many warehouses function simply as distribution centers, others may have a bigger role in the supply chain and order fulfillment. 

These fulfillment warehouses might be expected to put the final pieces into place before a product is shipped. 

It may be the case that the customer is expecting multiple items in a single package, or that the goods need to be physically assembled before shipping. 

This is all part of normal warehouse operations.

Storing inventory

This is the aspect that everyone is familiar with, but which has some features that you might not expect. 

For instance, many goods need to be stored at a specific temperature or humidity to avoid damage. Climate control is a central part of most warehouse management systems. 

Storage warehousing is also responsible for ensuring that items are easily found when a customer orders them. Efficient storage and good record keeping are absolutely essential. 

Shipping orders to customers

Warehouse operations are the last people at your company who will handle products before they are shipped to your customers. 

Shipping goods from a distribution center includes: locating and retrieving inventory in the warehouse, conducting a final quality check, boxing in adequate packaging, and shipping out to the correct address. 

5 benefits of warehousing your eCommerce products

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1. Better time management and efficiency

For companies of all sizes, one fact holds true: the only non-renewable resource is time. 

Time spent hunting through a storage warehouse for the right products to fulfill an order is time wasted. Time wasted is money down the drain. 

Orderly warehouse logistics and inventory management means freeing up time. This means your warehouse staff can fulfill more orders, or expand their roles to be useful in other parts of your business. 

2. Faster shipments

It might be a hard pill to swallow, but we’re living in the world of Amazon Prime, and customers are expecting their parcels faster and at lower costs than ever before. 

If you’re a company that sells online and ships to customers throughout the country or world, you need to rise to the challenge of speedy delivery. Warehouse planning should be at the heart of your strategy. 

You can plan to have inventory at distribution centers across the country, meaning that when a customer purchases goods, order fulfillment can be handled by the distribution center closest to their address. 

Your warehouse logistics staff will also have the opportunity to build good working relationships with regional delivery companies, making the delivery process more synergistic. 

3. Control over your eCommerce business’ inventory

Products being mislabeled, lost, or incorrectly tracked can not only cost you time and money, but can harm your brand’s public profile too, if it becomes a habit. 

This is where the right warehouse management system comes into its own. Rather than haphazardly tossing inventory into the black hole of a storage room, companies with solid warehouse logistics and planning know exactly where every product is at any given time. 

This kind of tracking and control not only ensures that goods leave your warehouse correctly, but that your warehouse staff can proactively reorder items which are running low in stock 

4. Optimization of inventory management

Speaking of proactively restocking, let’s talk briefly about how much inventory you need to keep warehoused. 

Of course, you always want enough stock on hand that you’ll be able to fulfill any order that comes in. However, you also don’t want to be storing too much inventory, given that you’ll be paying for every inch of warehouse space. 

This is why warehouse management should be an integral part of your business, with links to everything from sales channels to customer service. 

This way you can maintain the equilibrium that ensures orders are met and costs are kept down.

The elements of warehousing

  • The products. Of course, the most important element of any warehouse is the products being stored. All the other elements are there to handle, protect, and ship these. 
  • Storage and handling equipment. This is anything from a basic shelf to forklift trucks. They must be suitable for the job, and maintained to the highest safety standards.
  • Inventory management system. As alluded to before, you’ll need to have a solid computer system that’s integrated with all other parts of your business. 
  • Environmental controls. When your operation grows, you’ll need to start thinking about the temperature and humidity at which you’re storing your inventory. 
  • Shipping supplies. The correct boxes, protective packaging, and the right kind of postage should all be on hand. Running out of these supplies can be a damaging oversight. 
  • Security. Fundamentally, warehouses are intended to keep your inventory safe until it’s purchased. Investing in decent security systems and personnel will pay off in the long-run. 
  • Personnel. Your people are what makes ship happen. Whether they are part of your company or working as contractors, all personnel should understand your products and processes. 

Each company’s warehousing needs and specifications will differ depending on the kinds of products being stored (including size and perishability), their sales turnover rate, where they sell geographically, what kind of shipping requirements there are, and a whole long list of other factors. 

Even if you’re just starting out as a retailer, and are pretty much operating out of a garage, you should still be planning warehousing into your current operations and growth plans. 

While a relatively small aspect of any business, the difference between a smooth-running warehouse and a warehouse where little care has been taken can mean the difference between success and failure. 

You should by now realize that warehousing s about far more than just keeping your goods in prime condition. It’s about how quickly your business moves, and the rate at which it can grow. 

With this in mind, we recommend that warehouse planning is a consideration you take into account early on in your business planning. 

Written by

Author avatar

Duncan

Duncan is obsessed with making website building and eCommerce accessible to everyone. He explains the best tools and the latest digital marketing trends in ways that are clear and engaging. His focus is on supporting the sustainable growth of small to medium-sized enterprises. When not writing, he enjoys deep sea fishing and endurance cycling.

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