Running an e-commerce business is a huge logistical challenge, and you need a dependable logistics operation. A provider that understands the market, with broad enough abilities to move your products from the supplier to the warehouse and back out to your customers. In fact, the lynch pin of a successful logistics operation is quality e-commerce warehousing.
By storing your products in a centralised warehouse location, you can save money on shipping costs and reduce the delivery times for your customers. E-commerce warehousing offers specialised logistics and storage for online shopping. In this blog post, we’ll show how warehousing for e-commerce differs from other types of warehousing, exploring best practices and sector-specific challenges.
What is E-commerce Warehousing
While traditional warehousing stores products destined for a bricks-and-mortar retail store, e-commerce warehousing is more complex. Also called fulfilment centres, e-commerce warehouses organise stock to streamline individual order picking. They need to sort products according to customer orders, often selecting disparate items and packing them together for delivery.
At LTS, our flexible e-commerce solutions use cutting-edge technology to provide clients an overview of the whole fulfilment package. We are also a registered fulfilment house under HMRC’s Fulfilment House Due Diligence Scheme, which means we meet the highest standards of operational and tax compliance for storing goods imported by non-UK sellers.
The Impact of Warehousing for E-commerce Growth
By having streamlined warehousing and fulfilment practices, e-commerce retailers can improve customer satisfaction. Smooth delivery and returns processes have a direct impact on returning customers and often lead to more recommendations.
In this way, proper warehousing can help grow your e-commerce business beyond drop-shipping or self-storage. Read on to understand best practices for e-commerce warehousing
Best Practices of E-commerce Warehousing
Storage and Inventory Management
Safe, secure and organised storage is essential for your inventory. A quality warehousing provider will offer a variety of storage options for your products, including racking and bulk storage.
Providers should also offer access to inventory management software. This gives you oversight of stock levels, generates pick lists from your orders and helps manage packing, labelling, shipping and tracking. Software also helps notify you when stock levels are low or when perishable items are at risk of spoiling.
Picking and Packing
Picking and packing refers to the order fulfilment technique in which items are picked from their storage locations and packed for delivery in quick succession.
By organising your stock effectively, e-commerce warehousing suppliers can streamline order picking. This might include segmenting inventory so finding the correct item is quick and easy, grouping the top ordered products together to cut travel times, or picking straight into the packing box to reduce handling.
Ability to Handle Specific Goods
Choose warehousing that can manage the storage needs of your product. For example, ambient storage and food warehousing is available from LTS, along with other types of storage. Your storage provider should be aware of the types of goods you are storing, whether it’s fragile glassware or heavy, palletised goods. Make sure you choose the correct storage type for your products.
Flexibility
It’s best if your e-commerce warehousing provider can adjust to your changing business needs. You might have seasonal peaks and troughs that mean you need more or less storage at certain times of year, or you may need to rapidly grow if your products ‘go viral’.
What works for one company might not work for another. Plus, there’s always the possibility of a supply chain disruption or other crisis. That’s why it’s important to have a warehousing and logistics provider that can be flexible in the face of adversity and can tailor a solution to your specific needs.
Security
Warehousing for e-commerce should provide a secure off-site location for businesses to store their inventory. Make sure your logistics partner is equipped with the important security features to keep your goods safe, such as CCTV cameras, motion detectors and security guards who patrol the premises. Also, look for online order tracking systems that let you keep an eye on your shipments.
How to Choose the Best Location for Your E-commerce Warehouse
Choose warehouses within easy reach of your core customers, or if you supply nationwide, major road networks and carrier hubs. Central locations such as the Midlands are ideal, as travel times are generally within a few hours.
By choosing warehousing in strategic locations, you can offer faster delivery than competitors and lower last-mile costs. LTS has ideal warehousing locations near Birmingham, with easy access to the central motorways.
Different Types of Warehousing for Ecommerce
There are several different types of warehouses used for e-commerce fulfilment. Some providers may combine styles to offer flexible services, so we will summarise here so you can easily discern between them.
Consolidated Warehouses
Consolidated warehouses store goods for multiple businesses and vendors, sharing the costs of space, labour, software and equipment. Picking and packing processes are kept separate to avoid errors, but by combining their storage, businesses benefit from economies of scale that improve efficiency and reduce costs.
Bonded Warehouses
For goods that are imported, due to be exported, or require higher rates of VAT (such as alcoholic beverages), bonded warehouses act as duty-free zones. They require high security, as goods can’t leave the warehouse until duty and VAT are paid.
Climate-Controlled Warehouses
For temperature-sensitive products such as food and pharmaceuticals, these warehouses can maintain consistent temperatures and humidity levels. This keeps products fresher for longer so they can arrive with customers in good condition.
Smart Warehouses
Using barcode scanners, software and automated machinery, including autonomous mobile robots, smart warehouses optimise processes to reduce walking time and manual tasks. With the right setup, smart warehouses can operate around the clock with minimal human intervention.
Overcoming Challenges in E-commerce Warehousing
As with all areas of logistics, warehousing providers and e-commerce business owners need to respond quickly to challenges to avoid compounding issues and knock-on effects.
- Sudden spikes in order volumes can put strain on resources and increase the likelihood of errors. Keeping reserve stock or hiring more help can overcome peak demand, especially if it is seasonal.
- Tracking errors such as inaccurate stock counts may lead to missed sales or overselling. Vigilant stock checks and updates are key to avoiding this.
- Labour shortages can be overcome with strong recruitment campaigns and automation.
- Poor stock visibility increases workload for business owners and warehouse operators, so a quality warehouse management system is beneficial for both parties.
- Higher return rates are common for e-commerce retailers, requiring effective reverse logistics to handle the flow of returned items.
Choosing the Right Warehousing Strategy for Your E-commerce Business Size
Smaller e-commerce businesses can benefit from consolidated warehousing, as they share the cost of storage, labour and tracking with other businesses. For rapidly growing companies, a warehouse with flexibility and good transport networks is a priority.
Consider your stock types to understand whether you need climate-controlled or palletised storage for bulk items.
Why Choose LTS for E-Commerce Warehousing
Choosing e-commerce warehousing can be a challenge, with such a broad range of options becoming overwhelming. Whether you’re scaling up your e-commerce business, looking for a new fulfilment provider or exploring your options, LTS has a solution to suit you.
We are a BRCGS-accredited warehousing specialist, offering personalised quotes to support all sizes of businesses. Our central location has easy access to UK motorway networks, and we pride ourselves on supporting our clients with excellent customer service. Our warehouses are completely secure and can handle a broad variety of goods.
From fulfilment and e-commerce solutions to quality control, 3PL services and full 360 fulfilment, we deliver the flexibility and efficiency your business needs to thrive.
Call us today on 0121 753 0080 or fill out our contact form to arrange a meeting.
