When it comes to eCommerce, your warehouse isn’t just a place to store inventory, it's the heart of your operations. From fulfilling orders quickly to managing stock levels and reducing costs, every decision you make about your warehouse can either drive growth or slow you down.
This guide will show you how to set up and run an efficient ecommerce warehouse that can scale as your business grows. You'll get practical tips on warehouse layouts, choosing the best warehouse management software (WMS), and even how to leverage 3PL providers to handle your logistics. Whether you're just starting out or looking to improve your existing operations, these actionable steps will help you get the most from your warehouse.
What is Ecommerce Warehousing?
Ecommerce warehousing involves the storage, management, and distribution of inventory specifically for online businesses. It's more than just a physical location; it’s a complex system that supports fast, accurate order fulfillment. An efficient warehouse ensures your products are organized, easy to retrieve, and shipped to customers on time.
A streamlined warehouse allows you to:
Manage inventory efficiently
Reduce lead times and shipping costs
Improve customer satisfaction by ensuring products are available and shipped to customers quickly
Scale your operations to accommodate growing order volumes
We will cover all this and more in this blog today.
How to Set Up Your Own Ecommerce Warehouse
Setting up your own warehouse requires careful planning. Here’s a step-by-step guide to ensure your setup is optimized for eCommerce growth.
1. Choose the Right Location
Location matters. Ideally, your warehouse should be close to your primary market to reduce shipping costs and delivery times. Proximity to major highways or ports will also make transportation more efficient.
2. Design an Efficient Layout
Your warehouse layout should minimize travel time for staff and reduce the chances of mistakes.
Consider zones for different product categories and keep fast-moving items near the shipping area for quicker access.
3. Automate Where Possible
From barcode scanning to automated pick-and-pack systems, automation can help you speed up fulfillment and reduce human error. This is especially important if your order volumes are growing quickly.
4. Invest in Inventory Management System (IMS)
A good IMS allows you to monitor inventory levels in real time. This helps prevent stockouts, over-stocking and helps optimize reordering. With advanced IMS features, you can automate stock alerts, ensuring you’re always prepared for fluctuations in demand.
Order fulfillment is a crucial aspect of warehouse operations. Efficiency here determines your speed and accuracy. Best practices include:
Automated picking and packing: Use barcode scanning and RFID to reduce human error.
Strategic layout: Store frequently ordered products closer to the packing area.
Multi-order picking: Process multiple orders at once to increase speed.
Ecommerce players also use an order management system to simplify order processing, order picking, packing and shipping. SAP Commerce Cloud, Orderhive and Jotform are some top players in this space.
6. Invest in a Warehouse Management Software (WMS)
A powerful WMS integrates with your eCommerce platform and automates key functions, including stock control, order picking, and reporting.
An efficient WMS can help you manage multiple sales channels, track inventory across different locations, and provide data to optimize your warehouse operations.
We will cover top ecommerce warehouse management software, later in this blog.
7. Implement Quality Control
Even with automation, human checks are essential for ensuring products are packed and shipped correctly. Set up quality control stations to double-check orders before they leave the warehouse.
Best Warehouse Ecommerce Management Software (WMS)
Choosing the best ecommerce warehouse management software (WMS) is essential for streamlining your operations. Here are some of the top WMS options to consider:
1. Extensiv
Extensiv is a comprehensive 3PL software platform designed to streamline order fulfillment, inventory management, and supply chain processes. It caters to a wide range of eCommerce businesses by offering scalable solutions that grow with your brand's needs.
Key Features:
Centralized Order Management: Offers a single interface to manage orders, streamline communication, and track real-time fulfillment statuses across multiple warehouses.
Real-Time Inventory Tracking: Provides up-to-date visibility into stock levels and helps avoid stockouts or overstocking, which is critical for maintaining smooth operations.
Seamless Integrations: Works well with popular eCommerce platforms like Shopify, WooCommerce, BigCommerce, and more.
Customizable Workflows: Adapt workflows to your business needs, allowing for tailored solutions in packing, shipping, and returns management.
2. Shiphero
ShipHero is a flexible and scalable warehouse management and order fulfillment solution tailored for eCommerce businesses. Its intuitive software and end-to-end logistics support make it a preferred choice for small to medium-sized brands.
Key Features:
Warehouse Management System (WMS): Offers tools to optimize picking, packing, and inventory management across multiple locations.
Order Fulfillment Services: Includes real-time inventory tracking, accurate order processing, and custom packaging options.
Seamless Integrations: Connects effortlessly with major eCommerce platforms like Shopify, WooCommerce, and BigCommerce.
Sustainability Initiatives: Focuses on eco-friendly shipping solutions and optimized supply chain processes.
3. Netsuite
NetSuite WMS is a powerful cloud-based solution designed to optimize and automate warehouse operations. It integrates seamlessly with NetSuite’s ERP system, enabling businesses to manage their warehouse activities efficiently, from order processing to inventory management.
Key Features:
Mobile RF Barcode Scanning: Enables real-time tracking of inventory, improving accuracy and reducing errors.
Task Management: Organizes and prioritizes warehouse tasks to ensure efficient workflow.
Inventory Tracking: Tracks stock levels and ensures real-time visibility of inventory across multiple locations.
Bin Management: Optimizes storage space by managing bins and locations in the warehouse.
Integrated Inbound Logistics: Ensures seamless flow of goods from suppliers to your warehouse, improving order fulfillment accuracy.
4. Cin7
Cin7 is a cloud-based inventory and warehouse management system (WMS) designed to help eCommerce businesses streamline their warehouse operations. It integrates seamlessly with leading sales channels and third-party logistics providers, making it a versatile choice for growing businesses.
Key Features:
Real-Time Inventory Tracking: Provides real-time visibility into inventory levels across multiple warehouses and sales channels, reducing the risk of overstocking or stockouts.
Multi-Location Warehouse Management: Manage inventory across multiple locations with ease, allowing businesses to fulfill orders from the nearest warehouse for faster shipping.
Order Processing and Fulfillment Automation: Automates order management processes such as picking, packing, and shipping, improving order accuracy and speed.
Integration with eCommerce Platforms: Cin7 integrates with popular platforms like Shopify, Amazon, and eBay, streamlining sales and order fulfillment in one unified system.
5. Ramp Systems
Ramp Systems offers an enterprise-grade Warehouse Management System (WMS) that focuses on improving the efficiency of complex supply chains. Known for its flexibility, Ramp Systems caters to businesses that require tailored solutions for multi-location warehouses and advanced inventory management.
Key Features:
Multi-Company and Multi-Facility Management: Ramp Systems excels in managing multiple companies and facilities from a single platform, making it ideal for large-scale operations.
Advanced Order Fulfillment: Streamlines the entire order fulfillment process, including picking, packing, and shipping, with high efficiency.
Customizable Mobile RF Scanning: Mobile barcode scanning allows for real-time tracking and data entry, improving warehouse accuracy and productivity.
Robust Billing and Reporting: Provides detailed financial and operational insights, empowering businesses to make data-driven decisions and improve their bottom line.
Kitting and Assembly: Allows for the assembly of products or kits from multiple components, enhancing product packaging and delivery processes.
6. Powerhouse WMS
Powerhouse WMS by QSSI is a powerful warehouse management system designed to optimize inventory control, order fulfillment, and operational efficiency. With a focus on flexibility and scalability, Powerhouse WMS is suitable for businesses of all sizes and industries, offering comprehensive solutions for complex warehouse operations.
Key Features:
Real-Time Inventory Visibility: Provides real-time tracking of stock levels, ensuring better control and reducing the risk of stockouts or overstocking.
Multi-Channel Fulfillment: Efficiently handles orders from various sales channels, including eCommerce, retail, and B2B, ensuring fast and accurate fulfillment across multiple platforms.
Customizable Order Management: Tailors order fulfillment workflows to meet specific business requirements, from picking and packing to shipping and returns.
Advanced Reporting and Analytics: Offers in-depth reporting tools that provide insights into warehouse operations, helping businesses streamline processes and make data-driven decisions.
Seamless Integrations: Easily integrates with popular eCommerce platforms, ERP systems, and third-party tools, ensuring a smooth flow of data across the entire supply chain.
Powerhouse WMS helps businesses streamline warehouse operations and improve order accuracy. Its robust features and seamless integrations make it a top solution for companies looking to optimize their warehouse management processes and scale their operations efficiently.
7. Warehance
Warehance is a cloud-based warehouse management system that provides eCommerce businesses with the tools they need to optimize inventory control, order fulfillment, and operational efficiency. With an intuitive interface and robust features, Warehance is a great solution for businesses seeking flexibility and scalability in their warehouse operations.
Key Features:
Real-Time Inventory Management: Allows businesses to track stock levels in real-time, ensuring inventory accuracy and preventing issues such as stockouts or overstocking.
Order Management System: Streamlines order processing, including picking, packing, and shipping, helping businesses fulfill orders quickly and efficiently.
Multi-Warehouse Support: Manages multiple warehouses simultaneously, providing greater flexibility for businesses with complex fulfillment networks.
Advanced Reporting and Analytics: Offers detailed insights into warehouse performance, inventory turnover, and order fulfillment, enabling businesses to make data-driven decisions.
Seamless Integrations: Integrates with major eCommerce platforms such as Shopify, WooCommerce, and BigCommerce, as well as third-party logistics providers, ensuring a smooth flow of data.
Should You Use a 3PL for Your eCommerce Warehouse?
Managing a warehouse in-house isn’t always the best option for every eCommerce business. If you're a small or mid-sized business, outsourcing fulfillment to a 3PL (third-party logistics provider) might be the most cost-effective solution.
What’s a 3PL?
A Third-Party Logistics (3PL) provider is a company that manages various logistics and supply chain functions for eCommerce businesses. This includes the storage, handling, packaging, and shipment of products to customers. Essentially, a 3PL acts as an extension of your business, taking care of everything from warehousing to delivery, allowing you to focus on core functions like marketing, sales, and product development.
Why Choose a 3PL?
Cost Savings: You avoid expenses for renting warehouse space, hiring staff, and buying equipment.
Scalability: A 3PL can handle fluctuations in order volume, particularly during peak seasons like Black Friday and Cyber Monday.
Advanced Technology: 3PLs use cutting-edge WMS and order management systems, providing better inventory tracking and order accuracy.
3PLs are ideal if you want to offload logistics and focus more on product development, marketing, and customer service. However, businesses that want full control over their supply chain may prefer to handle warehousing in-house.
What are the top 3PL service providers in US?
For eCommerce businesses, partnering with the right 3PL provider can result in faster shipping times, reduced operational costs, and improved customer satisfaction. Here are the top ones in the USA:
Amazon MCF (Multi-Channel Fulfillment)
Amazon MCF allows sellers to leverage Amazon's vast fulfillment network to store and ship products, even if they are not sold through Amazon. With fast, reliable shipping and the backing of Amazon's advanced infrastructure, MCF is a popular choice for businesses that need seamless fulfillment solutions.
ShipBob
ShipBob offers a robust fulfillment network designed to help eCommerce brands scale efficiently. Their platform integrates with top eCommerce platforms like Shopify, BigCommerce, and WooCommerce, providing fast shipping and real-time tracking capabilities. ShipBob’s distributed fulfillment centers allow for reduced shipping times and costs.
ShipMonk
ShipMonk is known for providing an intuitive, cloud-based platform that integrates with various sales channels and marketplaces. Their fulfillment services range from order picking to returns management, ensuring seamless operation for eCommerce brands. ShipMonk specializes in helping subscription-based and high-volume businesses.
Airhouse
Airhouse is a modern 3PL provider focused on offering a flexible and customizable solution for eCommerce businesses. They provide streamlined order fulfillment, inventory management, and direct-to-consumer shipping. Airhouse is particularly known for its technology-driven approach, offering real-time analytics and integrations with eCommerce platforms.
Conclusion
To stay competitive in the fast-paced eCommerce world, setting up an ecommerce warehouse that’s optimised for operations is a must. By choosing the right eCommerce warehouse management software or teaming up with reliable 3PL providers, you can streamline your processes, cut costs, and deliver faster results. Take action now to enhance your logistics strategy and position your business for long-term growth and success in the ever-evolving market.
Frequently Asked Questions (FAQs)
1. What is an ecommerce warehouse management system (WMS)?
A WMS is a software solution that helps eCommerce businesses manage and optimize their warehouse operations, including inventory tracking, order picking, packing, and shipping.
2. Should I use a 3PL or run my warehouse in-house?
A 3PL is a great option if you want to outsource logistics, save costs, and focus on growing your business. Running an in-house warehouse gives you more control but requires significant investment in staff and infrastructure.
3. What are the best warehouse management systems for small businesses?
Some great options for small businesses include TradeGecko (QuickBooks Commerce) and ShipHero. These offer easy integration with eCommerce platforms and provide essential WMS features.
4. How can I scale my ecommerce warehouse as my business grows?
Invest in scalable WMS software, automate key tasks, and optimize your warehouse layout to accommodate higher order volumes.
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Surya V
Surya leads Product Management at Skai Lama. He talks about Shopify Checkout, Conversion Optimization, and growth tactics for Shopify Plus stores.
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