eCommerce Warehousing: Everything You Need to Know
eCommerce warehousing is the process of storing your goods before they’re sold online. eCommerce warehousing is more than just a place to keep your stock, however. It’s also about storing your products in a safe and secure manner, tracking the in-stock status of your entire store inventory and keeping track of the movement of your items. eCommerce warehouse management is a job in itself. As you likely know first-hand, it becomes exceedingly difficult to manage warehousing on your own, especially as your store grows. That’s why many eCommerce store owners look to the professional eCommerce warehouses to manage it for them.
Different types of warehouses for eCommerce
All eCommerce warehouses serve the same basic functions, but there are several different types. Each offers distinct benefits for different types of eCommerce business.
- Private warehouses: These are owned by private wholesalers, distributors, or larger retailers who rent space to smaller sellers. These tend to have more advanced eCommerce warehouse management systems, and may be more costly as a result.
- Public warehouses: Public warehouses are similar to private warehouses, except that they’re owned by governmental agencies who loan space to businesses and individuals. These can be basic in terms of functionality, but they cover the basics and are affordable.
- Government warehouses: Unlike public warehouses, the managing agency has greater control. This often results in increased security, which is ideal for stores who sell high-value items. However, if you default on your rent, they can sell your products to recoup their costs.
- Distribution centers: Distribution centers are designed for maximum efficiency and warehouse fulfillment. Products tend to come and go rapidly within these centers, rather than being stored for long periods of time. They’re commonly used by food sellers and others who need to move inventory quickly.
- Smart warehouses: Smart warehouses take the efficiency of a distribution center to another level. They use artificial intelligence to streamline the entire eCommerce warehouse process and automate as much of it as possible. This can be done by using drones and software for eCommerce packaging, shipping, and storing.
- Consolidated warehouses: Consolidated warehouses offer smaller businesses a more affordable eCommerce warehouse fulfillment option. These warehouses consolidate multiple shipments from different sellers into large shipments that get sent to the same place.
- Cooperative warehouses: Cooperative warehouses are owned by their members, who can store their products for reduced rates. Typically, these are managed by sellers who share a vertical and have similar warehousing needs.
- Bonded warehouses: Bonded warehouses cater to importers who need a place to store their imported products duty-free until they’ve been purchased. They allow importers to store products for longer periods of time without having to pay custom duties.
The benefits of eCommerce warehousing
There are many benefits to eCommerce warehousing, no matter the size of your online store. For a majority of online shoppers, shipping speed is just as important as free shipping. By utilizing professional storage, you can offer faster shipping and win more customers. Nearly 80% of shoppers now view free two-day shipping as a standard expectation. If you have dreams of your eCommerce store outgrowing your garage, it’s time to embrace eCommerce warehousing.
Design Principles for an eCommerce Fulfillment Center Warehouse
There are a few fundamental concepts to consider when setting up and operating a successful e-commerce fulfillment facility, regardless of the size. Capacity constraints, reduced output, and storage shortages will occur if you don’t follow these principles. You’ll also need to ensure the warehouse is designed for efficiency, so that your employees can quickly and easily find and ship orders.
Warehouse and Facility Design
When it comes to the design of your fulfillment center, the first step is to understand your storage needs. You’ll need to create a layout that allows you to store all your products efficiently. This could mean using various storage solutions, such as pallets, racks, and shelves. Racking design and aisle width have a significant impact on storage space needs.
| Aisle Type | Width | Equipment Used | Storage Capacity Impact |
|---|---|---|---|
| Regular Aisle | 12-foot | Standard sit-down/counterbalanced lift truck | Baseline |
| Narrow Aisle | Reduced width | Small aisle reach truck | Up to a 33% increase over 12-foot lanes |
| Extremely Narrow Aisle | 6-foot | Turret truck or swing arm truck | Up to a 66% boost over 12-foot lanes |
The first step in good warehouse planning is to ask yourself, “How much storage area do I require?” A decent place to start is by factoring in how many pallets and boxes you expect to move at any one time, then multiplying by the size of your typical pallet or box. It’s fine if this number is significantly greater than your warehouse footprint, provided you use vertical space and efficient racking designs.
