E-Commerce Warehousing

Small business owners with an e-commerce store typically start storing and managing their inventory at home. If you're an entrepreneur yourself, maybe you don’t plan on scaling yet. But without a dedicated space, your stock may make your house feel less like a home. You also need to consider what you'll do when your business starts to grow.

E-commerce warehousing can solve many of the inventory problems and make the fulfillment process more efficient. As long as your business generates the capital, it can never be too early to get your small business a warehouse, especially if it’s a shared warehouse.

The e-commerce market is growing quickly, with online shopping expected to generate 1.8 trillion U.S. dollars by 2029. That’s a lot of market. E-commerce warehousing can help your business keep up with the demand.

What Is E-commerce Warehousing?

E-commerce warehousing is a process of storing your online products in a warehouse for better order fulfillment, inventory management and returns processing. Whether you’re a small business and don’t need much extra space or an enterprise that requires thousands of square feet in storage, suitable warehouses can accommodate your needs.

You may purchase or lease a warehouse or opt for third-party distribution services. Traditional warehouses often require longer leases, while shared warehouses can offer shorter commitments, which makes them suitable for small businesses.

Benefits of E-Commerce Warehousing

There are many benefits to e-commerce warehousing as it integrates with other e-commerce processes, some being more obvious than others.

By having a warehouse for your online products, you get to:

• Have a well-organized inventory: Compared to having your stock on the floors of your home, having a dedicated warehouse for your products helps you keep them organized. You can rearrange the goods according to their popularity, for instance, or identify if you have more room to accommodate more stock. Organizing your inventory based on the seasonality of the products can also be helpful.
• Have a more efficient order fulfillment and returns process: With the help of an e-commerce warehouse management system (WMS), integrating your warehouse can improve your shipment process and keep your inventory updated and accurate. Returns processing can also be easier with this integration.
• Access a cost-effective storage solution: Traditional and dedicated warehouses can require longer commitments and be pricier. E-commerce warehouses that offer shared spaces can make it easier for small businesses to get started.
• Improve your customer satisfaction: If you have a local warehouse for your e-commerce store, customers around the area can get faster deliveries, which is becoming an expectation of many consumers. A well-organized inventory can also reduce order and shipment mistakes, increasing customer satisfaction.
• Scale your business more easily: Maybe you started with a small warehouse space as a small business. When you grow and scale into a midsized business, you can easily switch to larger spaces with some providers. A warehouse provider may also offer additional services that can cater to your growing needs.
• Have a safety net for unpredictable demand: Offering seasonal products can be challenging. If a product goes out of season, you can safely keep it in your e-commerce warehouse to be resold when the time is right. Seasonal promotions, such as Black Friday, will also be more manageable, as you can make room in your storage for the products you plan to sell during this time.
• Accommodate more products: Because warehousing provides more storage space than your garage or living room and helps streamline fulfillment, you can increase your product variety in your online store, leading to more sales and happier customers.

Drawbacks of E-Commerce Warehousing

Although e-commerce warehousing offers several benefits, there are a few drawbacks you’ll need to prepare for:

• Warehouse costs: Unlike storing your inventory at home, opting for a warehouse for your e-commerce store requires additional capital. Costs could be in the form of membership fees or recurring payments based on your contract terms.
• Location limitations: E-commerce warehouses may offer locations in various states. However, shipping to your customers who live farther away from your warehouse may be challenging. Choosing an ideal warehouse location can also be a huge consideration as it requires commitment, and it’s not easy to change your mind about it later on.
• Incomplete or excess services: Depending on the provider, you may get features like robotics and artificial intelligence. However, you may be more interested in the features the warehouse does not provide. The features that come or don’t come with the warehouse can affect your budget.
• Space optimization: Although it can be easy to scale as you grow your business, seasonal fluctuations in sales can provide challenges with organizing your inventory, especially if you rent a small space.
• Management challenges: Because e-commerce warehousing is only one part of the equation, you may need more staff to help you manage each part of the e-commerce process, such as employees to work on order fulfillment or returns management. The larger the warehouse, the more complex the logistics can be.

E-Commerce Warehousing Best Practices

To make the most out of the benefits of e-commerce warehousing and to mitigate its drawbacks, you can follow these best practices:

Select a Warehouse Location Based on Your Target Market

To improve shipping and delivery schedules and ensure your customers are satisfied, consider your customers' dominant location when selecting a warehouse. The right location makes deliveries cost-efficient, since you won’t need to spend on longer transportation. When your small business grows, consider expanding with multiple warehouse locations to serve more customers efficiently.

Use an E-Commerce Warehouse Management System

A WMS can optimize your entire e-commerce process. It offers real-time insights into your inventory, so customers can avoid ordering items that are out of stock. It also predicts when you might run out of inventory, so you can restock as needed.

A WMS can also manage your supply chain and streamline your order fulfillment. An automated system can connect your customers’ orders to the workflows in your facility, such as picking, packing, labeling, shipping and others.

Consider the Warehouse’s Features for Future Use

Warehouses and warehousing systems may offer advanced features that can be helpful as your business grows. For instance, is the warehouse capable of adapting conveyor technology? Do you plan to implement robots that make tasks like picking products more efficient? Think about whether the facility's capacities can cater to your business as it scales.

Business Gets Easier With Portal Warehousing

If you’re a small business looking to improve your operations through e-commerce warehousing, Portal Warehousing can help. We are a co-warehousing and logistics space provider serving multiple locations — including Minneapolis, Brooklyn and Los Angeles, with more coming soon. Unlike traditional warehouses, we won’t lock you into long-term leases. You can choose from three-, six and 12-month membership plans, offering access to a warehouse space and a coworking space you can use as you work on your business.

Units are move-in ready. Plus, you can access logistics services and technology solutions like analytics, shipping and returns, and WMS. Because you’ll be co-warehousing with other entrepreneurs, you’ll even get to network and expand your connections. If you’re ready to get started, check out our spaces and book a tour today!