Finding a warehousing solution can be a bigger challenge when you are starting your eCommerce venture. Even more, if your company is in full growth, it is very likely that you will soon run out of space to store an expanding inventory.
That is why in this post we explain the warehousing and even transportation services that are available today in the market, as well as their advantages and disadvantages so that you can choose based on your needs.
A bad or insufficient storage system will mean that at some point you will receive many orders and you will not have enough space or tools to meet that demand.
That is why we list the most common and efficient modalities used today in terms of speed and logistics, as well as their known advantages and disadvantages:
Under this model, your online store manages customer service, purchase, and data management, while the wholesale provider that stores the products takes care of packaging and dispatching them, explains the digital marketing education portal.
In this case, your business is just an intermediary, you never see the product, you do not handle stock and avoid initial inventory costs, indicates the Shopify site.
- You don’t need to manage inventory or calculate how much it costs to move a product from the warehouse/office to the final destination.
- Facilitates the sale of a wide range of products.
- You delegate warehousing, packaging, and shipping functions. Thus, you focus on sales, marketing, and customer satisfaction.
- You do not have control of the packaging and shipping of the product, therefore you should have absolute confidence in your warehouse and shipping partner, warns the Foundr startup site.
- You will not be able to have packaging with your signature or give it your personal touch.
- Generally, this type of service does not work with large products.
2. Storage at home
This modality is widely used by small and medium-sized companies (SMEs) that are just starting out and want to have full control of their products in their own space. You can read more about which sites are good for childrens.
- You have full control of inventory and dispatch, says client conversion tools company Justuno.
- Facilitate the recognition of your inventory in real-time and the monitoring of the stock.
- You can personalize the delivery, for example putting a signature or a special thank you note.
- You have a greater capacity to react to high demand for merchandise and you will not have to wait for third parties to fulfill the order.
- You will spend much more time, since you will be in charge of the packaging and that the product reaches your customers’ homes.
- You will have a low storage capacity. It depends on the production cycle you have, but if your warehouse is your home and your products are very bulky, you will most likely have problems storing them.
3. Temporary storage
With this service you can only save your products for a certain time, generally, the minimum time you can have your items in one month. You must bear in mind that, in certain cases, this type of warehouse does not allow to store some products.
The Foundr site points out that this mode allows you to pack your products yourself, so you can customize your shipments. There is also the possibility for the temporary storage company to send the merchandise directly to your dispatch provider.
- Your warehouse company can provide knowledge on how to carry out inventories and stock tracking.
- They generally offer online and real-time stock monitoring as a benefit.
- This strategy requires excellent communication with your warehouse partner since any failure will mean delays and the loss of a potential customer; if it takes a long time to send you the product to coordinate the dispatch, for example.
4. Warehouse rental
It is the most popular storage solution. It includes the rental of the surface to an external company. There are multiple sites that offer this service whose price varies depending on the time and space required.
- Compared with dropshipping and temporary storage, it is cheaper, because you only pay for space but it does not include extras (pick-up and delivery, logistics, shipping, etc.)
- You must coordinate the logistics of leaving and removing the products in the warehouse.
- It is more difficult to monitor your stock because the service only involves leasing the space.
5. Comprehensive service
This is a more complete service. In this case, a company will store your products and each time you sell it will make sure that it reaches your customers. The companies that offer this service are responsible for storage and transport, and they also respond in the event of a loss of stock. The rental price of this type of warehouse will depend on the volume of inventory.
- You will not have to leave your job for your business to work.
- Your online store will be fully integrated.
- You can choose the best type of packaging so that your product arrives in the best possible way.
- Warehouse prices will be more convenient if your sales volume and inventory movement are high.
- Better relationships with customers and suppliers.
- If you still don’t have a high volume of products, the cost of using a comprehensive service may be very high for your eCommerce.
- It can be more expensive than other options depending on your sales volume.
The best warehousing solution for your eCommerce venture depends on price, margins, profits, and time.
If you are 100% dedicated to your eCommerce business and you are just starting out, storing the products at home could be the best option at the beginning until you establish yourself and achieve more constant sales volumes. However, this option will require time and space that you must be clear about.
However, outsourcing your warehouse is recommended when the business begins to grow. There are basic services and others that take care of all the logistics related to storage so that you can focus on growing the business and customer satisfaction.