5 Ways Warehouse Location Impacts eCommerce Business

Warehouse software

Of all the factors affecting your business’s growth and stability, inventory location is vital to operate successfully. The global pandemic has worsened the warehousing challenges for many retailers – with the majority claiming to find inventory management more difficult than ever due to COVID 19. This significantly increases the importance of deciding on your inventory location and warehouse management system which is the key regardless of whether you are setting up an eCommerce business from scratch or just expanding the current operations.

The supply chain and logistics issues that emerged for nearly all online retailers and brick and mortar store owners of all types and sizes during the pandemic were quite rampant and often considerable. In many situations, these problems are highlighted within existing systems, causing companies to reconsider how their internal and external business operations need to be executed and managed for successful recovery, adaptation and growth. For many organizations, restructured operations and optimizing warehouse location are key factors to escalate their eCommerce activities.

The inventory location majorly impacts your eCommerce businesses. Here’s how you can make the best out of your warehouse location.

Omnichannel Scaling:

ECommerce businesses should consider the complete omnichannel spectrum when it comes to their fulfillment warehouses. The location of the company’s inventory centers have always been primarily linked with the logistics chain. However, online retail stores have mandated the acceleration of online fulfillment.

This makes the warehouse location even more relatable and a mandatory factor in the online order fulfillment software. It’s important to deliver your orders seamlessly, quickly and cost-effectively. And, this can only be possible by decreasing the distance between the customers and their required products. It means your inventory should be located at some central point. This is the core reason why most of the retailers preferably convert vacant and low-performing stores and malls into their storage facilities – located in the area near to potential customer base.

Third-Party Logistics:

Common sense is to not put a cart before your horse. This is mainly because if you put and manage your inventory in multiple locations, it could bring small independent brands an unfavorable business cost. Historically, one warehouse and fulfillment center is the right option that cannot be turned out to be a trade-off such as paying an additional amount for shipping on a single order consisting of different items located in multiple storage facilities.

Even if you want to store your inventory across different locations, build a good predictive model about the items you sell and from where, ensuring effective order fulfillment. This required sophisticated and dynamic warehouse management software, leading the growing eCommerce businesses to seek third-party logistics and fulfillment partners.   

Remove the Gap:

Warehouse location, inventory management and online order fulfillment varies from one company to the next. However, the core logistical objective of eCommerce business is to facilitate the most cost-efficient and the fastest delivery. Therefore, no online retailer can afford the higher shipping cost he needs to pay when an order travels farther to reach its end user.

That’s why the most strategic approach is to close the gap between products and their consumers as much as you can. Store your inventory somewhere significantly closer to your most densely populated consumer bases.   

Data-Backed Strategy:

Less shipping equates more profits. The most important reality of any business success is to improve sales and profit margins. Every company dealing with online order fulfillment requires managing at least two shipments – the inbound shipment of raw and finished goods to the warehouse and the outbound shipment of finished products to customers. Keeping all other shipping variables part of the bigger picture, never allow far-off locations to sabotage your company’s bottom line.    

Not only has the location of your warehouse had a major influence on your operating costs, the data-backed strategy is equally important. It can potentially do a lot to improve your margins compared to any other operations-focused decision.  

Keep Customers Satisfied:

Happy customers are the backbone of any business. But, the considerable shipping cost across the retail spectrum can greatly affect the last-mile delivery – might be leaving customers downhearted. That’s why companies are focusing on the same-day delivery model for eager customers and tend to locate inventories in cities – preferably going vertical to accelerate the delivery process.

Today’s fast-paced, dynamic and highly saturated eCommerce market mandates the retailers to have sufficient inventory visibility, warehouse management and control capabilities at all times.

Wrap Up:

Inventory location is as important for eCommerce businesses as it is for any other business like manufacturing and distribution. Online retailers can engage third-party logistics and shipping vendors for their order fulfillment, without the need of having their own warehouses. They can utilize dark stores which are now considered as the future of post-pandemic retail – these are conventional retail stores converted to the local fulfillment centers. The primary goal is to build a satisfied consumer base and therefore, eCommerce businesses should make a well-informed decision about warehouse location and management.

Learn more about warehouse management and inventory control features with MWI Solutions that can help boost your business performance.

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