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Warehousing For Ecommerce: Complete Guide 2024

While many ecommerce businesses start from a spare room at home, it’s easy for retailers to quickly run out of space for stock as their order volumes grow. You may have already upgraded to a warehouse, but are you utilising it to its full potential? 

Warehouse Management Ecommerce

by Danielle Allen

Digital Content Manager

Posted 14/09/2023

Ecommerce warehousing is a key process that’s essential for scaling your ecommerce business.

Efficiently managing a warehouse for your ecommerce business is crucial for reducing delivery times, increasing order accuracy, and ensuring that your customers are satisfied and more likely to make repeat purchases.

In this comprehensive guide to ecommerce warehousing, we will cover the following topics:

  • What is ecommerce warehousing?
  • The different types of warehouses for ecommerce
  • The 5 best practices for ecommerce warehousing
  • Unlock the potential of your ecommerce warehouse with Mintsoft

What is Ecommerce Warehousing?

Ecommerce warehouses are storage facilities where products available from online stores are kept. When a customer places an order, an item from the ecommerce warehouse is picked, packed, and shipped to their address.

These warehouses stock a wide range of products, from perishable foods requiring specific storage temperatures to delicate items that require careful handling during picking and packing.

Small businesses often utilise these warehouses or third-party fulfilment providers when their inventory levels and number of orders exceed the capacity of their current location.

Ecommerce warehouses have to manage and monitor several variables, including:

  • Goods-in: These are deliveries of stock to the warehouse. A well-run warehouse can handle early or late deliveries effectively
  • Storage and stock locations: ensuring that products are stored in the most efficient locations for picking and packing routes
  • Picking and packing: the process of selecting items to create an order that can be packed and shipped to the customer
  • Inventory management: ensuring that enough inventory is kept in reserve in the warehouse to deal with demand and potential supply chain delays
  • Managing returns from unsatisfied customers: ensuring the returns are processed correctly and inventory is replaced as needed

The different types of warehouses for ecommerce

Bonded warehouse: A bonded ecommerce warehouse is where goods that would typically be subject to VAT and duty are stored in a secure location. Whilst in the warehouse, the goods are effectively free from duty and VAT. 

However, tight monitoring is needed in these types of warehouses as goods cannot exit the warehouse until duty has been paid. Bonded warehouses are typically used for goods that have been imported or are due to be exported and other goods such as alcohol. 

Automated warehouses:  Automated warehouses use a complex system of software and machines to fully or partly automate the pick and pack process. Goods are delivered to the warehouse, which will then be sorted and stored by robots. 

When it is time for the goods to be picked, the robots know the exact location of the goods and quickly pick them, pack them and have them ready for delivery. This type of warehouse is often used for smaller goods, which are picked more frequently and stored for shorter periods of time. 

Climate-controlled warehouses: A climate-controlled warehouse is designed to store temperature-sensitive products, such as food, pharmaceuticals, and other perishable items. These warehouses maintain a consistent temperature and humidity level to ensure that the products are not damaged or spoiled. 

Consolidated warehouses: A consolidated warehouse is a type of warehouse where multiple businesses or vendors share the same storage space to reduce costs and increase efficiency. This type of warehouse allows businesses to benefit from economies of scale, as they can share the costs of storage, labour, and equipment with other companies. 

Smart warehouses: Similar to automated warehouses, smart warehouses make use of software to optimise their processes and make the warehouse more efficient. 

Distribution warehouses or centres: Unlike other warehouses, distribution centres are designed to store goods for a short period of time. Items are temporarily stored whilst they wait for transportation to their next destination. 

On-demand warehouse: This type of warehouse is where businesses can rent shelf space or storage space within another company's warehouse. As demand increases they can pay for more storage space. If demand was to drop they could reduce the amount of space they rent. Ensuring at all times they are used in the most efficient amount of space. 

Choosing the Right Warehouse for Ecommerce 

For your ecommerce business, the right warehouse could lead to quicker delivery and the ability to scale. 

If you sell perishable goods, then a temperature-controlled warehouse will be the best option to ensure your stock is stored safely. If you're a small ecommerce business that's just starting out, renting out a full warehouse might be redundant and your business could better suit an on-demand warehouse. 

Learn more in our blog on 10 Types Of Warehouses & How To Choose One

The 5 best practices for ecommerce warehousing

Use a warehouse management system: 

warehouse management system (WMS) can be used to track inventory, create automated workflows, and increase overall visibility and control over your ecommerce warehouse. Warehouse management systems can produce reports and analytics using real-time data from your warehouse as well as data from your ecommerce store. 

How a WMS can support ecommerce management: 

  • Improved Inventory System Picking Accuracy
  • Improved Customer Service
  • Reduced Stock Inventory Costs
  • Reduced Time Spent Managing
  • Increased Speed of Orders

Picking and Packing: 

Picking and packing is the process of selecting and packaging products in a warehouse. It’s important to reduce human error in your pick and pack process to ensure orders are accurate and fulfilled on time. Speeding up areas of your pick-and-pack process can lead to quicker order fulfilment times, meaning your customers receive their orders quicker. 

Improve your picking and packing process by: 

  • Use technology to create the most efficient picking routes, saving time and increasing the number of orders that can be picked. 
  • Store your inventory in the right locations, frequently ordered items can be placed closer to the packing station. 
  • Make use of mobile barcode scanners to reduce the number of human errors, ensuring workers have picked the right item and help track what items have been picked from a shelf. 

Inventory management and tracking: 

Keeping on top of your inventory tracking allows you to understand how much inventory you have left and where exactly it is in your warehouse. Issues arise when there is more or less inventory than is expected in the warehouse, which can lead to overselling or understocking. Ultimately, this leads to inefficiencies and a poor experience for your ecommerce store customers. 

Improve your inventory management in your ecommerce warehouse by: 

  • Making use of an inventory management system
  • Check, monitor and update inventory levels
  • Perform routine checks to see if inventory levels match the software. 

Integrations for autonomy: 

It’s likely your ecommerce business has many moving parts from your website to your warehouse, to shipping and to marketing. It's crucial all these components are connected, communicating and working together to improve your processes and customer experience. By connecting your WMS with well-known platforms, you can automate a number of processes. 

Helpful Integrations for warehouses: 

  • Courier and multi-carrier integrations connect your store and warehouse with a vast range of couriers like DHL, Royal Mail and many more. Shipping rules can be created to ensure the most cost-effective courier is chosen based on your shipping information. 
  • Accountancy system integrations automate financial processes like invoicing, payments and receipts. Reducing the need to manually log onto multiple systems and manually enter data. 
  • Marketplace integrations create a centralised location to manage orders and inventory. Bringing multiple marketplaces together like eBay, Amazon and Onbuy. 
  • Shopping cart integrations can connect platforms like Shopify, WooCommerce and SquareSpace. Automatically sending data from these platforms to your order management, tracking and accounting software.

Demand Forecasting:

Fluctuations in purchases occur often and sometimes seemingly at random, especially for ecommerce stores. Demand for your product might increase at certain times in the month or even year, and online sales like Black Friday and Cyber Monday are becoming increasingly popular in the UK. 

Using historical data can help to spot trends from previous years or changes in order levels, however it’s important to remember that a social media post might go viral, creating unprecedented demand for your product. 

The different types of demand forecasting: 

  1. Passive demand forecasting
  2. Active demand forecasting
  3. Short term projections 
  4. Long term projections 
  5. External macro forecasting 
  6. Internal business forecasting

Unlock the potential of your ecommerce warehouse with Mintsoft

We’ve briefly touched on the importance of using warehouse management software like Mintsoft to improve inventory accuracy, reduce picking and shipping errors, and streamline warehouse operations.

If you need a little more information, read our guide on how to choose a warehouse management system for your ecommerce warehouse, or learn how much a warehouse management system costs.

Book a 1:1 personalised demonstration with us today to see how the Mintsoft warehouse management system can transform your ecommerce warehouse. 

By Danielle Allen

Digital Content Manager

Danielle is a content manager at Access Mintsoft with an abundance of experience in the new and emerging technologies sector. Dedicated to providing ecommerce retailers and 3PL’s informative and easy-to-understand content that engages and empowers readers to learn about all things ‘order fulfillment’.