Warehousing 6 min read
January 21, 2021 by Rashi Sood - 6 min read
A critical part of the supply chain, warehousing is the act of regulating and controlling different elements of the inventory. Warehousing ensures everything runs optimally – from managing inventory, maintaining equipment, tracking in and out of products to packing products, shipping orders, and implementing an apt warehousing management solution.
Although warehousing may seem like a complicated process, we will try to make it easier for your understanding in this article.
Warehousing: An Overview
The process of storing products until they are sold is called warehousing. In a warehouse, products are stored securely and safely in an organized way. They can be easily located or tracked. All the essential information related to them is stored – for how long they will be stored and how much quantity is in hand.
A startup or small business can easily store its products at home. A retail setup can store its products in a warehouse until they are moved to the retail store. However, in an eCommerce setup, the products are stored until an order is placed. Once the warehouse keeper receives an order, he packs and directly ships the product to the buyer.
Essential Components of Warehousing
It goes without saying that warehousing is the process of storing products before packing and shipping them or moving them to another location. The following are the functions of warehousing:
The warehouse becomes a shipping hub when the products are placed in it. When you receive an order, the products are shipped from the storage facility to the customers directly.
If the manufacturer delivers the products in an unassembled form, the company allots areas in the warehouse to assemble products for the end consumer.
Rental Storage Space
If owning and maintaining a private warehouse is costly and too big for your business, you can consider renting some space in your warehouse to other businesses.
Elements of Warehousing
Warehousing is not just a place to store goods. It is an assembly line, fulfillment center, and much more. There are various elements of warehousing that can help you with protection, storage, and transportation of products:
- It acts as a storage system that offers storage space for goods and easy access.
- Offers climate control to the goods that require a warmer or cooler environment.
- Warehousing comes with inventory management software/solution that helps keep track of inventory in and out of the warehouse.
- Sufficient and experienced staff to process orders in and out.
- Warehousing solutions also offer transportation and moving equipment to transport and deliver goods to and from the warehouse.
- It has ample security to keep the products safe and secure at all times.
How to Choose the Best Warehousing Solution?
There are several considerations that can help you choose the best warehousing solution. Be sure to think them through to find the best solution.
Storage Costs and Number of SKUs
Stock Keeping Units or SKUs help track the inventory you have in hand to sell. But you must calculate the storage fees and the space you will require in the warehouse to store your inventory. For example, you will require a place to store different size, colour, and style for every item you sell. So, you will have to pay for additional storage space for each variation. If you have a few SKUs, storage will be less expensive for you. However, if you have 1000 products, it will be costlier.
Most fulfillment companies don’t work as standalone warehousing solution. They wish to turn inventory by fulfilling orders quickly as and when they are placed. This means you also need to restock the inventory quickly to keep up with the demand and you don’t get stuck paying high warehousing cost.
Shiprocket Fulfillment offers free storage for the first 30 days, and the processing rates start from Rs. 11 per unit.
Seasonal variations in demand and supply can make storing and tracking inventory in warehouse complicated. If you also have seasonal sales fluctuation, leasing out a dedicated space in the warehouse may be costly for you during the off-season or lead to space shortage during peak season. This is why a 3PL logistics supplier can be beneficial for your business.
The location of the warehouse depends on your needs. Suppose you wish to store products in bulk for a more extended period of time. In that case, you can consider warehousing at a facility located at a rural location near a transportation hub. On the other hand, if you wish to deliver products faster to your customers, you can store your products in a warehouse near your customer’s destination.
Warehouses located in urban areas deliver products to larger population quickly and conveniently. This reduces RTO and helps meet customer expectations, as well. Besides, it also reduces shipping expenses and promotes repeat sales.
Different Warehouses to Store Inventory
As the business increases and grows, logistics and order fulfillment become more complex. To reduce shipping cost and optimize fulfillment operations, you can store your products in different warehouses situated at favourable conditions in terms of geography and size.
That said, you must have enough space to meet all your current as well as future needs. This will help prevent you from outgrowing the current warehouse.
To recognize your warehousing needs, you can pay attention to the sales trends to monitor when most of your orders are shipped and when you need more space. If you ship to different zones that are away from the warehouse, you will have to pay higher shipping costs. Besides, the products will take a longer time in transit. Having warehouses in different regions or areas that are near your customers can help you offer same-day or next-day delivery to your customers, and it will also reduce abandoned carts situations.
For example, Shiprocket has fulfillment centers in Delhi, Gurugram, Bengaluru, Kolkata, and Mumbai. This lets the eCommerce retailers take advantage of different locations by distributing their inventory over the extensive geographic footprint.
If you use different warehouses, you will require real-time visibility into your stock levels across different locations to make informed decisions. Also, ensure that you have enough products at all locations to meet all orders in a timely manner.
In case you require additional services apart from that offered by traditional warehousing services like picking, packing, and shipping. You need to be sure that you find a company that can handle all your requirements, like kitting, assembly, B2B orders, cross-docking, etc.
Warehousing is a complex task. It can be simplified by combining different strategies and implementing them aptly. Choosing the right solution can be beneficial for your business, help save money, and meet customer demands and expectations. You can also outsource to a third-party logistics company, like Shiprocket Fulfillment to store your products and pack and ship them when you receive an order.
As said above, order fulfillment is a complicated task, and it plays a critical role in online business. If you wish to know more about the order fulfillment chain and know expert tips, download our eBook – A Complete Guide to Order Fulfillment.