Effective warehousing offers a range of benefits for your e-commerce business. Whether you’re a startup shipping your first order or a multinational corporation with stock stored across the globe, keeping physical inventory provides much more than just having items available to purchase.
What is warehousing?Warehousing is the process of storing physical inventory for sale or distribution. Warehouses are used by all different types of businesses that need to temporarily store products in bulk before either shipping them to other locations or individually to end consumers.
For instance, many ecommerce businesses will purchase products in bulk from their suppliers, who ship them to their warehouse for storage. When an end customer then places an order from the ecommerce site, the business — or its third-party fulfillment provider — picks and packs the product from the warehouse and ships it directly to the customer.
Ecommerce has driven rapid growth throughout the warehousing industry. In fact, the market has doubled in the last decade as businesses around the world invest heavily in their supply chains to get goods to consumers and businesses faster and more efficiently.
This isn’t only limited to ecommerce businesses. Most physical retail businesses have limited space in their stores to hold inventory but still need to keep up with demand. Having additional inventory available in nearby warehouses helps ensure they are always able to restock their stores during high volume times like the holidays, even if their suppliers are in other countries and are slow to produce and ship new products.
Warehouse vs. distribution center: What’s the difference?While a warehouse is technically any building that stores physical products regardless of the purpose, a distribution center is more specifically a type of warehouse designed for fulfilling orders for the purpose of distribution to other businesses or consumers. Distribution centers, therefore, need to be designed for not only compact storage but also efficient picking, packing, and shipping.
Why is warehousing important?Warehousing is an essential part of the supply chain for most types of businesses that deal in physical goods. This could be consumer businesses holding a product that eventually makes its way to an end retail customer, or it could be business to business (B2B) companies storing products that eventually make it to business customers.
For retail and ecommerce businesses, warehousing allows:The purchase of wholesale goods in bulk that may not fit in a physical retail store or yet be purchased by an end consumer online.
Large bulk orders - which allow these businesses to negotiate lower prices with their suppliers, thus improving their margins when selling to customers.
Keeping inventory available as demand fluctuates to ensure products stay in stock.
In addition, warehousing allows businesses to store products in strategic geographic areas to reduce delivery times and shipping costs. For example, if a business is selling a product directly to consumers across the US, they may want to store inventory in multiple different regions of the country.
Similarly, if they’re selling to consumers around the globe, they’ll want to strategically place warehouses in different countries to speed up deliveries and minimize shipments that must go through customs.
HEEPO GLOBAL SERVICES LTD (HGSL) is an international organisation with experience in warehousing and distribution with regional headquarters in Indonesia, China and Nigeria. Contact us today.
