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    Home»Health»Top Warehousing Challenges for New E-commerce Businesses

    Top Warehousing Challenges for New E-commerce Businesses

    StarkBy StarkDecember 23, 2022No Comments7 Mins Read Health
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    E-commerce is one of the most dynamic sectors in the world. The digital era has provided buyers with a greater extent of easiness and accessibility. More companies than ever before are exploiting this opportunity.

    However, running an e-commerce business is more complex than it seems. Many issues can arise during this process. They’re all different depending on what product you’re selling. Let’s look at a few hurdles you might face during your e-Com journey.

    Growth of the eCommerce Sector

    You’ve likely noticed the growth of the eCommerce sector. It is currently among the fastest-growing industry. It’s expected to reach $1.7 trillion by 2027, more than double its current size. 

    The convenience, ease, and accessibility of online shopping are leading more people than ever before to make purchases online instead of at traditional brick-and-mortar stores.

    This is excellent news for entrepreneurs who want to start an eCommerce business. But it can also be a challenge, as there are many factors you need to consider to succeed in this space. 

    In today’s post, we’ll look at some of the most important ones.

    Inventory Management

    Inventory management is integral to your business but can also be challenging. This is due to a large number of moving parts and possible bottlenecks. Inventory management software can help with this challenge by automating many activities and providing visibility into your inventory data. It’s no surprise that the worldwide inventory management software market was worth USD 1,528.3 million in 2021. The amount is expected to hit USD 3,291.1 million by 2028, with a CAGR of roughly 11.2% from 2022 to 2028.

    Inventory management software can aid you in maintaining track of your inventory data, such as products and suppliers. It can also automate many time-consuming tasks, such as ordering and shipping, so you have more time to focus on other areas of your business. This is highly relevant for small firms without an IT team or resources.

    Fulfillment

    Fulfillment is fulfilling an order, which means physically delivering the product to your customer. If you’re starting an e-commerce store from scratch and need stock, there are two types of fulfillment services: warehousing and drop shipping.

    Warehousing is the most common fulfillment method because it allows you to store and sell products already in your possession. You pay a monthly fee for warehouse space and give each product a unique identifier number so that you can easily find the item in stock and ship it out immediately when an order comes through.

    Drop shipping is a fulfillment strategy that enables you to sell things without really owning them. It’s a common practice for online stores to partner with suppliers willing to ship directly from their warehouses to customers.

    We suggest warehousing and explaining why. 41% of online buyers worldwide wish for delivery within 24 hours and 24% within 2 hours. It is essential to speed up your order fulfillment. Otherwise, you will end up losing customers.

    Speeding up is plausible if you choose the warehousing model since you will be storing the products and can ship them out immediately. If you decide to go with drop shipping, your supplier may have an extended lead time before they can get you the product.

    Staffing

    In addition to the equipment challenges, warehouse staffing is another major challenge. Warehouse operations are typically 24/7 and can require several shifts per day. This means you need a reliable crew of employees willing and able to work these hours.

    In addition to ensuring that your staff is available when you need them, they must also be able and willing to perform their work efficiently. You’ll want to hire experienced workers and provide them with adequate training. This ensures their performance in all aspects of their job without any supervision or guidance.

    Besides, warehouses have a high injury rate of 46 per 100 workers, according to the Bureau of Labor Statistics (BLS). So it’s also essential to create an engaging work environment.

    Organization

    The organization is critical to the success of your business. You must be able to locate what you’re looking for when you require it. This requires a system that tracks inventory, sales, and all other vital information. 50% of e-Commerce stores rely on offline tools such as spreadsheets and pen & paper for tracking inventory, sales, and customer information. 

    This is not only inefficient but also puts your company at risk of expiring stock or running out during peak seasons. Understocking leads to non-fulfillment of orders and dissatisfied customers. Overstocking can lead to demand dying down and putting your e-Commerce store in jeopardy, too. Human errors or costly mistakes put all these at stake when so many things could go wrong without automation.

    Receiving

    Receiving is a crucial part of your warehouse process, but it can also be one of the most challenging. While receiving inbound shipments, several communication links must be maintained: with your suppliers, customers, and between accounting and logistics.

    All of these groups need to stay on the same page to ensure that your inventory is managed efficiently and effectively.

    For instance, if you receive damaged goods from the supplier, it becomes vital to communicate immediately and resolve the problem quickly. If you don’t, there will be a delay in shipments and unhappy customers, leading to lost revenue and brand damage.

    Space Allocation

    One of the most common challenges for new e-commerce businesses is determining how to allocate their warehouse space best. To maximize efficiency and profit, using the right storage system for your needs is essential.

    The first step is choosing a system that fits your business model. This may be different from others in your industry or city. By considering factors like inventory quantities and order volume, you can create a plan that makes sense for you and helps enhance efficiency down the road.

    Once you’ve decided on a storage solution such as pull-out racks, floor-to-ceiling shelves, etc., it’s time to set up your warehouse. Ensure all employees know where everything goes so they can quickly retrieve items when needed. If workers can locate products soon without needing extra training time, which many do, customers will receive faster service.

    Other Challenges

    Other challenges can complicate the first few years of an e-commerce business.

    • Tax rules and regulations vary from state to state and country to country. You’ll need to know the requirements for your business activities in each jurisdiction where you sell goods. Depending on your product line, some local governments may require that you obtain a permit before shipping items out of state or internationally.
    • Another area where tech might assist in keeping things simple is customer service. You should ensure that any customer service issues are addressed quickly and correctly. Customers should not feel like they’re navigating a maze when trying to get their questions answered or problems resolved. Of course, technology only sometimes provides all the answers. If there’s something about your products or services that consumers need help understanding, such as how long it takes for an order to ship, then traditional human contact is still necessary.
    • Shipping times and costs vary depending on your product line, but you should ensure that customers know what to expect before placing an order. This information should be available on your website if you sell products with a long lead time, such as furniture.
    • Technology is an essential aspect of every organization. If you provide products or services online, you must guarantee that your website is streamlined and mobile device friendly. You should also have a way for customers to contact you via email or live chat in case there’s an issue with their order.
    • Another area where technology might be beneficial is finance. You should be able to keep track of your sales and spending easily. You must understand how much money comes in and how much money leaves the company. You’ll also want to ensure that your accounting system makes it easy to file taxes on time each year.

    Conclusion

    Fortunately, the solutions to these problems are simple. But they do require a little know-how and planning on your part. It’s important to understand that any issues with your inventory management software can make or break your business.

    If you need help, look into tools automation tools that let you get organized quickly without breaking the bank. 

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