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eCommerce warehousing: everything you need to know!

Last updated April 27, 2022 6 min to read
eCommerce Warehousing
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eCommerce warehousing is a often overlooked by small to mid-size eCommerce stores. It’s tempting to focus time and attention on eCommerce marketing and increasing product page conversion rates.

Don’t be one of those sellers!

If you have dreams of your eCommerce store outgrowing your garage, it’s time to embrace eCommerce warehousing. Read on to learn about the different types of eCommerce warehouses and the benefits of each one.

What is eCommerce warehousing?

eCommerce warehousing is the process of storing your goods before they’re sold online. 

eCommerce warehousing is more than just a place to keep your stock, however. It’s also about storing your products in a safe and secure manner, tracking the in-stock status of your entire store inventory and keeping track of the movement of your items.

eCommerce warehouse management is a job in itself. As you likely know first-hand, it becomes exceedingly difficult to manage warehousing on your own, especially as your store grows. That’s why many eCommerce store owners look to the professional eCommerce warehouses to manage it for them.

Different types of warehouses for eCommerce

All eCommerce warehouses serve the same basic functions, but there are several different types. Each offers distinct benefits for different types of eCommerce business.

1. Private warehouses

Private warehouses are owned by private wholesalers, distributors, or larger retailers who rent space to smaller sellers. These tend to have more advanced eCommerce warehouse management systems, and may be more costly as a result. In the U.S. alone, private warehouses have grown nearly 20% over the past decade.

2. Public warehouses

Public warehouses are similar to private warehouses, except that they’re owned by governmental agencies who loan space to businesses and individuals. These can be basic in terms of functionality, but they cover the basics and are affordable.

3. Government warehouses

Government warehouses are another affordable option. Unlike public warehouses, the managing agency has greater control. This often results in increased security, which is ideal for stores who sell high-value items. However, if you default on your rent, they can sell your products to recoup their costs.

4. Distribution centers

Distribution centers are designed for maximum efficiency and warehouse fulfillment. Products tend to come and go rapidly within these centers, rather than being stored for long periods of time. They’re commonly used by food sellers and others who need to move inventory quickly. Like private warehouses, DCs are also growing, both in number as well as in square footage.

5. Smart warehouses

Smart warehouses take the efficiency of a distribution center to another level. They use artificial intelligence to streamline the entire eCommerce warehouse process and automate as much of it as possible. This can be done by using drones and software for eCommerce packaging, shipping, and storing. One-third of warehouses are already using smart technology, or planning to in the near future.

Amazon’s fulfillment centers are a prime example of a smart warehouse:

Amazon smart eCommerce warehouse

6. Consolidated warehouses

Consolidated warehouses offer smaller businesses a more affordable eCommerce warehouse fulfillment option. These warehouses consolidate multiple shipments from different sellers into large shipments that get sent to the same place. 

7. Cooperative warehouses

Cooperative warehouses are owned by their members, who can store their products for reduced rates. Non-members can store products in co-op warehouses as well, but they’ll pay the full rate. Typically, these are managed by sellers who share a vertical and have similar warehousing needs.

8. Bonded warehouses

Bonded warehouses cater to importers who need a place to store their imported products duty-free until they’ve been purchased. They allow importers to store products for longer periods of time without having to pay custom duties.

The benefits of eCommerce warehousing

There are many benefits to eCommerce warehousing, no matter the size of your online store. Here are three key benefits to consider:

1. Offer faster shipping and win more customers

Did you know that for a majority of online shoppers, shipping speed is just as important as free shipping? Nearly 80% of shoppers now view free two-day shipping as “the norm of online retail.”67% of shoppers expect to receive their orders within two days or less. Only a third are willing to wait longer than that:

How quickly do customers want items shipped

By outsourcing fulfillment to an eCommerce warehouse, you can meet those customer expectations and get your goods delivered to them quickly. This can deepen your customer loyalty, and make your store more attractive to would-be buyers.

If you are a Seller-Fulfilled Prime merchant, fast shipping isn’t optional; it’s a requirement. 99% of your orders must meet that two-day shipping window.

2. Improve inventory management and stay organized

62% of small- to medium-sized e-retailers report “human error from manual process management” is their biggest inventory issue:

With an eCommerce warehouse, that problem goes away. From top to bottom, eCommerce warehouses are built to store products safely and securely, keep them organized, and ship and distribute them as quickly as possible. 

By using an eCommerce warehouse, you get to benefit from that purpose-driven construction. You know that your products won’t be stolen, and they won’t be damaged by temperature changes.

You also get to benefit from their use of eCommerce warehouse management system software. These systems keep detailed records of your current inventory — for all your product variations — and analyze demand levels throughout the year. For you, that means no more lost inventory, no more shipping the wrong product by accident, and no more stock-outs. 

3. Devote more time to marketing and growing your eCommerce store

The eCommerce warehouse fulfillment process is a beast all its own. You risk eating up a lot of time, which can be better spent on eCommerce marketing, sourcing new products, customer service and increasing your revenue.

Many sellers delay using a warehouse for too long, for fear of using up precious budget. This concern is valid, but in reality the benefits of an eCommerce warehouse outweigh the cost for growing sellers.

The ability to fulfill orders faster, ensure the security of your products and manage a growing inventory will help you scale. There’s a clear correlation between store size and warehouse usage. In order to grow, you need to warehouse.

What to consider when using an eCommerce warehouse

When choosing an eCommerce warehousing solution, ask yourself these questions to find the right one for you:

1. What kind of products do you sell?

International sellers may benefit from the duty-free storage of a bonded warehouse. However, those who sell perishable items often prefer distribution centers. A B2B wholesaler could use a consolidated warehouse, while a niche eCommerce store may enjoy more affordable rates with a public or co-op warehouse.

2. How much can you afford to spend on logistics?

The average eCommerce seller spends 11% of their sales on logistics, with transportation and inventory being the largest contributors. As you evaluate eCommerce warehousing solutions, ensure you consider where else you can shift your budget to lower your logistics costs.

3. Does the warehouse logistics system work with your other eCommerce software?

To prevent delays and overstocking or understocking, you need all of your systems to communicate directly. An eCommerce helpdesk like eDesk supports easy integration with your warehouse inventory management system, allowing you to better assist customers and answer questions about their order status.

eDesk customer support software

4. Can the warehouse guarantee fast shipping?

Increasingly customers increasingly expect 2-day delivery times or shorter. Ask about the warehouse’s technology. Batch picking, multi-order support, and packing drones can all speed up shipment times. Do they have contingency plans for hiring seasonal and temp workers to meet demand during order spikes?

Did you know that over 60% of US online retail purchases were made through Amazon last year? Amazon’s hold over eCommerce is well established, with 9.1 million active Amazon sellers worldwide and an average of 66 thousand orders per day. Newer sellers may be wondering how they can get more sales on Amazon in such a competitive environment.

The truth is, they absolutely can because with Amazon’s booming market share come many opportunities. We’ve assembled this digestible list of 14 quick wins and strategic moves, to help you up your game and sell more on Amazon.

1. Do keyword research

Having the right keywords can be one of the most important tactics in reaching your target audiences. Using the keywords that are common to searches for your products is the objective, but search engine optimisation (SEO) is a constantly evolving game. That means that keywords used successfully in the past may not be as effective with updated search engine algorithms today.

The terms used by customers to find products change daily and are affected by seasonal, cultural, and economic factors. Hence, it’s important to stay on top of the latest SEO trends and make sure you cast a wide net when implementing keywords for each product listing.

Each product should be optimized with as many relevant keywords as possible – into the hundreds! This gives you the best possible chance of getting your products found by customers, helping you sell more on Amazon.

Amazon keyword research tools like Helium 10, SellerApp, Jungle Scout, and AMZ One can help by generating a list of related keywords with search volume, competition level, and other useful metrics, making it easier for you to choose the best keywords for your product listing

2. Use a repricing tool to get more sales on Amazon

When it comes to sealing the deal and making a sale, price is a main deciding factor for many customers. As an Amazon seller, you always want to make sure you’re pricing your products competitively, but equally, you don’t want to lose your margin! 

This is something that using repricing software can help with. Repricing software automates the pricing process in real-time, ensuring your prices stay in line with those of competitors, and with market fluctuations, while you get more sales on Amazon.

Repricing software also has many customisable features that allow you to set prices at optimal levels to help drive sales, without compromising profit. It’s worth taking a trial to see how it can help lift your sales. 

3. Get more Amazon reviews

Online reviews are important to spread confidence through word of month and for building credibility for your brand. It’s also a fact that 72% of shoppers won’t buy until they’ve read reviews of a product from people like themselves – people they trust. 

Even a strong product with great marketing behind it still has to overcome the fear of the unknown if there’s no social proof. Plus, positive reviews are a significant factor in deciding which products win the Amazon Buy Box.

Get more Amazon reviews by encouraging feedback from your customers. The best way to do this is by utilizing feedback software to automate the process.

4. Provide great customer service

Customer service is absolutely essential in eCommerce. Offering top-quality customer service not only adds value, but helps retain customers. A big part of making a sale is assuring the customer that they can trust you to deliver, and that trust is hard earned but easily lost. Providing good eCommerce customer service is critical, and committing to providing great customer service is all the more so!

As an Amazon seller, you need to be on top of your customer service. Responsiveness, a friendly manner and quick and easy resolution processes are all ingredients that make for a winning approach to great customer service. 

But it can be confusing trying to streamline it all. Thankfully, there are all sorts of tools available to make this job easier, like helpdesk software to keep all your customer interactions in one place. This helps you to respond quickly and accurately to customer inquiries when they come in, so that your customers always know you’ve got their back.

5. Leverage Amazon seller tools

The best part about being an Amazon seller is that you don’t have to go it alone. There are numerous tools available to help you maximize your business and get the most out of selling on Amazon, whether third-party or FBA. 

From repricing tools, to help desk software, to review software and even shipping assistance, many tools exist on the market today that specifically help Amazon sellers optimize their listings, prices, feedback, shipping, customer service and even their taxes. 

There are many different seller tools available, so it’s worth reading about options and making an informed decision about the right ones to choose for your business. With the right tools, you can grow your business more than you ever thought possible. 

6. Get more sales on Amazon with ads

Running ads is almost guaranteed to help you get more sales on Amazon, but it’s easy to just throw money at them and hope for the best. You can do better! Pay attention to your advertising cost of sales (ACOS) metric, the figure for how much ad spend you need in order to make a sale.

By advertising more efficiently, you lower your ACOS and ensure you get more bang for your buck. Over time, you’ll learn what works and you can employ a strategy with regards to how you run your ads. Taking an insight-driven approach to Amazon ads results in a more profitable Amazon business!

7. Optimise your product pages

The old saying goes that 80% of readers never make it past the headline of any piece of content. That means once you’ve written your product title, you’ve effectively spent 80 cents of your dollar.

When writing product titles, stick to the formula of:

  • Brand name
  • Product name
  • Features (size, colour, gender etc). 

This lets you include the right keywords in the right order to immediately tell shoppers that this is the product for them.

Moreover, making sure to visually design your product pages so that they’re clean, simple and easy to read will also help win over shoppers. No one wants to read through a cluttered page. The more straightforward (yet informative) and the cleaner you make your design, the more likely you’ll be to win over those elusive eyeballs!

8. Win the Amazon Buy Box

The quickest way to get more sales on Amazon is by ensuring that your products show up consistently in the Amazon Buy Box (the area in the top right of a product page, where shoppers can ‘Add to Cart’ or ‘Buy Now’). This is because over 82% of sales happen through this highly sought after space.

Although the exact formula to win the Buy Box is unknown, there are a few things that we know are essential. These are mainly metrics that prove the seller is providing a good customer experience. Customer reviews play a big role here. The more positive reviews a seller can amass, the likelihood of winning the Buy Box increases. 

In addition to reviews, something else that’s obviously very important to Amazon shoppers is price! By using repricing software, you can automatically set your prices at the optimal level to win the Buy Box and maximize profit, even if you’ve got an enormous inventory.

9. Amazon account health rating

The Amazon account health rating (AHR) is a new feature that helps you monitor your account health based on its adherence to Amazon seller policies. 

It considers both negative factors (such as the number of unresolved policy violations on your account) as well as positive factors (how your account positively impacts the customer experience through its selling activities). 

Each account will be given a rating, which is regularly reviewed as Amazon monitors the performance of its sellers. If your account is off-target, you will be notified so that you can improve your performance. Conversely, a good AHR rating will work in your favor, helping assure customers that they’re doing business with a compliant seller. 

10. Maintain your Amazon SLA

A big part of being a seller is cultivating trust with your customers. That means showing them that you operate in an above-board manner and that you’ll make good on your promise of fulfillment to them. One way of doing that is by making sure your Amazon store has a Service Level Agreement (SLA). This is a promise to your customers that they’ll receive their orders on time. When it comes to fulfillment, the SLA is based on the capacity to fulfill open orders and on-time shipping and delivery. 

SLAs help manage customer expectations by defining standards and outlining circumstances under which you as the seller won’t be liable for unfulfilled promises (e.g., natural disasters preventing shipping, etc). 

eDesk’s customer service solution is designed to alert you when your SLA is expiring, so your business is never caught without one. Having a current SLA helps you maintain transparency with customers, thereby building trust which helps ensure customer loyalty.  

11. Focus on products that already sell

Most ambitious business owners want to try new streams of revenue, but it’s important not to lose sight of the things that are making you money now. 

By doubling down on the products that already provide your Amazon store with a reliable revenue stream, you not only deliver to market demand but ensure that you have the financial runway required to take risks on innovative new products, if need be. 

Review your financial statements every quarter and look at the items that are performing best in your store. Think about how you can continue to market these with ads, SEO keywords and upgraded images to maximize their selling potential in your online store. 

12. Sync your inventory

Inventory can be a delicate balancing act. Hold too much inventory for too long and you need to pay over the odds to store it. But hold too little inventory and you lose out on vital sales, or even customers, due to an inability to fulfill. Amazon can also penalize you if your inventory performance isn’t up to standard.

Stock control is something every seller needs to understand and have the capability to manage for optimal results. Smart inventory management is an under-appreciated way to increase your Amazon sales and profit margin. Fortunately, there are tools that can help. Investing in the right tools and software can help sellers take the stress out of balancing supply and demand.

13. Expand into new Amazon marketplaces 

Amazon currently has 20 marketplaces around the world, which include the US, Canada, Mexico, UK, France, Germany, Italy, Spain, Japan, Singapore, Brazil, Australia and more. 

You can scale your brand by moving into some of these marketplaces. This can involve doing market research to find out which products are popular in each market and then uplevelling your shipping operations in order to be able to ship globally.  

But expanding into new markets also means you’ll need to take language into consideration and localize your listings so that they feature each marketplace’s local language and SEO keywords in the appropriate language. Multilingual customer service is also needed in order to be able to service customers across various marketplaces in their local language. 

Sounds complicated? It doesn’t have to be. eDesk’s help desk solution is designed to support customer service and workflow in multiple languages, so you can expand your business without investing in the overhead of hiring a global team. 

14. Spy on your competitors

Ok, maybe “spy” is a bit of an exaggeration, but profitable sellers are always on the lookout for what their competitors are doing. You want to make sure you’re offering the right inventory for your market at the right prices. Repricing software will monitor this for you, taking the guesswork out of pricing at the right levels. 

Using data gleaned from helpdesk reporting can also help you gather valuable insights and feedback from your customers, which will help you to better understand what customers want and need. Acting on analytics-driven insights from easy-to-read reports means you’re always one step ahead of the competition. 

Final thoughts

The quest to increase your store’s Amazon sales doesn’t need to be an uphill struggle. There are many resources available to Amazon sellers today to help them optimize their store and develop a healthy sales pipeline. 

By staying in touch with how the Amazon platform grows and using the right tech tools to drive your business, you can continue to do what you do best: building a great brand, winning customers, retaining existing customers and improving your bottom line. 

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