Long-term success rarely comes without its setbacks. As consumers continue to embrace online shopping, small retailers and direct-to-consumer (DTC) brands are, on one hand, enjoying the revenue growth, yet on the other hand, struggling with order fulfillment and diminishing margins. In this blog, we’ll discuss how small retailers or DTC brands can set up an e-commerce fulfillment warehouse for success.
A recent McKinsey & Company report revealed that e-commerce demand has increased 30% over pre-pandemic levels. While that is undoubtedly good news for retailers and DTC brands, the report also suggested that the vast majority of consumers have little tolerance for long delivery times. Online shoppers have grown accustomed to getting the products they ordered within a quick delivery timeline that continues to get shorter and shorter. Therein lies the challenge; as an organization with increasing online order volumes, how do you make sure you can get your products in customers’ hands quickly without decreasing your profit margins?
You might consider hiring more warehouse staff to handle the higher volumes, but that will likely just drive up your costs, especially in today’s market where labor has become both scarce and expensive.
The right answer is to make your e-commerce fulfillment warehouse processes more efficient by leveraging your existing resources. To do that, you’ll need a warehouse management system (WMS) that is optimized for your needs and prioritizes speed, efficiency and accuracy for online orders.
What Is a Warehouse Management System?
In simple terms, a WMS is a software that optimizes your warehouse management processes. It tracks all your products from the time they come into your warehouse until the time they leave for order fulfillment. Your WMS knows where each item is stored in your warehouse and can create a streamlined workflow for how your staff picks and packs each order.
This means that after customers place online orders and these orders make their way to a distribution center (DC) for fulfillment, the WMS checks if the products are available and organizes a picking route based on your e-commerce picking method so that your employees spend as little time as possible preparing the shipment. As the items are all picked, the inventory is updated.
Why You Need a WMS
The reason for implementing a WMS in your warehouse boils down to two things:
Increasing customer satisfaction by getting them the items they want when they want it.
Improving your profitability by streamlining your e-commerce fulfillment warehouse
Small retailers and DTCs typically have to deal with a high volume of small orders, e.g., two of this item, three of that one, etc. The traditional way of handling orders like that would be to give your warehouse associates a clipboard with a printout of each item for each order. While that’s manageable on a small scale, it can be time-consuming and lead to mistakes as order volumes increase.
A better way to handle it is to implement an optimized WMS, such as the OmniTM WMS from Tecsys, which streamlines the fulfillment process through algorithms that prompt warehouse associates to pick multiple orders at a time. Equipped with a handheld scanner, the employee scans each item and receives instructions on which tote or section of a pick cart the item should be placed in. When scanning the items, the warehouse worker simply listens to the tone the handheld terminal plays to know if they’ve picked the right item, or if they’ve made a mistake.
A well-implemented WMS can also help you optimize the placement of items in your warehouse (e.g., high volume items are stored closer) so that the optimal number of items are located within the shortest possible distance.
Like your order fulfillment processes, the implementation of an optimized WMS needs to be quick and efficient. After all, there’s no better time than now for you to take control of everything in your e-commerce fulfillment warehouse from receiving, storing, picking, shipping and order returns, all while managing your business growth.
The good news is that it doesn’t need to be expensive (i.e., you’ll get a quick ROI) and you can be up and running in as little as 28 days!