e-commerce business is growing. You are bringing in more customers, generating more sales, and adding to those all-important revenue numbers. While all of that is general, this growth poses new challenges you must overcome. One such challenge is setting up a warehouse.

If your e-commerce store sells physical products, more stock will naturally be required when your business grows. The result of this is going beyond your current storage means. No longer will your home or office be sufficient. You need to move operations over to a warehouse.

Of course, this is no small undertaking. It demands a lot of effort to get it right. For some assistance, this guide details how to set up a warehouse successfully for your e-commerce business.

Consider the cost

Before anything else, you have to factor in the cost that comes with adding a warehouse to your operation. Whether it is being purchased outright or leased, it will have a significant impact on your finances. This is the case when considering additional expenses such as equipment and employees.

As a result, you have to make sure it is a viable option for your business. If you do not believe you can generate the additional revenue to cover all of these costs, it is best to put your warehouse plans on ice for the time being. The last thing you want to do is go too big too soon, which will only jeopardize your e-commerce store.

Decide on the space required

For any warehouse planning strategy to succeed, you must pay careful attention to the amount of space required for your business. Pick a warehouse that is too big, and you are paying for unnecessary space. Go too small, and you will not have enough space to store your goods and move around comfortably.

To calculate how much space is required, work out the number of pallets and cartons you expect to carry at any one time. You then multiply this figure by the footprint of your standard pallet or carton. Keep in mind this figure will likely go far beyond your warehouse’s total footprint. The reason is that you should calculate your storage space in cubic feet due to the likelihood of using shelving and vertical storage systems.

Another point to remember is not to only think about the storage space you require. You have to incorporate your warehouse operations into the equation. So when drawing up plans, you must figure out the space necessary for your employees to move around comfortably and complete their tasks.

Select a location

Location is another point you have to ponder when setting up a warehouse for your business. Aside from being convenient for employees to reach, the right location helps to reduce logistical costs. This is the case when you are positioned in an area, one near major transit systems, that is closer to your customers. This reduces transportation costs while ensuring customers get their orders delivered fast.

Choose your equipment

You need the right equipment for your warehouse to operate efficiently. The equipment you select is dependent on aspects such as your business model, product types, and volume. Although when it comes to an e-commerce warehouse, the general goals are the same: improve visibility and efficiency, maximize space, and operate in a safe manner.

The general equipment requirements fall under four categories:

  • Storage: This type of equipment includes the likes of drawers, small bins, racks, and large shelving.
  • Material handling: This includes all the equipment needed to move your goods. This can be positioning equipment, unit load equipment, and transport equipment.
  • Packing and shipping: When preparing your goods ready for shipping, you need the right packaging and labeling equipment to do the job.
  • Inventory management: Inventory management software is a necessity. This allows for real-time tracking of your stock levels, ensuring customers don’t order anything that is unavailable and you know when to reorder a fresh batch of products.

Optimize performance

You have the warehouse space. You have the equipment and structure. However, there is still work to be done to optimize overall performance. This is why it makes sense to work with a distribution consultant to improve warehouse management efforts.

Doing this from the start can assist with ironing out possible inefficiencies and errors as soon as possible. The result: you are able to reach the performance levels you expect from your e-commerce warehouse. A consultant can determine what is working and what is not and create a strategy that ensures your warehouse operation is hitting all intended goals.

A lot of work is required when it comes to running an efficient, productive warehouse for your company. A specialist consultant will be able to review all points, big and small, to ensure nothing is missed.

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By T.R Powell

Technology writer and part-time blogger.

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