Warehousing Options for eCommerce Businesses
Top Shelf Brands Has Moved
The Halloween season is a busy one here at Top Shelf Brands, and this year brought added responsibilities to the table with our recent warehouse move.
You may have noticed our posts about moving late September into our new united warehouse location, where both our office and warehouse teams will be able to work more efficiently together. This was an important step for us, and completing it so quickly during the Halloween season is a feat we can credit to our company-wide sense of responsibility and haste.
Everyone pitched in where necessary to facilitate a fast move, and hit the ground running to give us our most profitable season yet. In fact, we elevated our sales compared to last year by 144%!
Warehousing in ecommerce
Top Shelf Brands quickly scaled out of our previous warehouses, which could not accommodate for our recent partnerships and inventory. To put it in perspective, our new warehouse is 583% larger!
The new space and organization has been a huge asset for our warehouse team. It goes without saying that bigger is often better for warehouses, but our primary focus was adequate floor space. Floor space is crucial in warehousing environments, because that is the immediate destination for incoming shipments. When there is enough floor space outside of stacked storage, you can accommodate a larger volume of same-day shipments than an area that relies more on vertical space. How your warehouse is laid out can make a huge difference in the speed at which tasks are accomplished, and relying on too much machinery can create slowdowns that your business doesn’t need.
“All the product is right by our production team,” says Trevor Burch, VP of Warehouse Operations, “Our warehouses used to be separate, and any time the production team needed something we would have to drive across the street and bring back pallets one-by-one. Now, it’s all right here.”
When you think of eCommerce, you don’t often think of physical warehouses, but that is one of the most important services you can offer your brand partners. Warehouses serve as a singular hub for shipments, and a perfect place to assess things you otherwise wouldn’t have control over - like checking for damaged product or correcting wrong shipments. This is also the prime opportunity to customize your packaging with stickers or inserts related to your company, which establishes customer recognition and encourages loyalty. Rather than sending product straight from the manufacturer to the customer, or straight to commercial warehouses for fulfillment, this strategy gives you full control over how your product meets the buyer. At Top Shelf, ensuring high quality standards is essential to our business.
“We go above and beyond as far as prepping our products goes. Each individual product is checked, it doesn’t matter if there are ten or a million of them - every product comes out of that box,” says Trevor Burch, “We have never had a complaint about damaged product coming out of our warehouse.”
When our products are fully-checked, they are prepared for shipment to either a customer or to Amazon for fulfillment purposes. We take extra precaution in our shipment preparation, using protective wraps and buffers to ensure the product is in pristine condition when it arrives to its destination.
When using your own shipping services, or even when relying on FBA (Fulfillment by Amazon), you are responsible for the state of a product once it reaches a customer. Being able to have in-depth knowledge on your stock, such as when it arrived and how it was packaged, can protect you from negative claims that may affect your company’s reputation. You are also able to cross-check claims, and issue item replacements much faster than if you had to relay that information through a second-party warehouse.
Now, we mentioned a crucial part of warehousing earlier: Fulfillment by Amazon.
This is the secret that boosts eCommerce sales and brand reputation on easily the most important platform for online selling, but it can be hard to manage. How is that?
fulfillment by amazon (Fba)
Fulfillment by Amazon (FBA) is exactly what it sounds like: Amazon takes care of the final leg of your product’s journey to the consumer. There are some huge benefits to doing this, besides just having a stronger guarantee that your product will be shipped safely and on time.
FBA orders often qualify for discounted shipping rates, which are highly valued by the consumer. A recent study revealed that 80% of Americans rank fast, affordable shipping as one of the top influences on their online shopping habits. With FBA, your products can even be eligible for completely free shipping, which makes it hard for other sellers to compete with you. The most important shipping offer guaranteed by FBA is Prime’s free two-day shipping. With over 50% of households in the US holding Amazon Prime memberships, this is infinitely important for boosting your seller rating.
Using FBA also provides your product with easy customer service and return options. Simply using their Amazon account to issue a return or ask questions is easier for customers than searching for your contact email or number within your seller page. Amazon has a notoriously simple return system with labels that the customer prints out themselves, which takes all the work out of having to figure out logistics for the item’s return to you. This is one less step that both you and the customer have to worry about.
There are costs associated with FBA, which may not make it the best bet for every business. It is crucial that you discuss these costs with your eCommerce partnership to determine whether their sales volume will offset the extra shipping costs, or if using your localized warehouse for shipments is the safer deal. Amazon determines cost by the size and weight of your item, as well as the time of year you are conducting shipments. Naturally, Amazon has an extremely busy holiday season (their 2017 holiday saw a 70% increase of purchases using their app) and raises costs on storage and shipping due to high demand. Additional fees also apply for a variety of circumstances, such as oversized items that require special handling fees to reach the customer.
One thing to pay attention to with your partnered businesses is how quickly they expect to deplete their stock. This is because Amazon will charge additional fees for inventory that they store for six months or longer, and those fees only go up during peak seasons. Warehousing with Amazon is just like using your company’s personal warehouse; space matters, and you have to be diligent about how it’s used. Businesses that don’t move product quickly, or cannot offset the additional fees of FBA shipping, are probably best handled by your personal warehouse.
The space between manufacturer and customer is entirely dependent on how you manage your warehouse setup, whether that means using a personal storage, warehousing through Amazon, or a mix of the two. Many businesses see success with the latter model, especially when working on several different online marketplaces at once. FBA does offer shipping services for non-Amazon stores like your personal website, but they do not commingle with shipments from orders placed through their marketplace competitors, like eBay or Walmart. In this case, it may be smarter to have both FBA shipping capabilities as well as your own in-house system.