If you are setting up an online store, you must have a warehouse

Many e-commerce players start in a garage, basement or home. Those whose business succeeds must quickly search for a warehouse. There is always a dilemma: to build or to rent. Then, you have to decide on the optimal warehouse configuration that will speed up the handling of shipments.

The e-commerce warehouse is not just a warehouse. Treating shipping and returns as an additional cost is from a bygone era. Efficient service of the so-called first mile (from the moment of receiving an order to the parcel being picked up by a courier) determines the speed of delivery, and thus, is one of the pillars of competitive advantage.

E-commerce warehouse – bigger and more flexible than a traditional one

A classic warehouse with racks and pallet loads placed on them is not able to meet the needs of e-commerce. This results from many factors. The most important being the omni-channel model spreading very quickly. Support for multiple sales channels requires an easily adjustable and multifunctional space that can be flexibly shaped and quickly rebuilt. As a result, a warehouse for e-commerce is two or even three times larger than a traditional one. It does not concern only the total cubature of the building, but primarily the operating space where goods are received, picked and delivered.

An adequately capacious operating hall allows a significant time reduction while receiving large batches of products. It is also necessary for convenient distribution of goods on one level, which allows for instant order completion. A significant part of the goods, instead of being placed on shelves and then picked, do not leave the operating space. In this way you may reduce costs and shorten the time of order processing.

The warehouse service must be well designed so as to be able to cope with fluctuations in the number of orders. The key is the ability to handle very high volumes during holidays, sales or special promotions. So, with dynamic changes in the number of shipments handled, automation of processes becomes a necessity. Thus, packaging offers the potential for optimisation, especially the automation of the planning process. This is what packing algorithms are ideal for.

How to divide a warehouse into zones?

Your warehouse should be divided into various storage zones, strictly adapted to the various type of goods. So, you will need classic pallet racks, but also shelf racks, collective containers, racks for goods on hangers (mainly clothing) or places for storing items of considerable length.

An absolute must have in a warehouse should be a separate zone with equipment and materials for repacking, labelling and kitting, e.g. as part of promotional campaigns.

Another precisely designed zone (with convenient location and equipment) should be the place for the storage and distribution of leaflets, product samples, information materials or company gadgets. You should treat with equal importance, especially while handling large volumes of orders, the need to separate a place for parcel sorting and a buffer space for parcels waiting for the courier. Another task is to design and equip an efficiently operating returns handling area.

We have listed above only the most important zones of an e-commerce warehouse. In fact, there are many more. You cannot forget about the need for rooms for staff, equipped with sanitary facilities, social and office rooms.

The whole warehouse must be functionally designed and kept clean and tidy. Moreover, organisation of the work of the staff should be focused on working under time pressure and shortening individual process times. This is the only way to ensure maximum reduction in the order fulfilment time. The first mile is as important as the last. The latter is usually out of the control of sellers (unless they handle the entire logistics process themselves). However, the quality of the first mile processes depends to a large extent on the selection of the appropriate warehouse space.

A lease is for everybody

Finally, the dilemma – to build or rent a warehouse? This question is important in the case of large, fast-growing e-commerce businesses that have the appropriate investment capital. For smaller retailers, rental will be a far more advantageous option. Not only does it involve a smaller financial risk, but also enables you to scale easily to fluctuating needs.

There is always another option worth considering – the use of a fulfilment service, i.e. outsourcing of all shipping processes. This is a perfect solution, especially for companies that are entering the e-commerce industry.