When thinking about ecommerce growth, many retailers look at improving website conversion rates or mastering their marketing strategy. Often, very little thought is given to their warehouse operation.
Yet a sub-optimal warehousing system can be a huge drain on time and profits. You may also needlessly miss out on great opportunities like Seller Fulfilled Prime as well.
At Veeqo, we talk to dozens of ecommerce businesses every month. And in this post, we wanted to share three of the biggest warehousing mistakes we see retailers make. Plus, how to fix them.
1. An Inefficiently Arranged Warehouse
Arranging your warehouse effectively can be a monumental time-saver. But it’s all too common to see items not being stored in the most efficient locations for that business.
Depending on your current operation, this could take a bit of time and money investment to get right. But the time saved from simplified picking and stock taking makes this investment well worthwhile.
Some of the best ways you can start arranging your warehouse more effectively are:
Place your best sellers close to your packing desks
Research we carried out for our Definitive Guide to Picking & Packing ebook found that, on average, 20% of products made up 60% of sales for the retailers we spoke to.
So it makes sense to identify your best sellers and then place these as close to the packing desk as possible. This means pickers aren’t covering unnecessary extra distance when locating more frequently needed items.
For very best selling products, it could even be worth storing them on shelves right above the packing area itself.
Label areas of your warehouse
Once you’ve got these best selling items sorted, it’s important to ensure all other items can be easily located. This can be done by creating a set location name for different sections of the warehouse.
Think about the most efficient route around your warehouse when creating these names. It’s also important to keep the names short and exactly the same format across the entire warehouse.
For example, you could simply have row location followed by shelf location like this:
Or if you have a slightly more complicated warehouse then you can expand to having different warehouse and row areas:
Use a barcode system
Adding barcodes to items enables you to use a scanner to instantly identify any product in your system.
This is a lot quicker and easier than manually searching using a mouse or keyboard. It also reduces human error by ensuring the right products are picked and, therefore, fewer returns made.
You can generate your own barcodes. But it’s worth noting that you’ll need to buy unique, globally recognised ones if you want to sell across various platforms like Amazon and eBay.
2. Not Improving Your Picking Process as You Grow
Not many ecommerce businesses start out processing and shipping high order volumes right from day one. So it makes sense that time-saving picking processes are maybe not incorporated at this stage.
But not taking time to focus on this as the business (hopefully) grows, can be one of the biggest warehousing mistakes.
Our same research mentioned earlier showed that 60% of your pickers’ time is spent walking around the warehouse. So a more efficient process can help reduce valuable hours.
There are four main methods used by most medium to large ecommerce companies:
Single Order Picking
This method is fairly self-explanatory and is simply where orders are picked one at a time.
It’s great for startups who aren’t shipping many orders. But inefficiencies will appear once more frequent orders start coming in as pickers will be walking routes multiple times.
This is where the picker will be assigned a certain number of orders to pick in one go before returning them all to the packing desk.
The number of orders per batch depends on the size of your products as well as average items per order. This usually works out at around 10-30 orders per batch.
Batch Picking is great if you ship a high volume of orders with single or very few items in each order.
Each picker in this scenario would be responsible for their own warehouse zone. An order is then passed through all relevant zones to have its items picked by the pickers in each zone.
This can be useful to stop people getting in each other’s way if you have multiple pickers and a high volume of orders. But passing between zones can mean slightly delaying orders being shipped.
Wave Picking is similar to Zone except all zones are picked at the same time. Items are then brought to a packer who will consolidate all the separate picks for each order.
This is obviously a lot quicker than Zone Picking. But labour costs will increase as the packer will be spending more time combining orders before being ready to ship.
So this is a great option if you have a high volume of orders with multiple items per order and speed is more important than costs.
3. Not fully embracing digital
Using manual and paper processes in the warehouse is still the most common method for ecommerce businesses and this one of the most common warehousing mistakes.
But digital systems can vastly speed things up and reduce human error. This means you can reduce returns, save brand damage and improve ratings on marketplaces like Amazon.
For example, a digital barcode scanner will tell a picker:
- What and how many items need to be picked
- Where the items are located
- Confirmation that all items have been picked correctly
The packing desk can then also have its own dedicated piece of hardware.
Rather than manually using a bulky computer keyboard and mouse, the packer can use a scanner that automatically communicates with inventory management software to:
- Print packing slips and invoices
- Print shipping labels
- Mark orders as shipped
- Email tracking details to customers
Of course, systems like this will take some time and financial investment to get set up. But these are now much more affordable and no longer reserved solely for enterprise-sized companies with huge budgets.
So these are just three warehousing mistakes that we at Veeqo notice when it comes to warehouse management.