Using multiple warehouses for order fulfillment is great for both you and your customers. By storing your products at various locations and shipping from whichever one stocks the item your customer has purchased, shipping will be faster and less expensive. But nothing good comes without some pitfalls. Managing inventory across multiple warehouses can be complicated and time-consuming. However, there are a few simple tips you can follow to maximize the benefits of using a multi-warehouse system for multi-warehouse selling.
Maintain Separate Product Counts for Each Warehouse
One of the biggest mistakes that ecommerce sellers using multiple warehouses make is only keeping track of inventory by product, even though that item is stocked in more than one location. While it’s important to have accurate product inventory, it’s even more important to know just how that product is distributed between your warehouse locations. That way you won’t run low, or run out of stock at one location while overstocking another.
It’s a delicate balance, and it takes time and accuracy to manage, especially if you aren’t using a software system that connects to your warehouse’s API. These will keep stock quantities across your warehouses updated in near real time.
Don’t Send Every Product to Every Warehouse
If your business carries a large number of products, some are undoubtedly slower moving than your best sellers. Try keeping your slow inventory stored in the same warehouse (with cheaper storage costs). Doing so allows you to send your best-selling items to multiple locations, giving you the biggest bang for your buck. Make sure as you transfer products between warehouse, you list them as unavailable on your multi-warehouse selling channels..
It’s also important to keep in mind that if a customer orders two products that are being stocked at different locations, you will need to ship and pay for both packing materials and shipping costs. Avoid that scenario as much as possible by grouping products commonly purchased together in the same warehouses. This can also be a great way to find natural bundled items to increase sales.
In order to keep your shipping costs at an absolute minimum, you can’t run out of stock at any of your multi-warehouse locations. Of course, if you run out at one warehouse, your product can be shipped from another, but you’ll probably incur increased shipping costs and delivery time. That may not be such a big deal, but completely running out of stock and having to backorder an item can be costlier for you, and cause your customer to become frustrated enough to shop elsewhere.
Manage this with proper forecasting. Monitor your sales across a 30, 60, and 90-day span and also calculate your supplier lead time. From there, you should be able to properly forecast for the quarter and prevent selling out of any products.
Choose the Right Multi-Warehouse Selling Inventory Management Software
Managing inventory across multiple distribution centers is made much easier by utilizing inventory management software that is designed for ecommerce businesses using multiple warehouses. In fact, finding the right software for your business can help with all three of the above tips. Be sure that the inventory management system that you use is advanced enough to help you manage the selection and routing of orders, which will optimize your savings on shipping costs – the whole point of using multiple warehouses in the first place.
Additionally, when you are looking for inventory management software, you want to choose one that offers you the following:
• At-a-glance visibility – When you started your ecommerce business, you likely were able to walk into the area where you kept your inventory and see exactly what you had. Now that your business has grown, your inventory is larger, and it is located in multiple warehouses. You still need to be able to see exactly what you have, and where it is, at a glance. Software that allows you to see those critical numbers quickly and accurately is vital.
• Room to grow – The scalability of your inventory management system is important as your business grows. You may start off with two distribution locations, but then quickly assess that you need a third. Your system must be equipped to handle the growth your customers demand.
• Integration options – The software that you choose must be able to integrate with the other systems you currently use. The goal of using inventory management software is to make your business more efficient and save you time and money, so it must be able to work alongside your platforms, marketplaces, shopping carts, and shipping carriers. Check out our list of current integrations and see how many tools you’re able to use in conjunction with ecomdash.
Using multiple warehouses to satisfy your customers comes with many benefits. Be sure to, keep your inventory management strategy crisp and effective. When you choose the right inventory management software, you are easily able to implement the above tips, and not only satisfy your customers, but also increase the growth of your business and your bottom line.