Skip to main content
Blog eCommerce

eCommerce Warehousing: The Whats, Whys and 7 Hows

April 21, 2021
Vibha N

Warehousing has come a long way. Starting from humble beginnings as repositories for food and grain, to becoming a central facet in supply chains across the globe, it is undeniable that warehouses have always played an exceedingly important role. All the more so, since the rise of eCommerce around the world.

This holds true even for eCommerce businesses. The facts back this up: it’s estimated in the United States alone, 1 million square feet of warehousing space will be required by 2025, due to rapid growth in eCommerce. With all that space, comes the task of managing it correctly. This is where warehouse management comes in.

What is eCommerce Warehouse Management?

Warehouse management is the steps taken to ensure that a warehouse is organized and optimized. When done well, the warehouse becomes a contributor to ensuring that your eCommerce products reach your customer on time and in good shape.

The process of warehouse management includes tracking your inventory as it enters and leaves, ensuring that it is stocked and laid out optimally. Additionally, it oversees the stock and maintenance of equipment used, the labor using them, and shipment of the goods.

Why bother with eCommerce Warehousing?

Because it has the potential to impact your online business for the better. Or, to put it less briefly, it can help you:

  1. Ship faster
    By planning your warehousing model and locations, you can ensure that your customer receives their purchase sooner rather than later. Customers do not like to wait, and faster shipping can help ensure they come back to shop from you.
  2. Protect your goods
    Whether your products have a long shelf life or not, they would require protection from the elements and other risks such as theft. Execute warehouse management well enough and you can also minimize damage and loss of goods.
  3. Track your inventory
    Be aware of the ins and outs of products being sold, understand products are performing better, and strategize to maximize the efficiency of this flow.
  4. Get more for your buck and minute
    Warehousing done right can ensure that you are able to assign human, machine, and product resources in a way that allows for minimizing loss of money and time.

How’s warehouse management different from inventory management?

Inventory management

concerns with the storage and flow of the business’s products post the sale of the product until its shipping. Its focus centers entirely on the effective storage and movement of the products kept in the inventory.

Warehouse management, on the other hand, deals with this movement, but also the elements interacting with the products including the people, equipment involved, and the warehouse itself.

Recommended reads: 11 Software That Can Up Your Inventory Management Game

eCommerce Warehousing Models for Product Storage and Shipping

The methods used to manage eCommerce warehouses depend upon the model that has been adopted for warehousing. Broadly, there are three kinds of warehouses:

Third-party warehouses

These are owned by the government or private organizations and are leased out to businesses. They save businesses capital otherwise spent in initial investments and sometimes even property taxes. They are ideal for short-term warehousing and allow easier relocations should the need arise. Some even include value-added services. Smaller businesses may even opt for consolidated warehousing, which offers a more economic alternative by consolidating shipments from multiple vendors being shipped to the same location.

Private warehouses

This model has organizations use warehouses owned by the business. Being proprietorship warehouses, by nature they allow for more control over the space, its use, and other factors impacting the productivity of the warehouse. If used right, the warehouse may even prove to be less expensive in the long run, though they do bring associated risks entirely upon the owner.

Cooperative warehouses

Under this model, a cooperative owns the warehouse, sharing risk and costs accordingly among members. While non-members may also make use of these warehouses, members are usually able to avail the space at comparatively reduced rates.

Aside from those mentioned above, there are alternatives that offer specific advantages and offerings, including:

Distribution centers

These centers cater to rapidly moving inventory and are thus opted by organizations selling products with shorter shelf-life like food items. Some also offer services such as packaging, product mixing, order fulfillment, and more.

Bonded warehouses

This type of warehousing allows importers means of storing their products over a longer period of time and/or modifying them, all while remaining duty-free until purchase.

Smart warehouses

Artificial intelligence and machine learning make their presence known in warehousing quite loudly in smart warehouses. True to its name, this kind of warehousing makes the use of technology and automation to a larger extent, including for delivery.

How to improve your eCommerce Warehousing efficiency

Maintaining your eCommerce warehousing plans is a continuous process. Here are a few tips to keep in mind while planning your warehouse management upgrades:

Go for lean inventory

In other words, ensure you have only the amount of inventory your customers need. This is tricky, as you would need to balance your stock with demand such that there are no shortages, but also minimizing excess stock. A lean inventory will reduce your expenditure on warehousing, and free up space for safer movement inside the establishment.

Upgrade your tech

Ensure that all your equipment is up to speed with the work required of them. In addition, seek out options to automate viable processes as well, freeing up time, resources and reducing redundancies and errors. The use of Warehouse Management Software is one such option, with the industry offering plenty to pick from. Ensure that you deploy the best options available to you for the security of your warehouse and products as well.

Simplify processes

In addition to automation, aim to reduce the number of steps involved in the various processes that take place in warehouse management. Whether it is regarding the movement within the building, examining production flow, or reporting: keep it simple, silly!

Use your space wisely

Even if it’s not rented, assume that every square foot of your eCommerce warehousing is chargeable, and ensure your products and equipment are arranged to make the most of it. Understanding the flow of goods will also help you place your products optimally.

Train your people

Ensure your teams are up to date with the industry’s best practices. This may include investing in their training and upskilling to ensure they contribute in the best way they can, in the safest way they can. Incentivizing also helps motivate teams to perform better. Mold leaders from within the team, and watch them flourish even more.

Lockdown your KPIs

Decide the key factors best suited to measure the performance of your eCommerce warehouse management strategy. These will rely on your current circumstances and short and long-term expectations for the business. Here’s a handy guide to eCommerce KPIs that might help you determine the right ones for you to be keeping an eye on.

Review regularly

Ensure you are monitoring the performance of your eCommerce warehousing efforts and identify those that are working best for you, and areas that would need improvement. This also includes ensuring your equipment and machinery are well-maintained and being used well. It best to seek objective facts and data to support your observations which will support continuous improvement.


eCommerce warehousing is not an easy endeavor. It requires dedicated resources, human capital, and continuous monitoring to ensure that the methods you are applying are working in your favor. That said, these are steps that—when done well—will pay off in the not-so-long run. They help minimize losses to products and those caused by over-stocking, or worse, under-stocking (the word ‘stockouts’ causes displeasure on sight for a reason, after all). Efficiency becomes the name of your game, whether it is the movement of inventory, the safety of your team members, or your experiments with business improvements.

Finally, eCommerce warehouse management can help your online business not just make the most of opportunities coming its way but identify new ones to leverage.