Businesses are only as efficient as the warehouses that store their stock and the software applications that keep track of supply chain logistics operations. Once your eCommerce business gets big enough that you can no longer fit all of the inventory in your garage, you must outsource processes such as warehousing and shipping to a third-party logistics (3PL) company. Successful 3PL enterprises manage their warehouse operations with warehouse management systems (WMS). These tools enable them to keep track of relevant information and control order management.
What is WMS?
WMS stands for warehouse management system. A WMS is software that helps you improve organization, visibility, and efficiency in your warehouse. Through integrations and automation, WMS helps you manage orders, stock levels, and shipments. WMS software with an intuitive user interface can be the solution you need if your current system makes it too time-consuming for employees to scan items and enter data about the locations and inventory levels of certain products. You can choose the features you need for your warehouse, and the WMS platform can integrate easily with the software that you already use for accounting and other business solutions.
What is eCommerce?
eCommerce is a general term for businesses that sell products on the online market. Some eCommerce businesses operate on well-known platforms like Amazon, Shopify, or Etsy, while others simply sell products through their own websites. Most eCommerce ventures start out as small businesses that offer a very limited number of products. In these cases, all of the picking and fulfillment of orders takes place in the business owner’s home or rented office space. If your eCommerce business has more customers than you have square feet of space in your garage, though, you will need to outsource order fulfillment and other warehouse processes.
Importance of Warehouse Management Systems for eCommerce Stores
In an eCommerce business, most of the work is taking place far from your location, perhaps in another state; this is just how the eCommerce industry works. Through your eCommerce platform, you see the customers place orders. When you integrate your eCommerce platforms with WMS, you get to see what is going on at the warehouse. It gives you a bird’s eye view of supply chain management. Just by viewing the analytics reports and watching the barcode scanning update itself in real-time on your dashboard, you get insights into what is going on with the movement of your products. You can follow the order tracking from the distributors all the way to your customers all over the world.
Efficiency and Productivity
The warehouse manager can quickly see how much more efficiently the warehouse operates once the companies have implemented WMS. With only a little bit of training, warehouse employees can use the WMS for all the tasks they need it for. Not every employee needs to be proficient in every functionality of the whole software suite. WMS enables warehouse workers to improve their speed and accuracy. Therefore, it enables warehouses and the eCommerce companies they serve to save on costs.
Inventory Management
Inventory management software, through ShipHero, NetSuite, or another major company, is a great addition to fulfillment centers. You will start to notice the benefits immediately. The software will help your warehouse and all of your employees improve their performance. Because of the reporting capabilities of WMS, you can start charting the improvement of your warehousing operations as soon as you install the software.
Order Accuracy
WMS is effective at reducing human error in all aspects of the warehouse’s operations, from putaway to packing. Mistakes in any area of the warehouse can lead to inaccurate order fulfillment. WMS can enable a 3PL warehouse manager to submit accurate orders to vendors, thus preventing overstocking. Retailers who use business software such as Oracle to manage their online sales marketplaces can also ensure that their customers are receiving the things they ordered with every delivery.
Cost Savings
WMS helps you save on shipping costs. For example, with greater order processing accuracy, you don’t have to do multiple deliveries just to ensure that one customer gets the correct box of products that he or she ordered. The employees’ mobile devices update their to-do lists in real-time. This enables each employee to fulfill more orders in a single shift. The WMS can quickly rearrange the workflow as necessary and communicate it to the employees in an understandable way.
Customer Satisfaction
Customers are loyal to certain brands not just because of the quality of the products but also because of the approach that the company takes to customer service. eCommerce brands with helping customer support, fewer errors in delivery, fewer delays due to stockouts, and more convenient shipping options can attract repeat customers as effectively as those whose products have the most snob appeal or sync with the latest trends. Installation of WMS is the first step to improved customer relationship management (CRM).
Scalability
Even when technology was not nearly as advanced as it is today, it was more cost-effective for businesses to operate on a large scale. WMS solutions make it easier to scale your business, whether your goal is to let the 3PL central team deal with all of the inventory control and supply chain optimization or to expand your operations into Europe, Canada, or anywhere else in the world. WMS offers you transparency about sales orders, workflows, and other steps in the supply chain, no matter how many different warehouse locations store your products.
Best WMS For eCommerce
ShipHero is the best WMS for eCommerce, but some other popular WMS are Edge, ShipBob, WooCommerce, and Magento. ShipHero offers you solutions for many different business processes. It includes multi-warehouse allocation management, inventory/order management, integrations with NetSuite and other major eCommerce partners. ShipHero has an advantage over its competitors when it comes to answering clients’ questions, knowledge of shipping management, and interacting smoothly with all of the devices and barcode scanners in the facility.
Understanding Different Types of Warehouse Management Systems
Not all warehouse managers should choose the same software solutions. Instead, you should consider the various pricing plans and decide which version of the WMS modules will help your warehouse staff complete their daily tasks and will provide important inventory information to help you focus on your business development planning goals and decisions. You should focus on paying only for the services you need and on a user experience that will make labor management easier by not alienating workers.
Standalone WMS
Standalone WMS is best for users who operate relatively small warehouses. It is a good choice if you don’t need one software suite to do everything. For example, maybe you already use QuickBooks for accounting, billing, and payroll, but you need the WMS to check the status of stock levels and replenishment. The size of your business makes a lot of difference regarding whether a standalone WMS is the solution to your inventory tracking problems.
Integrated WMS
Integrated WMS is useful for 3PL providers that manage multiple parts of the supply chain and must constantly keep their eyes on performance metrics. It handles everything from yard management and cross-docking to barcodes, batch counting, cycle counting, shipment tracking, and printing labels. Integrated WMS is useful for any 3PL company that employs complex fulfillment methods and deals with large amounts of stocks. Wholesalers and distribution hub warehouses alike can benefit from integrated WMS and the large number of features it enables you to access.
Cloud-Based WMS
If hardware is the backbone of your warehouse, then perhaps you should switch to cloud-based WMS carriers. Computer hard drives are easy prey for hackers. If hackers can guess one password, then they can breach all the devices on your network, and steal data that is worth more than all the goods in your warehouse. WMS with cloud storage is much better from a cybersecurity perspective.
On-Site WMS
If you have a mortal fear of Internet glitches, or if you just like to keep all the most important details stored on devices that bear your company’s logo, you can opt for on-site WMS. It has the same functions as cloud-based WMS and allows you to keep track of all the details of manufacturing and purchasing, even if it is not the wave of the future like cloud-based WMS.
How to Choose The Best Warehouse Management Software for Your eCommerce Business
Choosing the most appropriate WMS for your eCommerce business requires some research. Reading reviews of WMS platforms and watching promotional videos can only get you so far.
Evaluate Your Current System
Do you use any business software now? How well does it meet your needs? Which tasks are time-consuming to perform with your current WMS? How much do you pay for your current WMS, and how much return on investment do you get for it?
Identify Your Needs
In order to know what you want from a WMS, you have to know who you are as an eCommerce company. Some WMS were designed for warehouses that serve B2B operations and materials resource planning (MRP), while others are places for small businesses to park their lovingly crafted merchandise so that it can quickly reach their small but enthusiastic customer base. Which warehouse processes are you hoping to outsource?
Set Your Budget
One of the biggest mistakes you can make when buying business software is to pay for more features than you need. Don’t buy an iPhone or an Android when all you really need is a flip phone. When you set your budget at the beginning of the search, you cannot get too overwhelmed by the vast number of options. You can automatically eliminate the ones that are beyond your budget and only choose among the options that you know you can afford.
Check for Scalability
If you are still sending each package through UPS or USPS, will your WMS handle the distribution through automated processes? When you identify the needs of your business, you should think not only about your current needs but also your company’s short-term and long-term goals and how your needs will change as you achieve those goals.
Consider Integration Capabilities
How well the WMS integrates with other software applications that your company already uses is an important factor in your choice of WMS. Without seamless integrations, you will have to deal with time-consuming transfers of data and migration of files to the new system. This could consume a lot of time and cause disruptions to the operations of your warehouse.
Prioritize Ease of Use
The smartest WMS that can accurately predict what will happen at every point in the supply chain is useless if you and the employees of your warehouse cannot use it easily. User-friendly functions and an intuitive user interface are among the most important criteria for choosing a WMS.
Research Vendor Reputation
You should not base your entire decision on what you hear through the grapevine, but reading reviews of the WMS can help you decide. Look for reviews from companies that are similar to yours and pay more attention to general trends in the comments than to glowing praise or harshly-worded criticism.
Technical Support
Even the most user-friendly software will sometimes do things you don’t expect it to do, especially when you first get started using it. Technical support may be the second most important criterion after user-friendliness.
Request a Demo or Trial
No matter how many reviews you read, it is hard to know how easily you will get used to the software unless you try it out. If a WMS offers a free demo or trial, this is a mark of good customer service.
Assess Return on Investment (ROI)
Don’t automatically go for the cheapest WMS. Instead, think about how it will help you save on costs and increase your profits.
Key Takeaways
WMS can help your eCommerce business operate more efficiently, save on costs, and scale its operations.
FAQs
These are some common questions that eCommerce business owners have about WMS software.
What are Warehouse Management Activities?
Warehouse management activities are the tasks your employees must do to play their role in supply chain logistics. Warehouse management activities include cycle counting, putaway, and replenishment of stock levels.
How Much Does Warehouse Management Software Cost?
Most warehouse management software is available on a monthly subscription basis. The price per month varies according to which WMS software package you buy.
What are some Free Warehouse Management Software Options?
Some very simple business software applications are included with Microsoft Office, but these are only suitable for the smallest businesses. If your eCommerce operation is big enough to need warehouse space, you need a WMS subscription.
Contact ShipHero today for a demo.
