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Use a Warehouse Management System to Increase E-Commerce Growth

By Erhan Musaoglu logiwa-blog-author | Tags: Warehouse Management eCommerce

As you probably realize, e-commerce is a highly competitive space You have to focus on sales and marketing and their associated costs. If you don’t spend enough on sales and marketing, your competition outpaces you. You’ll have a hard time growing and selling more. If you could increase your profit margins, you’d have more money to spend on sales and marketing.

However, that high level of competition we mentioned earlier won’t allow you to set high product prices to gain high margins. E-commerce businesses have a few required operation costs. Two primary ones are inventory holding and operations costs. You can’t just slash your operations costs without assessing the possible consequences. One of the ways you can increase your profit margin is by integrating a warehouse management system (WMS) that improves your warehouse performance. Efficient warehouses cost less to run, which gives you more to spend on growing your e-commerce business.

BONUS: Before you read further, download our Warehouse Management Software Whitepaper to see how Logiwa uses real-time data to help you get up to 100% inventory accuracy and execute advanced fulfillment strategies like wave planning.

Efficient Warehouse Management is Your Key to Success

A WMS helps e-commerce companies by providing access to real-time and accurate data such as:

  • Inventory numbers

  • Order status

  • Order fulfillment and shipment

When you have a WMS that connects to your e-commerce store and other sales channels, you avoid overselling. A good warehouse management system pushes accurate inventory data to marketplaces and shopping carts. With accurate inventory and order data, you can improve your forecasting accuracy and optimize your inventory levels. You’ll hold the right inventory mix and quantity and minimize your inventory holding costs.

Also, your customers are provided with on-time and accurate data for their orders and shipments. So you create happy customers by providing better customer service.

Finally, e-commerce businesses save more when their warehouses efficiently use their operational resources and manpower. This is one of the real gains of using a warehouse management system for e-commerce business. Don’t settle for only scanning barcodes and monitoring inventory levels. The warehouse management system you choose should add tangible value to your business.

good warehouse management system

Picking the Best Warehouse Management System for Your E-commerce Business

Choosing the best warehouse management system for your business isn’t an easy task. You’ll need to determine which features are most important to you and your business. Do you know what to look for in warehouse software? What about telling the difference between systems?

You’ll soon discover that price isn’t the only factor. Expensive warehouse management system doesn’t make it the best for your business, or even the best in general. However, there ARE ways of finding the perfect system for you. Here are a few key traits to look for in a good warehouse management system:

Accuracy From the Beginning Will Save You Headaches in the Future

You need accuracy from start to finish. You want a minimal amount of errors per order line. That’s an important WMS feature for retailers. Your WMS needs to record your inventory transactions properly, with the smallest amount of mistakes. By checking this key component, you will save yourself damage-control time in the long run. One inaccurate number can ripple through your entire supply chain for that product.

Some WMS Options Are More Cost-Effective Than Others

One of the easiest ways to ensure cost-effectiveness is by choosing a cloud-based option over an on-premise system. You’ll spend less on a cloud-based warehouse system than licensing an on-premise system because the investment and implementation are far cheaper. Often you’ll have more tools at your disposal without worrying about hardware costs. Your cloud-based WMS provider should constantly update your system with the latest and greatest features. Then you’ll always have the most up-to-date version of the system without any re-installation hassle.

Do You Need Your WMS to Integrate with Your Sales Channels?

Whether you are a retailer or supplier, your warehouse software should adapt to any customer need. It should integrate with various shipping platforms, such as:

  • UPS

  • USPS

  • DHL

  • FedEx

Every online retailer has a different shipping carrier, so make sure that your warehouse management system is flexible enough to integrate with that, as well as your inventory, purchase order and order processing systems.

Better Warehouse Performance = Higher Profit Margins: Logiwa syncs accurate data across your entire interface so the inventory numbers you see on your dashboard are what your employees see on their devices. Learn how Logiwa uses real-time data to help you get up to 100% inventory accuracy and 2.5x shipments.

Real-Time Data and In-Depth Warehouse Activity Records

Finally, a good warehouse management system should be transparent and provide information on-demand. It should allow you to view your inventory in real-time. Look for a warehouse system that provides real-time reporting, as well as a clear view of the date and time of warehouse and fulfillment activities. This way, if you find a problem, you can easily trace it back to it’s source.

In-depth warehouse data and reporting helps you make better decisions regarding your inventory levels as well. Inventory represents tied up capital. Excess inventory can quickly harm a healthy business. Inventory incurs indirect and direct costs. Some direct costs would be things like warehouse rent and utilities. Indirect costs include things like the taxes you pay to move that inventory.

Granular data helps you adjust inventory levels and increase forecasting accuracy. When you overstock on inventory, you run the risk of obsolescence. Then you’re left with inventory you can’t sell. Other types of technology upgrades, like RFID scanners, can help you track your inventory, eliminate excess, and avoid lost inventory. Excess and lost inventory impacts all businesses, no matter their size. Large businesses can normally take the hit better than small e-commerce businesses though. Upgrade your warehouse and inventory systems sooner rather than later.The ultimate purpose of a good warehouse management system is to make warehouse management worry-free—does your system do that for you? Logiwa’s multi-channel inventory management system checks all these boxes and more. Our B2B and B2C cloud warehouse management system is one of the most advanced systems around. Check out what Logiwa can do for your ecommerce business.

Increase Your Margins with the Best Warehouse Management System for Your Business

Agile e-commerce companies sell more products by building supply chains that place customer service first. Quick and efficient work in your warehouse is part of your customer service. You need a WMS that understands that it’s not about your company. It’s about getting that product into the hands of your customer. It’s about meeting their expectations for quick and accurate service.

Sell More By Lowering Your Logistics Costs

E-commerce is very dynamic. Very different than the commerce environment 50 years ago. When your sales and marketing departments make changes, the e-commerce supply chains must respond quickly to those changes. The definitions of marketing and supply chain management have become very similar in recent years. Today’s e-commerce supply chains need the agility and responsiveness only found in the most advanced warehouse management systems.

Advanced warehouse management systems allow you to execute advanced fulfillment strategies like rolling-wave planning. The sooner you can move inventory out of your warehouse, the sooner you can replace it.

E-commerce companies have two cost groups that demand the highest capital portions: marketing and logistics. These costs directly affect their margins. The competition for e-commerce companies is primarily based on pricing. The logistics management systems, especially warehouse management and order fulfillment systems, can achieve 15-20% logistics cost savings in e-commerce operations. When an e-commerce company achieves these savings, there are two ways that they will go to stay one step ahead in the competition.

Since lower logistics costs increase their margins, either they can be more flexible with their pricing or they can spend more on marketing. Either way, they’re able to sell more.

increase profit margins with warehouse management system

Scale up your Retail Business with the Right WMS Solution

Reduced operational costs increase your margins. This freed up capital shows up either in price elasticity or increased marketing budget. Logiwa leverages retailers’ sales through optimized margins by harmonizing all sales channels within the same supply chain and allowing you to scale your supply chain. Let’s take a look at some of the ways Logiwa improves your warehouse’s operations.

Faster Fulfillment for Lower Cycle Time

Cycle time is the new key performance indicator KPI of retail and e-commerce. It represents the frequency of order shipment. The lower the cycle time, the faster the fulfillment operation is. Logiwa reduces your cycle time with adaptive and smart logistics systems. Reduced cycle times bring costs down by lowering how long you keep inventory. A great example of this is Henry Ford’s Model T assembly line. His factories produced a car in 24 seconds through synchronization of 84 steps. He reduced his costs by 65% and assembly time by 80%.

There are a few different ways to measure cycle times:

  • Customer Order Actual Cycle Time: The average time taken from when a customer places an order to when it is delivered.
  • Cash to Cash Cycle Time: The amount of time between paying for raw materials and receiving payment for the finished product.
  • Supply Chain Cycle Time: The total time required to fulfill a customer order if all of your inventory levels are at ‘0’.
  • Customer Order Promised Cycle Time: The expected time of delivery after a customer places an order. You will compare this metric with the Customer Order Actual Cycle Time.

Logiwa balances your supply chain by removing your bottlenecks and planning your resources. Logiwa offers “Bottleneck Solver” functionality, a state-of-the-art technology, to monitor, plan and manage your order fulfillment processes. By removing bottlenecks in your processes, Logiwa reduces your cycle time. We help you ship more.

Fulfillment Productivity Increases Customer Satisfaction

Seamless processes play a key role in fulfillment productivity. Enhance your fulfillment productivity to raise your customer satisfaction level and lower costs. Although your workforce is crucial for providing a great customer experience, smart logistics systems play a key role to enhance customer service and reduce costs by guiding your employees efficiently.We designed Logiwa‘s order fulfillment functionality to improve retail and e-commerce operations. Logiwa provides smart process designs with cutting-edge technology to make it seamless.

Accurate Transactions Keep Supply Chain Costs Down

Inaccurate transactions cause higher costs for your supply chain operations. When an inventory transaction is completed inaccurately, it means you will have to do it twice if you notice right away. If you don’t catch it, your company will experience bigger consequences such as shipping a wrong item to the customer and locking down a location for counting. Completing transactions accurately the first time definitely brings cost efficiency to supply chain transactions and obviously increases margins.

Bring control to your logistics and warehouse operations. You can configure Logiwa to grant users different privileges. With these accesses, the system won’t let users make mistakes. Logiwa benefits from integrations with various technologies to achieve accuracies such as a barcode system integration, voice recognition, pick-to-light, automated material handling, conveyor and sorter systems, and much more.

Ready to see the most powerful warehouse management software in action?

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Erhan Musaoglu

Written by Erhan Musaoglu

Erhan Musaoglu is the CEO and Co-Founder of Logiwa.