April 22, 2021
E-commerce logistics: which storage solutions to choose?
Discover in this article all the issues of storage in e-commerce logistics.
E-commerce logistics: challenges and definition
E-commerce logistics or e-logistics is defined as all physical flows (inputs and outputs) of an online store, and therefore any company that sells goods via the Internet. It involves, among other things, the storage of goods. The specificities of e-commerce logistics are numerous, and e-commerce logistics storage hence comes with specific requirements. For an optimized management of flows, it is essential to employ specific processes and to set up actions adapted to your e-commerce activity. And for good reason:
According to the Federation of e-commerce and distance selling (FEVAD), internet sales have increased by more than 32% in recent years.
Consumers who buy via the web are increasingly demanding in terms of criteria such as delivery times. The competition is becoming tougher: e-shops have to stand out especially when it comes to user experience which includes the delivery of goods.
The implementation of a returns management policy is becoming more and more important, especially when it comes to online sales, since the chances that the product shipped does not meet the customer's expectations are increased in the case of an online purchase.
For this reason, the logistic management of your e-commerce and more specifically the storage is a factor of prime importance in the optics of a successful development.
E-commerce logistics: what are the challenges for the storage of your goods?
If it is true that the function of an e-commerce logistics provider is far from being limited to storage, it remains that this element occupies an axial place. When deciding to outsource your e-commerce logistics, the first question you legitimately ask yourself is related to the storage of goods. In particular, if you are a cross-channel or omni channel player, the logistic needs can be of various kinds.
The main storage management methods
There are different storage solutions depending on the type of activity and the type of replenishment. Among these solutions, there are :
the minimum stock formula: a request for replenishment is made as soon as a defined threshold is reached,
the just-in-time: the restocks intervene as soon as a new order is placed,
First In First Out or FIFO: this option is generally used for products with expiration dates.
The importance of efficient logistics tools for optimized storage management
Storage occupies a strategic place in any e-commerce supply chain. As a consequence, sophisticated tools must be used for a good stock management specific to your online business. An effective and efficient e-commerce logistics partner must therefore have a powerful warehouse management system (WMS):
the movements of the goods must be recorded and consultable on an online platform;
the principle of Web services must be used for a constant update of the entries, exits and stock in place;
The WMS must be linked to the customer's e-commerce management system, so that the customer always has a precise idea of all flows and storage in place.
E-commerce logistics storage: in-house warehouse or storage with a logistics provider?
By choosing to manage your own warehouse, you ensure that you have end-to-end control over the stock. Flexibility and reactivity on the management of logistics are two big advantages that go with this mode of organization. Also, you have total control over the preparation and packaging of orders, which generally allows you to push the personalization further than with an external provider. You also choose the carrier. For a company that is just starting out, in-house management can be a good option, especially since it allows the project to grow at your pace.
However, it is important to keep in mind that an in-house warehouse has a cost, involves the management of employees and can be very time consuming as the company grows.
The advantages of logistics outsourcing
If you don't want to be burdened with the task of storage and the constraints of transport, it is convenient to entrust the logistics operations to an e-fulfillment provider. A logistician has the B2C and B2B expertise needed to optimize processes and flows. He can help you to grow your sales more serenely and and focus fully on increasing your turnover. Moreover, logistics outsourcing is an alternative that can be advantageous in terms of cost, while saving you time.
Dropshipping: an alternative to storage
More and more present in the digital ecosystem, dropshipping is a form of logistic organization that puts in relation the customer, the reseller and the supplier - the reseller being the dropshipper. The dropshipper acts as an intermediary between the end customer and the wholesaler. The wholesaler takes care of all the logistical steps: picking, packing, storage, shipping, delivery, etc. If you act as a dropshipper, you have several advantages:
no investment in stock,
great ease of doing business,
almost no logistic constraints,
flexibility in the daily management of the business.
However, this option does not allow you to have a good visibility neither on the quality of the goods, nor on the storage, nor on the delivery times.
Chaotic or stochastic storage
Cubyn has been a logistics expert for many years and offers a service that puts data at the heart of all processes. As a technology company, Cubyn uses WMS systems to optimize all aspects of e-commerce logistics.
For the storage of its customers' goods, Cubyn has opted for a rather singular method: the so-called stochastic or chaotic storage. This method saves a considerable amount of time and allows for very short picking paths, since the stocks are arranged randomly. Chaotic storage consists of three main steps:
The product to be stored is placed in the first available location and is then scanned, using a barcode.
Using GPS software, the pickers or order processing teams can easily orient themselves to the items to be selected for sale. Each time a product needs to be removed from stock, it is scanned so that the location is declared free.
Finally, the packaging teams are involved in tasks such as packing and conveying.
Stochastic warehousing helps to optimize logistics processes and reduce picking times.
At Cubyn, all product and inventory information is made available to e-merchants via a sophisticated e-commerce logistics platform. The use of state-of-the-art technologies such as picking algorithms, smart carrier allocation and integration with sales platforms via marketplaces or CMS allows Cubyn to offer a complete fulfillment solution: quotation, inventory, integration with customer management systems, receiving, storage, packaging, order picking, shipping, real-time inventory tracking, delivery and customer service.