E-tailers are Scrambling for more Warehouse Solutions – Are You Among them?

In addition to struggling with issues related to logistics management expertise and software, many ecommerce businesses are stymied by the physical limitations of their facilities – so much so that the demand for major warehouse improvements is on the rise.
    
A recent survey from Zebra Technologies Corp, which polled 1,400 warehouse IT and operations management professionals, indicated that the worldwide demand for warehouse space and inventory management solutions is increasing. According to the study, 48% of participants said that they are currently working to increase their number of warehouses - while 76% plan to increase warehouses by the year 2020. Other interesting takeaways from the survey include:

Another study from CRBE also found an increasing demand for warehouse space, mostly due to a desire to improve reverse logistics efficiency.

In ecommerce, the sale often goes to whoever has faster, cheaper, and easier shipping options – and improving your distribution network through size and efficiency is a solid strategy for maintaining a competitive edge. If you haven’t done like the respondents to Zebra Tech’s survey and imagined what your warehouse needs will be in 5 years, you may get left behind. If you’re not sure where to start or what factors to consider, we’re always happy to help.

How to Get More Multi-Unit Sales

Every order placed on an ecommerce site generates expenses for order processing, packaging, and shipping. But when an order consists of multiple units, those expenses make less of an impact on the seller because the added price margin of those additional units increases overall profit. Use these ideas to entice sellers into buying additional units – allowing you to offset shipping and fulfillment expenses and maintain competitive pricing.
    

Minimum Order Discounts

You can use other coupons or discounts in place of free shipping, but according to a survey from UPSPulse of the Online Shopper, 93% of online shoppers are willing to take action in order to qualify for free shipping – so it’s perhaps the most effective incentive (it’s also more directly related to the costs you’re trying to offset). Amazon.com’s famously successful “free shipping on orders more than $35” is a great example. If your ecommerce site sells lots of low-margin items, this type of strategy may work especially well because customers will have an easier time adding units without overshooting the minimum order requirement too much.

Add-ons & Upsells

Use personalization algorithms to offer additional units based on items that customers have just purchased, or purchased over time. If customer data is unavailable, the next best thing is to offer upsells based on seasonality, since seasonal items are more likely to have universal appeal. This strategy also works very well with minimum orders – adding a “suggested items” section to your shopping cart page can help customers find products they can add to reach the minimum order size.

Product Bundles

Instead of asking your customers to add extra items to their carts, do it for them by bundling units together. Your ability to assemble product kits that appeal to customers will depend on the products you have to work with, but this is a common strategy for boosting multi-unit sales of nutritional supplements or other consumable type products.

Incentive Ideas for Increasing Sales

Ecommerce companies already use a lot of resources to get users talking about their products and interacting with their website. But sometimes, the best way to influence user behavior is to sweeten the deal. Use these ideas to recruit your customers into helping increase your sales and brand awareness.
    

Refer-a-friend

Referrals can be a great way to generate new business. Of course, if you incentivize your referral program, more people are likely to participate – and at higher volumes.

"Follow Us" Rewards

A simple way to boost your word-of-mouth marketing is to offer social media-exclusive incentives. Provide a coupon code, shipping discount, or some other type of reward to users who interact with your business on social media. Alternatively, running a contest or giveaway through social media can accomplish the same goals - more so if you offer a worthwhile prize.

Post-purchase sharing

Shoppers love to brag about recent purchases on social media. Some ecommerce sites prompt customers to share their purchases on social media immediately after checkout, but there are more effective ways to encourage your customers to talk about their purchases. You can include calls-to-action in your packaging such as social media instructions (“follow us at…”), post recommendations (“take a picture and tell us how excited you are to start using this product”), and hashtag suggestions.

Tips for Managing Excess Inventory

A continuous flow of inventory is a major goal for ecommerce businesses. But when seasonal, market, or other fluctuations negatively affect your sales, you may find yourself stuck with excess inventory. Consider the following tips to address the excess inventory you have, and keep more of it from building up.

Make a plan ASAP

The longer you wait to do something about your excess inventory, the more problems it causes by taking up space (which is even worse if you are leasing additional space just for excess), increasing taxes (if you wait until that time of year), and potentially devaluing (if the next iteration of a product is around the corner, demand for the previous iteration may drop even lower).

Liquidate in moderation

Perhaps you're willing to deeply discount excess inventory to get rid of it quickly. But, if you find yourself doing that on a consistent basis, it can spell trouble for your profitability. If you liquidate regularly, you’re losing out on profits without addressing the root cause of the excess inventory. Consider a change in marketing strategy to renew consumer interest, or move on to different product lines.

Partner with a charity

Donating your products can do more than just spread goodwill. If your business is eligible for them, the federal tax deductions you receive may even be better than what you’d get from liquidation. A gifts-in-kind organization can help you donate excess inventory to where it’s needed.

Optimize your Inventory Strategy

Because excess inventory can tie up your working capital and warehouse space, it’s best to try and avoid it in the first place. With Fulfillment Works, our state-of-the art inventory control management system is fully automated to help you manage your inventory by sending out real-time movement history reports, current usage analysis reports, and other metrics to maximize the efficiency of your inventory levels.

How Amazon forced Ecommerce to Evolve

From its humble beginnings as an online bookstore and throughout its steady growth into the titan of industry that it is today, Amazon has done a lot for the field of ecommerce. When Amazon started up in 1994, ecommerce was barely a thing and the Internet was still exotic and confusing for most consumers. In 1995, astronomer and author Clifford Stoll sneered at the idea of ecommerce, writing in Newsweek:
    
“We’re promised instant catalog shopping–just point and click for great deals. We’ll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. Stores will become obselete [sic]. So how come my local mall does more business in an afternoon than the entire Internet handles in a month? Even if there were a trustworthy way to send money over the Internet–which there isn’t–the network is missing a most essential ingredient of capitalism: salespeople.”

Amazon was one of the leaders in tackling the issues addressed in that sentiment. Over the years, Amazon refined their customer service offerings to earn shopper trust and loyalty, pushed the development of safe online transactions, and evolved to keep pace with consumer demand by increasing selection and reducing shipping times.

This growth had a two-fold impact. Firstly, it’s served as a model of success for countless ecommerce businesses to follow, while simultaneously creating the space for them to compete by increasing the popularity of, and demand for, ecommerce among everyday shoppers. Secondly, it acted as a catalyst for improvements in the supplier and fulfillment industries – driving down costs, improving logistics and inventory tracking, and spurring innovations to further increase the viability of the ecommerce industry.

Last month, Amazon.com celebrated its 22nd anniversary. The ecommerce industry has gone through so many changes in that time period, and Amazon has either been at the forefront of those changes, or been able to adapt to them successfully. And if Amazon’s track record is any indication, they’ll keep innovating for many more years to come.