Posted by Your warehouse is foundational to your eCommerce operations. An efficient setup is essential for managing inventory, fulfilling orders, and delivering a great customer experience.
But, as your business grows, your storage space may start to become cramped and inefficient.
If you’re feeling that squeeze, it may be time for a warehouse upgrade. Read on for 10 signs your current setup is no longer meeting your needs. When these flags pop up in your business, it’s a clear indication you need to plan a storage switch. By taking action now, you can avoid costly disruptions to your operations and continue to drive growth for your business.
1) Limited Storage Space
When you’ve maxed out your shelf space, and the warehouse resembles a storeroom from a puzzle game, you’ve hit a critical bottleneck.
A warehouse bursting with products impedes more than just the ease of movement — it impacts every logistical aspect of your operations. Inventory becomes more complicated to manage, and the time to process each order increases as workers navigate the cluttered space trying to locate and retrieve items.
The problem is multifaceted: On the one hand, there’s the physical limitation — there’s simply no more room for new stock; on the other, there’s the operational inefficiency of employees wasting valuable time, which directly translates to lost dollars.
Consider the ripple effects of pushing back deliveries because you couldn’t stock or pack items in time. The chain reaction leads to frustrated customers and weakened reputations.
2) Increasing order errors
Order mistakes are symptomatic of deeper issues within a warehouse and indicate your system is struggling to maintain accuracy in chaos. When the pressure mounts due to a lack of space, errors can creep into the pick-and-pack process.
These mistakes can be costly. The direct consequences include returns, reshipments, and refunds.
However, the indirect costs can be even more damaging in the long run. Customer dissatisfaction can lead to negative reviews and a loss of repeat business.
3) Inefficient Workflow
An efficient warehouse meticulously choreographs every movement for maximum productivity.
However, when space becomes limited, this carefully orchestrated dance transforms into a clunky performance. Inefficiencies in workflow, such as extended picking routes and prolonged loading times, impede operations and result in a backlog of orders.
A warehouse’s design must adapt to the business’s growth. Regularly reassess your storage space workflow to ensure it supports business growth.
4) Extended Order Fulfillment Times
Delivery times play a crucial role in converting prospective buyers into loyal followers. In an era of instant gratification, any delay can be the deciding factor between retaining a repeat customer and losing a potential sale.
Shoppers expect their products to be delivered within a reasonable time frame. If the wait exceeds their expectations, theymay cancel the order before it even reaches their doorstep. In urgent circumstances, they might even turn to a competitor’s website to procure the item promptly.
Prolonged fulfillment times not only compromise the customer experience but also lead to inflated costs as businesses resort to expedited shipping to meet delivery expectations.
5) High Turnover Among Warehouse Staff
A high turnover rate is often a red flag for underlying issues in a warehouse. Overcrowded and disorganized spaces can produce a stressful work environment, prompting employees to seek work elsewhere. The cost of constantly hiring and training new staff is substantial, not to mention the knowledge and experience lost with each departure.
6) Difficulty Tracking Inventory
When the aisles of your warehouse trigger a game of hide and seek to find products, it’s a glaring indicator that inventory management has diminished.
In an overstocked warehouse, items can end up in the wrong place or, worse, become lost entirely. That disorganization in turn hurts your bottom line.
Inventory inaccuracies lead to over-ordering, stock shortages, and even missed sales opportunities due to presumed out-of-stock situations.
Moreover, the additional time spent searching for products, which slows down the order fulfillment process and leads to faulty inventory data affecting purchasing decisions. These decisions can tie up your capital in excess stock or lead to emergency orders at higher costs.
Inventory issues can also undermine your stock forecasting and reporting, rendering your data-driven strategies ineffective and potentially causing considerable financial strain.
7) Safety Concerns
A warehouse’s safety protocols should be a fundamental component of its operations. But when space is constrained and every square inch is in use, safety can fall to the wayside, turning the warehouse floor into a minefield. The risk of accidents increases exponentially, and not just trips and falls, but the danger from overstacked items and poorly navigated machinery as well.
These safety concerns carry weighty consequences beyond the immediate risk of worker injury (which is paramount); there’s also the potential for costly workers’ compensation claims, legal liability, and regulatory fines if safety standards aren’t met. Additionally, indirect costs — such as employee apprehension and decreased morale, as well as the reputational damage to your company — can be significant.
This is a critical juncture that requires you to prioritize the human element of warehouse operations.
8) Inadequate Space for Receiving Shipments
When your receiving area bottlenecks, the efficiency of the entire warehouse suffers. Without adequate space to receive goods, unloading shipments becomes a logistical nightmare and causes delays that ripple throughout the supply chain.
These holdups can result in demurrage charges, inventory overflow that disrupts the organized flow of goods into, within, and out of the warehouse, and other money-hemorrhaging issues.
The impact goes beyond warehouse walls too. The time spent managing the congestion can increase labor costs, delay product availability for customers, and extend lead times. It’s crucial to be able to restock and fulfill orders quickly, so any impediment to this can compromise customer satisfaction and loyalty.
9) Expensive Logistical and Fulfillment Fees
As your warehouse becomes more constrained, the cost of managing that space and its logistics can soar. These expenses manifest in the form of higher freight costs due to expedited shipping requirements, increased labor costs for operating a disorganized space, or additional spending on warehousing solutions that only serve as a bandage.
However, partnering with a third-party logistics provider (3PL) can be a turning point. These services bring expertise and infrastructure to streamline your fulfillment processes, often at a lower cost due to their economies of scale.
By outsourcing, you can potentially reduce your per-unit shipping costs, improve order accuracy, and ultimately enhance your customer’s experience, all while keeping your logistical expenses in check.
10) Expanding Business and Forecasted Growth
Every entrepreneur drives toward business growth, but when your current infrastructure hampers that ambition, it’s time to rethink your strategy.
If your sales projections and market trends indicate you’ll outgrow your warehouse, you must plan for expansion now. This could involve optimizing your current space, moving to a larger facility, or augmenting your operations with the support of 3PLs.
Solutions to outgrowing your warehouse
As your eCommerce business grows, your warehouse will eventually hit its capacity. When this happens, you must find a solution to accommodate your increasing inventory and order volume. Here are a few options to consider.
Partner with 3PLs
If you want a hands-off solution to your warehouse needs, consider partnering with a 3PL. These companies provide various services, including storage, picking and packing, shipping, and customer returns management. This frees your time and resources so you can focus on other aspects of your business.
MyFBAPrep is a leading 3PL that specializes in helping eCommerce businesses grow and be successful. They offer a comprehensive suite of fulfillment services, including inventory management, order fulfillment, customer returns management, FBA prep services, and more.
Consider Warehouse Expansion or Relocation
When your current space is bursting at the seams, expanding your current warehouse or relocating to a larger facility could be the next step.
Expansion may be less disruptive to your existing operations and can be tailored to your needs. However, it requires capital investment and may only provide a short-term solution if your growth continues.
Relocation, meanwhile, opens the opportunity to move into a facility that accommodates growth and may come with modern amenities. The downside includes the potential for significant downtime during the move and the challenge of adjusting to a new layout and location.
Implement Advanced Inventory Management Systems
Advanced inventory management systems have emerged as logistical game-changers, revolutionizing the way businesses track, manage, and optimize their inventory. By embracing these technological advancements, companies can enhance efficiency, reduce costs, and elevate overall performance.
One of the greatest advantages of modern inventory management systems is their ability to provide real-time data visibility. This live tracking eliminates the discrepancies that can arise from manual data entry, reducing errors and enabling better decision-making.
These systems can also analyze inventory patterns and product characteristics, suggesting the most efficient use of available space, even as inventory levels fluctuate. By refining warehouse utilization, you can minimize storage costs and improve storage organization.
Additionally, advanced inventory management systems offer automation capabilities that further streamline warehouse operations. You can automate tasks such as restocking notifications and purchase order generation, which saves time and cuts the risk of manual errors.
Adopt Vertical Storage Solutions
Vertical storage solutions like high-density racking systems can dramatically increase the capacity of your warehouse without raising its footprint.
Maximizing vertical space unlocks several benefits, including:
- Increased capacity: By using the full height of your warehouse, you can store more without expanding outward.
- Improved accessibility: Advanced racking systems often provide solutions for easily accessing high-stacked goods.
- Optimized footprint: Focusing on vertical space enables you to maintain a smaller footprint, which potentially reduces rent or property costs.
Outsource Specific Operations
Recognize when to outsource specific tasks to streamline operations. By delegating to specialized service providers, you can harness the expertise and efficiency of industry experts while saving time on internal processes.
Outsourcing offers a multitude of perks that can elevate your company’s performance:
- It provides access to niche expertise that may not be readily available in-house. For instance, packaging design and reverse logistics for returns require specialized knowledge and experience that third-party providers possess.
- It ensures flexibility in scaling operations up or down as business needs fluctuate. This eliminates the overhead of maintaining staff and space for functions with fluctuating demand.
- Outsourcing often leads to enhanced efficiency. Specialized service providers have the infrastructure and systems in place to perform specific tasks more efficiently than in-house operations. This can reduce costs, improve accuracy, and shrink turnaround times.
Seasonal Overflow Storage
For businesses that experience significant seasonal fluctuations, such as a surge in demand during the holidays, having temporary overflow storage is invaluable. This strategy is all about flexibility — it provides additional space precisely when you require it, without the financial burden of carrying extra square footage throughout the year.
By adopting overflow storage, you can maintain organization within your primary warehouse and dedicate its resources to the immediate fulfillment of orders. This separation keeps your main operations uncluttered and efficient while surplus stock remains accessible but out of the way, ready to replenish shelves as needed.
Wrapping up — Navigating warehouse growth
It’s vital to stay vigilant for signs that you’re outgrowing your current warehouse. Congestion, inefficiencies, and rising costs all indicate the need for a more scalable solution.
Taking proactive measures is key. This might mean adopting sophisticated inventory management systems, rethinking your storage strategies, or embracing the advantages of vertical space.
Perhaps the most impactful step you can take is exploring third-party fulfillment services. 3PLs are designed to grow with you, offering the flexibility, efficiency, and scalability that in-house solutions often struggle to match. By partnering with a fulfillment service, you offload the stress of warehouse management and free yourself to focus on the core areas of your business, from product development to customer engagement.
The goal isn’t just to keep pace with your business’s growth but to anticipate and facilitate it; staying ahead requires your logistics infrastructure to be able to support both your current success and future ambitions. By addressing warehouse limitations early and decisively, you lay the groundwork for seamless operations, satisfied customers, and a thriving business.
Rachel Go is the marketing director of MyFBAPrep, an eCommerce warehouse network for Amazon aggregators, enterprise brands, and top Amazon sellers. Operating a global network of more than 100 warehouses and 85-million-square-feet of operating warehouse space, MyFBAPrep offers a full suite of ecommerce 3PL services including Amazon wholesale and private label, direct-to-consumer (DTC) fulfillment, and B2B retail. Powered by its SaaS technology platform Preptopia™, sellers get access to unified billing, analytics, business intelligence reporting tools and real-time inventory views across multiple warehouses in the network. The company provides FBA Prep automation, modern robotics item picking, and a dedicated account management team. Based in Coral Springs, Florida, MyFBAPrep moves over $1 billion in Gross Merchandise Value (GMV) and processes over 10-million units annually.
About the Author
Rachel Go is the marketing director of MyFBAPrep, an eCommerce warehouse network for Amazon aggregators, enterprise brands, and top Amazon sellers. Operating a global network of more than 100 warehouses and 85-million-square-feet of operating warehouse space, MyFBAPrep offers a full suite of ecommerce 3PL services including Amazon wholesale and private label, direct-to-consumer (DTC) fulfillment, and B2B retail. Powered by its SaaS technology platform Preptopia™, sellers get access to unified billing, analytics, business intelligence reporting tools and real-time inventory views across multiple warehouses in the network. The company provides FBA Prep automation, modern robotics item picking, and a dedicated account management team. Based in Coral Springs, Florida, MyFBAPrep moves over $1 billion in Gross Merchandise Value (GMV) and processes over 10-million units annually.
