If you’re looking to lower costs and increase the efficiency of your eCommerce warehouse operations, your first thought might be to add automation.
But technology doesn’t come cheap. What if you don’t have the order volume to justify the cost?
Don’t despair. Following are a few low-tech ways to reduce eCommerce warehouse fulfillment center costs without breaking the bank.
1. Minimize travel time with smart slotting and routing. Road trips are fun because you’re free to explore back roads and byways with no regard for time or mileage. But, in the highly competitive online retail business, time is money.
To make your ecommerce warehouse operations as efficient as possible, you need to minimize the time it takes to pick orders. Time spent traveling around the warehouse can consume more than 50% of the time it takes to fill an order, so organize your inventory in ways that make picking routes as short as possible.
Some strategies for achieving this include:
- Placing top-selling SKUs closest to packing stations and within easy reach, and slotting the rest of your items further away according to the frequency with which they’re ordered
- Locating items that often ship together next to each other
- Adjusting choice locations as needed to accommodate seasonal demand and special promotions
Ideally, pickers should end their routes near the pack stations, so they can grab an empty cart when they drop off a full cart.
2. Use batch or zone picking. With batch picking, a warehouse associate picks the same SKU for multiple orders at the same time. This reduces travel time by consolidating trips to certain areas of the warehouse.
In zone picking, associates pick only the products that are stored in their designated zone. Orders must pass through multiple zones to be completed, but travel time for associates is reduced because they don’t move back and forth between zones.
These are just two ways to reduce warehouse labor costs with smarter order picking. There are others, and you may need to employ a couple of different techniques to keep associate travel time to a minimum.
3. Consider using a pick module. If the breadth of your SKU catalog and your order volume can support it, pick modules reduce travel time by concentrating items into a small workspace. Orders for those SKUs can be picked without the associate having to walk anywhere.
Pick modules are a customized combination of racks and conveyors organized to achieve fast-paced order fulfillment. Pick modules work best when the majority of orders are comprised of a small number of SKUs. Say, for example, that you have 100 products, but the majority of your orders are for just 10 of those products. Creating a pick mod for those 10 products will allow a picker to stay in one place to fill most orders. If an order includes products located outside the module, they can be picked and brought to the pick mod by another associate who is traveling the warehouse with a cart.
4. Differentiate packaging to make it stand out. Brands spend a lot of money on packaging because they know people are visually oriented. Think about how you locate the items you shop for at the supermarket. Do you actually look for the product by name? Or do you recognize it by the shape, colors and graphic design of its package? For most of us, it’s the latter.
You can make ecommerce warehouse operations more efficient using this same principal.
Let’s say you sell supplements. If all of your boxes look the same, with only a small line of type or a barcode to denote whether they contain a supplement designed for heart health versus one for cognitive support, it can take associates longer to choose the correct product.
If your branding and marketing guidelines will allow it, try adding a splash of color or graphic icon to differentiate one product from another to speed the picking process.
5. Rethink your packaging choices. If you’re shipping fine china or other fragile items, you have no trouble justifying the expense of oversized corrugated boxes padded with kraft paper or bubble wrap.
For soft goods and products that come in their own sturdy containers, however, consider ditching the box in favor of polybags or bubble mailers.
Polybags and bubble mailers offer several advantages over boxes:
- They’re less expensive to purchase
- They don’t require filler material (another saving)
- They cost less to ship because they weigh less and don’t incur dimensional weight charges
- They don’t require assembly, saving time (which equals money)
- They can be filled, sealed and labeled in a few steps, speeding the order fulfillment process
Some of our customers have found that polybag packaging can drive six-figure savings over what they were spending on boxes. Give your own SKU catalog a review to see where you might be able to save by bagging, rather than boxing, some of your orders.
Obviously, there’s no “one size fits all” solution for online sellers looking to make eCommerce warehouse operations more efficient. Every company has unique requirements and must take into account the number and types of products they sell, order volume, average order size, where their customers are located, brand image and other considerations.
Alternatively, you can enlist the services of an experienced provider of ecommerce fulfillment services, like Amware. We offer cost-efficient pick-and-pack services with a nationwide warehouse network that provides one- to two-day delivery to 98% of the U.S. To learn more, contact Amware today.