Warehousing & Fulfillment

eCommerce Warehouse Management: Top 3 Priorities for Growth

Warehousing & Fulfillment
February 24, 2021
10 min read

Looking for an ecommerce warehousing solution? Prioritize these three things for sustainable ecommerce growth.

Table of Contents

A Fully Integrated eCommerce Warehouse Management System

A Distributed eCommerce Warehousing Network

A Flexible eCommerce Warehouse Network

eCommerce Warehousing Simplified


Finding just the right ecommerce warehousing solution to stand up to customer expectations for 1 to 2-day delivery is one of the most important decisions an ecommerce seller will make for their business. 

Many merchants find that the demands of building a fully in-house ecommerce warehousing solution is a drain on internal resources that is ultimately less efficient than an outsourced warehousing model.

In fact, a recent merchant survey revealed that while 89% of small to mid-sized business (SMBs) own and operate at least one warehouse, 45% report that they would like to divert resources away from logistics management and back towards their core competencies.

And it’s no wonder. Merchants report that in 2022, warehousing became more expensive (79%) and that labor became more time-consuming to manage (36%). What’s more, McKinsey reports that logistics can account for 12%-20% of an ecommerce business’s operating expenses. In an unpredictable market, merchants should prioritize margin preservation by keeping operating costs low, and streamlining ecommerce warehousing and fulfillment is a great place to start.

Ahead we’ve outlined three priorities for merchants looking to increase efficiency and improve margins with more strategic ecommerce warehouse management.

1. A Fully Integrated eCommerce Warehouse Management System

Digital sales channels move fast, and your fulfillment solution needs to move just as fast to keep up with demand. You need the ability to launch a promotion or aggressive marketing campaign without worrying about building up a backlog of unfulfilled orders and disappointed customers. The key to effective ecommerce warehouse management is automation, and automation is powered by integration.

Choose a fulfillment partner with a direct integration with your ecommerce platform to automate as many functions as possible, saving time and ultimately increasing customer satisfaction with accurate and fast fulfillment. An ecommerce warehousing integration should automate the following functions:

Order Management:

As soon as a customer places an order it should be automatically routed to your fulfillment provider. Manually checking your Shopify account, creating labels, and uploading orders to your fulfillment platform is an unnecessary time-suck. order management not only saves you time but ensures that the warehouse gets your order as quickly as possible for same day or next day fulfillment. 

eCommerce Warehouse Location:

You shopping cart integration should automatically match an order to the ecommerce warehouse location closest to the order’s delivery address to enable you to meet fast shipping promises as efficiently and inexpensively as possible.

Delivery Tracking:

Consumer expectations for delivery tracking are higher than ever. A full 93% of consumers say the check the delivery status of their package at least once while it’s in transit, and 40% admit they check delivery tracking at least once per day. With this level of interaction, businesses must automate last mile carrier tracking with tracking numbers syncing automatically from their ecommerce warehouse platform to their ecommerce store.

Inventory Management:

You should never have to wonder if your ecommerce store or marketplace lasting has up-to-date inventory levels. Your ecommerce warehousing integration should automatically and regularly update inventory so you’re not switching back forth between portals to reconcile inventory. Automating this process also prevents stockouts and backorders which can lead to frustrating customer experiences.

Integration points should go beyond simply connecting a single shopping cart to your ecommerce warehousing solution because a truly scalable ecommerce business model is multichannel. A fully integrated solution will tie all sales channels together, from ecommerce to wholesale, with a single platform. A single platform view of all channels and all warehouse locations gives you full visibility and allows you to make strategic decisions like exposing more inventory for increased sales on your most profitable channels.

2. A Distributed eCommerce Warehousing Network

Customer expectations for ecommerce delivery is 1 to 2 days, regardless of the merchants’ size. In fact, a recent survey showed that many consumers actually expect faster shipping from small to mid-sized retailers.

Inventory distribution is the most efficient and cost-effective way to meet 1 to 2-day delivery expectations. Forward-stocking inventory as close as possible to the end customer eliminates costly next-day air and long-zone shipments. This requires a greater upfront investment in inventory to stock multiple ecommerce warehouses, but the impacts of offering fast shipping ultimately increases both top-line and bottom-line revenue, far outweighing the additional inventory carry costs.

1 to 2-day shipping promises advertised early in the customer journey, as with Google Free & Fast shipping annotations, improve top of funnel conversions by 9%, and a recent merchant survey indicated that offering 1 to 2-day shipping options at checkout increases cart conversions by up to 25%.

In the same survey, 59% of merchants reported more repeat customers, and 39% reported better online reviews when they offered 2-day shipping.

To see how extending your 1 to 2-day delivery network could increase revenue and lower delivery costs for your business, try our free network analysis tool.

ecommerce warehouse management

3. A Flexible eCommerce Warehouse Network

A major benefit of digital sales channels is their flexibility. They can easily be turned on or off in response to changes in demand, and as the seller you can choose to target more profitable geographies with marketing and promotions. 

To take full advantage of this flexibility, you must have an ecommerce warehouse network equally flexible to pivot with demand. There are three distinct ways that ecommerce demand could shift, and it’s important that your ecommerce warehouse management system (WMS) is able to support any of these three shifts.


As your market share increases, your customer profile will inevitably shift. As you discover new pockets of demand, you need the flexibility to move your inventory close to these new customer bases to keep service levels consistent while controlling your cost to serve.


Many businesses experience regular seasonal demand changes, and a qualified ecommerce warehousing partner will have flexible agreements to accommodate these shifts. You should be able to pay for only the space and labor you need when you need them, and you shouldn’t be paying increased rates during the holiday season or committing to your highest seasonal rate for the entire year. 

Customer Type:

Continual shifts in ecommerce demand translate to changes in order mix. Direct to consumer (D2C) ecommerce orders require small parcel shipping, while B2B ecommerce require LTL or FTL shipments. Merchants with flexible partnerships in place that can accommodate any order type or transit mode will ultimately win when demand shifts. Flexibility creates supply chain resilience in the face market disruptions.

eCommerce Warehousing Simplified

As fast-growing ecommerce brands look to build more resilient and flexible supply chains, many businesses choose to outsource ecommerce fulfillment to reduce capital expenditure and increase efficiency. In fact, 74% of merchants agree that the future of fulfillment is outsourced, cowarehousing models that offer reduced operating, flexible labor, and access to cutting-edge supply chain technology.

Learn more about how cowarehousing could simplify your ecommerce warehouse management.

Frequently Asked Questions

What are the types of ecommerce warehouses?

Fulfillment Center:

A fulfillment center is more than a warehouse for storing inventory but also offers pick, pack, and shipping services. Fulfillment centers are usually reserved for products with a high sales velocity and not intended for long-term storage.

Distribution Center:

Distribution centers can hold more long-term storage. They can be leveraged as part of a hub and spoke fulfillment model, where safety stock is stored in distribution centers and then fed to strategically-located fulfillment centers as needed.

Dropshipping Warehouse:

Dropshipping is often handled directly through the product manufacturer but can also be negotiated with a wholesaler. Rather than purchasing and storing inventory, sellers purchase items from their dropshipping provider on a per-sale basis, and the manufacturer or wholesaler ships the item directly to the customer. This is a technique sometimes used to test into a new product line but isn’t a sustainable model for high growth.

What is ecommerce warehouse management?

eCommerce warehouse management refers to the systems, processes, and technology involved in managing ecommerce warehouse operations. Warehouse management should include both day-to-day standard operating procedures (SOPs) as well as long-term strategy.

Do you need a warehouse to run an ecommerce business?

Owning and operating an ecommerce warehouse can increase operating expenses and drain internal resources. Many fast-growing business choose to outsource fulfillment to reduce capital expenditure and free up resources to focus on core business functions.

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