Top Warehouse Challenges for Small Ecommerce Businesses
With billions of dollars spent online every year, it’s no surprise that starting an ecommerce business has never been easier. Ecommerce is predicted to account for 14.5% of total retail sales in the US alone by 2022.
Large manufacturers and merchants are snatching up the limited storage space as excess stocks fill up industrial space. As more and more small businesses turn to ecommerce to grow their revenue stream, it’s important to understand that running an ecommerce business comes with its unique set of challenges.
This guide will share some top challenges that small ecommerce businesses face and how you can overcome them.
What is Ecommerce Warehousing?
Ecommerce warehousing stores products from an ecommerce business to ensure they are available for sale anytime. It can include inventory, product returns, and excess stock. When done correctly, warehousing can increase the efficiency of an ecommerce business and help it compete against larger businesses. However, there are several challenges that small businesses must overcome when setting up their warehousing program.
It can include anything from small businesses that sell to Amazon warehouse that operate ecommerce websites. Amazon seller warehouse typically involves using a third-party provider to store and manage inventory, which can help to improve efficiency and reduce costs. In some cases, ecommerce businesses may manage their warehousing operations.
Warehouse Challenges for Small Ecommerce Businesses
Challenges faced by small ecommerce businesses when it comes to warehousing can be manifold, but fortunately, there are many ways to overcome them. Here are some of the Fba amazon warehouse challenges and how to overcome them:
1. Finding the Right Location
Finding the right location for your small ecommerce business can be challenging, but it’s important to remember that not all spaces are perfect for ecommerce. Here are some tips on how to find the right space for your business:
Do your Research
Before you even start looking for a space, ensure you have a clear idea of what you’re looking for. Think about what type of business you want to run and what environment you need. Once you have a general idea, start researching online to determine specific requirements like square footage, parking availability, and traffic patterns.
Evaluate your Current Space
Once you have a general idea of what you’re looking for, it’s time to evaluate your current space. Walk through it with a critical eye and look at each room individually. Ask yourself:
- Is this the right size?
- Do I have enough storage space?
- Do I have enough counter or display space?
- Is there adequate lighting?
- Is there adequate ventilation?
- Are there any obstacles in the way, such as furniture or wires?
Choose a Space and Start Negotiating
Once you’ve found a space you’re interested in, it’s time to start negotiating. Be prepared to offer a lower price than you initially thought since landlords and businesses often require deposits and security deposits. Also, be prepared to provide floor plans and other documentation that proves your business is legitimate. Once you’ve finalized your agreement, take possession of your new space and get ready to start building your small ecommerce business.
2. Inefficient Manufacturing Processes
Inefficient manufacturing processes can be a major challenge for small ecommerce businesses. These processes can lead to high costs, low efficiency, and poor quality products. Here are some common inefficiencies that small businesses face:
Inadequate Inventory Management
Not having enough stock on hand can lead to delays in shipping orders, ultimately impacting customer satisfaction. Inventory management is critical for ensuring that products are available when customers need them and that supplies don’t run out.
Poor Quality Control
To ensure high-quality products, businesses need to have rigorous quality control procedures. It includes testing products before they go into production, tracking QC results throughout the manufacturing process, and correcting any problems as they occur. Without proper quality control procedures, products may end up with defects that frustrate customers and damage the brand’s reputation.
Lack of Automation
Many inefficient manufacturing processes involve manual labor, which can be time-consuming and difficult to scale up as a business grows. In contrast, automated processes tend to be more efficient and faster-moving, making them a better choice for larger companies with more resources. Automation can also help reduce the risk of human error leading to product defects or lost sales opportunities.
By addressing these three common challenges, small e-commerce businesses can improve their overall efficiency and performance.
3. Inventory Control
Inventory control is a critical component of any successful ecommerce business. Too much inventory can lead to excess stock and lower profits, while too little inventory can lead to shortages and high costs.
Several factors can affect an ecommerce business inventory levels, including customer demand, product availability, and supplier production schedules. To ensure that your inventory remains balanced and meets customer needs, you’ll need to regularly check product availability, order new products as needed, and track your stock levels.
One way to monitor your stock levels is through stock tracking software. This software automatically sends notifications when items in your inventory fall below a certain threshold.
Additionally, stock tracking software can help you identify patterns in customer demand (for example, seasonal trends). This information will help you plan your inventory accordingly and avoid costly shortages or overstock situations.
Inventory management isn’t always easy, but the right tools and strategies can be a successful part of your small ecommerce business.
4. Shipping Damage
Shipping damage is one of the top challenges small ecommerce businesses face. It can be costly and time-consuming to fix, and it can put a damper on your sales. Here are some tips on how to overcome shipping damage:
Plan for it
When planning your shipping strategy, make sure to account for potential damage. Figure out the weight and dimensions of your packages, and make sure they fit within the limits of your carrier’s policy.
Prepare your Shipments Carefully
Make sure everything in your shipment is packed securely and that no sharp objects or heavy items are involved. If possible, package your items in bulk to minimize the chances of damage occurring in the first place.
Use Protective Packaging when Necessary
If you have to use protective packaging, do so as soon as possible after you receive your order, preferably before shipping it out. It will help prevent any unnecessary damage during transit.
Invest in Insurance Coverage
Shipping damage can be expensive to fix, so it’s important to have insurance coverage in case something goes wrong. Not only will this help cover the cost of repairs, but it could also mean lost sales if you cancel orders because of a delay in shipping.
5. Understocking or Overstocking
These are two common challenges that small ecommerce businesses face when stocking their shelves. When a business overstocks, they risk becoming overpriced and losing customers. Conversely, if a business understocks, they run the risk of running out of stock and becoming less competitive.
Here are three tips for overcoming these challenges:
Make sure your Inventory is Accurate
The first step to overcoming an overstock problem is ensuring that your inventory is accurate. It means having enough product in stock to meet customer demand without running out but not so much product that you become overpriced or unable to fulfill orders quickly. A good way to evaluate your inventory level is using a tool.
Plan ahead
Another key strategy for avoiding an overstock problem is planning. It means knowing what products you need so you can order them in advance and have them waiting when the time comes. It’s also important to keep an eye on trends so you can anticipate which products will be in high demand and order more of those items accordingly.
Limit Sales
Finally, limiting sales growth rates is one way to avoid an overstock problem. It means limiting how much product you add to your inventory each month and focusing on reducing expenses instead. By doing this, you’ll be able to maintain a healthy balance between stocking levels and profits.
6. Returns Processing
If you’re a small business owner who’s thinking about starting an ecommerce store, there are a few things you need to keep in mind. Returns processing is one of the biggest challenges small businesses face, and it can be quite time-consuming and expensive to deal with returns. Here are some tips on how to overcome the challenges posed by returns:
Establish a Policy on Returns
Start by setting clear rules about what customers can and cannot do regarding returns. Make sure all your policies are written and easy for customers to understand.
Have a Return Process in Place
You’ll need to have a process for handling returns, from initial contact with the customer to processing the return and issuing a refund. This process should be as smooth as possible for you and your customers, so ensure you have all the necessary resources.
Educate your Customers
One of the best ways to prevent returns is to educate your customers about why they might want to avoid them in the first place. Make sure they know about your return policy and how it works, and provide helpful information like how long it will take to process a return.
By following these tips, you can ensure that your small ecommerce business enjoys success through Returns Processing.
7. Bad Reviews
Bad reviews can be a huge disadvantage to any ecommerce business. They can lower the ranking of a product on search engines, lead to fewer sales, and even cost the business money in lost revenue. Here are ways to overcome bad reviews:
Address the Issue Immediately
If there is an issue with a customer’s purchase, address it immediately. If possible, apologize for the inconvenience and offer to make things right. Make sure that any refunds or replacements are processed as quickly as possible.
Keep Your Store Clean and Tidy
One of the telltale signs that a store is not managed well is a cluttered and dirty environment. It will not only make customers feel uncomfortable, but it will also give negative reviews more ammunition. Keep your store looking neat to improve your positive rating on review sites like Yelp and Google Reviews.
Respond Quickly to Complaints
When a customer has a complaint, be prepared to respond quickly and resolve the issue. Not only will this show that you’re taking their concerns seriously, but it will also minimize the chances of a negative review spreading like wildfire through social media platforms like Facebook and Twitter.
Use Stock Photos
Stock photos can make your products look more professional and add an air of quality to your store. However, using stock photos can also lead to customers expecting a certain quality from your products that may not be realistic. If you’re using stock photos, make sure they accurately represent the products you’re selling.
8. Staff Training
When starting or expanding your small ecommerce business, it’s important to equip your employees with the necessary skills to run the business efficiently. Training your team on common Amazon fba warehouse challenges can go a long way in streamlining operations and keeping your business running smoothly.
Here are some tips for training your employees:
Make sure Everyone is on the Same Page
Training should be consistent throughout your company so everyone knows what they’re supposed to do and why. It will help them avoid confusion and ensure they follow your company’s policies and procedures.
Create Specific Goals for each Employee
Set specific objectives for each employee, such as understanding sales processes or completing certain orders promptly. It will help them track their progress and feel motivated to improve their performance.
Use Video Training Toolsets
Video training can be an effective way to teach employees new information quickly and easily. You can also use video training to reinforce important concepts and policies engagingly.
Encourage Feedback from Employees during Training Sessions
Ask them questions about the material being taught and allow them to offer suggestions for improvement. This way, you can ensure that all your employees get the most out of their training sessions.
Final Words
If you’re running a small ecommerce business, you know that many challenges exist to overcome. From expanding your product line to increasing traffic and converting leads, the list of tasks is long and daunting. This article discussed some common Amazon warehouse for fba challenges and how you can overcome them.
By reading this article, you’ll better understand what’s required to run an effective ecommerce business and implement the necessary strategies to make it happen. Otherwise, you can get from the expert at 3PLogistx.
