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Automating your warehouse involves a variety of factors, from the size of the warehouse to floor space to safety measures. It's about integrating automation technologies into warehouse systems, such as warehouse robots and automated guided systems, to optimize order fulfillment and enhance customer satisfaction. These automated warehouse systems are designed to improve order accuracy and streamline the movement of goods.

What is Warehouse Automation?

The goal of warehouse automation is to automate as many repetitive tasks and processes as possible within a warehouse with the goal of increasing speed and efficiency and reducing human assistance. This automation can come in both the form of software and physical robotics which move throughout the warehouse. Talking to an expert can be highly helpful when trying to decide how to automate your warehouse as they will assess your current warehouse workers, processes, and your goals, to help you find the technology to make those goals a reality.

How Automation Pays Off

Yes, warehouse automation can cost a lot upfront. But the return on investment (ROI) can be worth it. Think about:

1. Labor Savings - Less labor needed can mean big cost savings over time.
2. Higher Productivity - Tech can work all the time, which means more output and more revenue.
3. Fewer Errors - Tech makes fewer mistakes than people, which cuts down on costs.
4. Better Space Use - Some tech, like AS/RS, can use vertical space, saving costs in warehouse space.

Yes, the upfront cost is high, but long-term savings and efficiency costs with industrial automation can lead to a positive ROI over time.

What Influences the Costs of Warehouse Automation?

The cost of warehouse automation depends on numerous factors. Size matters; large-scale operations may need thousands of pallets moved daily, which requires a significant investment in automation technologies. On the other hand, small-scale operations might only need a few automated forklifts or drones to improve efficiency and reduce warehouse labor costs further. The people involved in these operations also play a role in determining the cost.

Other cost-influencing factors include the complexity of your supply chains, the level of human intervention currently required per automated solution, and the dimensions of your fully automated solution, warehouse system and infrastructure.

For instance, retailers like Walmart may have multiple large-scale distribution centers requiring advanced automation. These are the things to consider when planning for warehouse automation.

The Costs of Different Automation Technologies

There's a wide range of various warehouse management and automation systems available, each with its unique cost basis. Conveyor belts, automated storage and retrieval systems and cloud computing can provide enhanced visibility into the picking process and minimize error rates, but they also involve substantial initial expenses and ongoing maintenance costs. These technologies provide valuable insights into warehouse management system operations.

Here are some general stats for your warehouse costs with industrial automation costs available.

1. If you want a system which focuses on picking improvement, you will likely find the cost to be between $500,000 to $1 million
2. In searching for a mechanized operation system you’ll find the cost range between $1 million to $5 million, and some enterprise systems can even get up to $15 million
3. If you want to look at a “dark warehouse” with no operators, you could expect around $25 million
4. But these are just estimates. Each warehouse is unique with different needs which means the price to automate your warehouse operations will be specific to you.

More advanced options, such as collaborative mobile robots such as warehouse robots and cobots (collaborative robots), might have higher upfront operating costs. However, their benefits like improved safety, productivity, and error-proofing of automated systems may make them a worthwhile investment in certain cases.

Leveraging Government Aids for Automation

To encourage businesses to upgrade their tech, governments often provide grants and tax incentives. If your automation includes AI, robotics, or similar technologies, you might qualify for these benefits. Tax credits or accelerated depreciation could also be part of your financial strategy. This varies by region and business, so seek advice from a local business counselor or tax professional.

Calculating Total Ownership Cost in Automation

The total cost of ownership (TCO) is essential when considering warehouse automation. This figure includes your initial investment, plus ongoing costs like maintenance, upgrades, and staff training. Regular upkeep keeps your automation tools running well.

Over time, you'll need to upgrade your system to stay on the cutting edge. Plus, your team will need training to use these new tools. Calculating TCO gives you a realistic picture of your investment and helps you make wise choices about which automation technologies offer the best return.

Real-world Examples of Warehouse Automation Success

1. Amazon - Amazon's automated warehouses host over 200,000 robots globally as of 2020. Robots move shelves to workers, saving time and effort. The result? They can handle up to 700 orders every hour.
2. Ocado - Ocado, a UK online grocery, uses "swarm" robots to pick groceries. With precision and speed, they handle over 3.5 million items or 65,000 orders weekly.
3. Adidas - Adidas' SPEEDFACTORY is mostly using automated systems. The result is quick response to demand, less overproduction, and fewer transport distances.
4. Zalando - Zalando used robots to deal with growing order numbers. Robots improved efficiency and cut down processing time.

Balancing Costs and Benefits of Warehouse Automation Solutions

Warehouse automation is not merely a cost but an investment. With the growth of online sales and the e-commerce market, companies need to deliver results quickly and accurately to their customers. Enhanced productivity and reliability through automation technologies can significantly impact your bottom line. The reasons for implementing warehouse services and automation solutions often outweigh the costs.

Additionally, industrial automation systems can also provide scalability and flexibility to existing labor,, which is vital in adapting to changes in customer demand. For example, a sudden surge in orders can be handled more efficiently with an automated system than with manual labor.

When Does Automation Make Sense?

It makes sense when the warehouse automation cost outweighs the existing warehouse operating budget and expenses. Managers need to keep in mind the risk versus reward. The key is to find a balance between significant cost savings investing in technology and automation cost while ensuring it delivers the right results in terms of productivity, safety, and customer satisfaction.

For instance, if a large portion of your expenses goes towards warehouse automation, reducing costs go towards moving and tracking goods manually, your warehouse automation RoI will be high. Moreover, if error rates are high due to human error and intervention in manual tasks, technologies such as artificial intelligence could offer valuable error-proofing measures.

Factors to Consider when Implementing warehouse automation solutions

When you're choosing automation tech, think about: Budget - What are the costs of buying, installing, and upkeep of automation equipment? Remember to weigh initial costs against long-term savings. Operations Size - How big is your warehouse and how many goods do you handle? This will help you decide what tech will help most.

Fragile items may need different automated storage and retrieval when put to light systems rather than heavy ones. Existing Systems - Current systems in your warehouse might affect which tech fits best. Future Plans - If you plan to grow your warehouse or operations, your tech needs to grow too.

How Warehouse Automation Impacts Other Operations

Automation doesn’t just affect your warehouse. In fact, automation can affect other major parts of your business in a good way. As an example, if you automate as many processes as possible within your warehouse using both robotics and inventory management software, you’ll see a ripple effect towards other aspects of your business.

Think about how this automated solution would roll over to your other operations. Especially cost to automate, with higher accuracy and more data to feed major decisions within your company. The automation you implement today will continually service your business down the road.

Future Trends in Warehouse Automation

The whole warehouse floor space and automation landscape is continuously evolving with technological advancements. Let's delve into a few future trends that experts predict will shape the whole warehouse space industry:

Enhanced Machine Learning and AI Capabilities

Artificial Intelligence solutions are playing an ever-increasing role in automation. Advanced algorithms can analyze large volumes of data to forecast demand, optimize inventory, and streamline the supply chain to develop more complicated automation solutions. We'll likely see even more integration of these technologies with cloud computing into warehouse operations.

Collaborative Mobile Robots (Cobots)

As warehouse robotics technology advances, we're likely to see increased use of Cobots - robots that are designed to interact with humans in a shared workspace. They enhance human capabilities, allowing for higher productivity levels. Collaborative mobile robots are predicted to work alongside humans, not replace them.

Autonomous Mobile Robots (AMRs)

AMRs are a game-changer for warehouse operations. They can navigate additional warehouse space without human intervention, significantly increasing productivity and efficiency. Experts forecast that AMRs will be more integrated into warehouse operations in the future, handling tasks like picking, packing, and transporting goods.

Internet of Things (IoT) and Smart Warehouses

IoT allows for real-time tracking and data collection, leading to enhanced operational efficiency. The concept of "smart warehouses" is anticipated to become more prevalent, utilizing IoT for inventory management, predictive maintenance, and energy management.

Drone Technology

Aerial inventory technology could soon play a bigger role in warehouse operations. They can be used for tasks like inventory checks and transporting small items within the same warehouse layout, reducing human effort and time. Drones equipped with RFID technology can quickly locate and identify items in large warehouses.

Advanced Analytics

The future of warehouse operations will involve making data-driven decisions. Advanced analytics tools can provide insights from vast amounts of data, enabling better demand forecasting, optimized logistics, and improved efficiency.

Sustainability Focus

As businesses strive to reduce their environmental impact, we'll see more efforts towards making warehouse operations eco-friendly. Automation can contribute to this goal by reducing waste and improving energy efficiency.

Enhanced Cybersecurity Measures

As warehouses become more automated and digital, the importance of cybersecurity grows. Future trends are likely to see increased focus on securing systems and data.

These future trends highlight the potential for innovation and transformation within the warehouse automation space. As automated warehouse technology continues to advance, different warehouses that embrace these trends are likely to see significant improvements in efficiency, productivity, and overall operational effectiveness.

Final Thoughts on Warehouse Automation Costs

Investing in warehouse automation systems requires careful consideration of a variety of factors, beyond smart warehouse cost, including size, safety, and the nature of your supply chain.

The goal of successful warehouse automation strategies for operators should always be to improve efficiency, reduce waste, and increase customer satisfaction. While costs can be high, the potential benefits for productivity and growth can make automation a vital arm of modern warehouse operations.

In the past, robotics have specifically focused on the manufacturing sectors, but now they are hitting the logistics sector with powerful improvements in automated warehouse systems. Warehouse automation may have a big price tag up front, but these processes bring your facility into the future and allow you to compete faster and more accurately than other warehouse processes which don’t yet have automation within them.

You’ll find many cost reductions both in labor and space come with automating your warehouse. However the transition to an automated warehouse system and facility can’t be taken lightly, it must be deliberately strategic with a plan that could last months or even years to implement.

How To Get Creative with Product Optimization: Offerings and Strategies

If there's one thing you can count on in the eCommerce world, it's that things are constantly changing. What works today might not work tomorrow, so it's crucial to stay ahead of the curve and keep your product offerings and strategies fresh. In this PalletSide Chat episode recap, we'll give you tips on getting creative with product optimization and increasing your AOV. Alex also talks about utilizing hot buzzwords to stay ahead of the competition. So if you're looking for ways to increase AOV and stay ahead of the curve, this blog post is for you!

Find Certainty in the Uncertain

The state of the economy is a hot topic of conversation these days. Everyone has an opinion on what's happening and what needs to be done to fix it. But when it comes down to it, there are only so many things that we as individuals can actually control. Interest rates and consumer spending habits are important factors affecting our businesses. But at the end of the day, what really determines our success is how we respond to these macro trends. Do we let them get us down, or do we focus on the things we can control and execute our plans flawlessly? So let's dig into some of those controllable factors and figure out how to make next year a success despite all the uncertainty.

“The key to overall success I think in 2023 … is looking at how you really optimize revenue, especially from existing customers.” - Dan Van Meer.

We’ve All Struggled

We've all been there. You're scrolling through Twitter, and you see someone flexing their successful eCommerce business, and you can't help but feel a little discouraged. You think to yourself, "Why can't I be like them? What am I doing wrong?" The reality is that everyone struggles at one point or another in their eCommerce journey.

Even the people who seem to have it all together have had their fair share of struggles. The key is not to compare yourself to others and to keep pressing on. There is no one magic solution to success in eCommerce; the key is to keep trying new things and keep going. So, if you're feeling down about your eCommerce journey, just remember that even the most successful people have been in your shoes before. Keep pressing on, and you'll eventually find success.

“I'll be vulnerable here. We spent a good three years completely paralyzed because we had no idea ... what we were doing.” -Alex Lewkowict.

Product is King, and Offer is Queen

As any entrepreneur knows, a successful business requires hard work and dedication. However, even the most passionate entrepreneurs sometimes need help to achieve their goals. This was the case for Alex. Despite his best efforts, he found it difficult to generate sales and grow his business. That is, until he received some sage advice from a friend: "product is king, offer is queen."

With this new perspective, Alex focused on creating a solid product offering. He also revised his marketing strategy, ensuring that his ad spending focused on creative and targeting. The results were immediate and substantial; within months, Alex turned his business around and saw record sales. This just goes to show that, when it comes to business, sometimes it's the little things that make all the difference.

“[Wush] was our Trojan horse. And it goes back to my saying, product is king, offer is queen. As soon as we understood that, it changed everything.” - Alex Lewkowict

Lifetime Value (LTV)

If you're in the business of selling things, it's important to understand your customer's Lifetime Value (LTV). This measures the total revenue customers will generate throughout their relationship with your company. The higher your LTV, the better. If you have a product with a higher barrier to entry, it's more expensive and thus a more significant decision for potential customers. In this case, you'll need to spend more on marketing to get people to buy because it's not an impulse purchase.

At Black Wolf, they quickly learned that their biggest hurdle wasn't their products' price point but their LTV. They market themselves as a premium brand. Their COGS (Cost of Goods Sold) is high, and their margins are slim, so it's always been a struggle to increase their AOV. They launched with an AOV of $18, and through a few expansions to their line, they managed to scale up to $40.

But Black Wolf couldn't get past the $40 mark, no matter how hard they tried. It was frustrating because everyone kept telling them that the key to winning in eCommerce is having a high AOV  of $50 or even $100. But they just couldn't hit those numbers. So Black Wolf had to find another way.

“We had to change our business model to fundamentally shift the trajectory of marketing our skin care products online.” -Alex Lewkowict.

Average Order Value (AOV)

Rather than looking at AOV as simply the total value of an order, businesses should consider it an opportunity to optimize revenue. There are many ways to do this, but the key is to focus on existing customers. Acquiring new customers is always expensive, so it's essential to ensure you're getting the most out of your existing customer base.

One way to do this is to optimize AOV on initial orders. Upselling or cross-selling complementary products can do this. Another way to optimize AOV is to focus on recurring orders. This could involve creating subscription models or offering discounts for loyalty. Businesses can unlock various new revenue streams by thinking creatively about how to increase AOV.

Trying to Increase AOV

Black Wolf’s old strategy wasn't working as planned - people weren't biting at the more premium, larger bundles they were offering. They could've gone two ways: Make the products even more expensive or desirable, or lower the barrier to entry (aka make it cheaper/more accessible). So, they decided to go with the latter and offered a free trial with a 60-day subscription. And it worked like a charm! The CPA decreased significantly, which led them to change their business model and shift their marketing strategy for skincare products online.

To expand their brand and increase their AOV, they knew they needed to diversify their product offerings. So, they saw an opportunity when they came across ear cleaning as a high search/low competition category. They knew that to get their new product into retail stores and ultimately onto TV, they would need to come up with a catchy name. That's how Wush by Black Wolf was born. Wush has been hugely successful for them, selling in stores like Bed Bath and Beyond, CVS, Rite Aid, and HSN. And they're not just selling any old product - Wush is a luxury item with a significant margin. Plus, their CPA is lower than it was for their skincare products.

“So you got to make sure that you're not afraid to admit that what you have is not working and just rejigger.” - Alex Lewkowict.

Cross-Marketing

So how do you effectively cross-market all those things to your existing customer base? When Black Wolf launched a hair care line, they made it salon-grade. And the idea is to use salons and barbershops as the lead magnet for their brand. When you get a product that your barber recommends, you trust and love it, and then … you want to find it for cheaper. Using this strategy has been working well for Black Wolf.

“You can have the best creative in the world, but it really comes down to the fundamentals of what are you selling and how much are you selling it for? What is the offer? What is the product?” -Alex Lewkowict

Do What You’re Good At

No matter your business, it's always important to focus on your strengths. The saying goes, "If you can't be the best, be the best at being the best." Dan and Alex set out to talk about increasing AOV, but they quickly realized that the most important thing is offering a great product. You can have the best supply chain in the world, but if your product isn't up to par, you'll never succeed. Conversely, you'll never reach your full potential if you have great development but poor operations. The takeaway is that you need to focus on what you're good at and build a strong foundation. Once you have a solid foundation, you can branch out and experiment with other business areas. But always remember: it's important to stick with what you're good at. Otherwise, you'll never be the best at anything.

“Learning from your mistakes, big and small, is pretty key to success.” -Dan Van Meer.

Stay Ahead of the Competition

So, what are some things you can control in your business as they head into 2023? Alex and Dan have highlighted a few key factors that will help you increase sales and stay ahead of the competition. For example, learning from others' successes and failures is a great way to gain insights that will help your business grow. Additionally, increasing AOV with new product offerings and strategies can be another successful way to boost revenue. If you want to read more about these tips and find out additional ways to succeed in 2023, stay tuned for more great podcast episodes!

Do you have marketing questions that have been keeping you up at night? Or warehousing challenges that have left you feeling defeated? Well, don't suffer in silence any longer! The PalletSide Chat podcast is here to help. In each episode, hosts Dan and Alex tackle a wide range of topics related to the pallet industry, offering advice, insights, and solutions. And now they're inviting listeners to join the conversation. So if you have a question or comment, don't hesitate to reach out to podcast@shiphero.com and let your voice be heard! Who knows, your question might be answered in a future episode!  

Episode Glossary:

• AOV (average order value): An eCommerce metric that measures the average total of every order placed with a merchant over a defined period.
• LTV (lifetime value): The estimated revenue a customer will generate over their lifetime with the brand.
• CPA (cost per action): An online advertising model in which payment is based on qualified action, such as sales or registrations.

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‍Watch on YouTube or Listen on Spotify

‍About the Hosts: As VP of marketing, Dan Van Meer is always on the go. From overseeing project management and data analytics, he has his hands in a little bit of everything. Most importantly, he ensures that all creative work - from graphic design to digital marketing - is high quality and on-brand. Co-host Alex Lewkowict is quite the renaissance man. He's been an adolescent entrepreneur, successful CEO, and Founder of a men's skincare line, and he created One23 Fulfillment. Did we mention he made the Forbes 30 under 30 list?

It's no secret that the shipping industry has seen significant changes in the last few years. Retailers have had to adjust their operations due to port delays, labor shortages, and inflation. As we move into 2023, there are several key trends that retailers should be aware of. From load balancing to sustainable packaging and fast order fulfillment, here are seven shipping trends to watch out for in the new year.

1. In 2023, Supply Chain Concerns Will Persist

Anyone who's tried to order a simple item online lately knows that supply chains are majorly screwy right now. Thanks to a global pandemic, war conflict, and port delays, shipping and manufacturing delays have become the norm rather than the exception.

In February 2022, only about 34% of container vessels arrived at their destination with no delay. And according to our research, 39% of brands say shipping and manufacturing delays and shipping costs will continue to be a top supply-chain-related challenge over the next 12 months.

Fortunately, most retailers acknowledge it will take time to unravel the challenges associated with shipping delays and the supply chain. In the meantime, there are some things consumers can do to ease the burden.

2. More Efficient Shipping with Load Balancing

No retailer wants to be known as a company with terrible shipping. Customers expect efficient shipping; anything less can damage a company's reputation. Shipping is one of the most significant expenses for a retailer. So, this is where load balancing has come in.

Load balancing is a popular method of reducing shipping and warehouse costs by distributing shipments evenly across multiple carriers. Getting products closer to your customer through distribution centers helps to avoid service disruptions and delays. Studies have shown that load balancing can save up to 25% on shipping costs. In addition, load balancing can reduce your total costs by up to 13%.

While load balancing has many benefits, it is not without its challenges. It takes coordination and a good warehouse management software system to work efficiently. However, the savings are definitely worth the effort. Load balancing has only gained popularity in recent years, but it is expected to grow even more as retailers realize the benefits.

3. Agile Supply Chains

Agile supply chains are designed to be highly flexible and responsive, so businesses can quickly make changes as needed. Shifting from ‘just-in-time’ to a more stable ‘just-in-case’ model allows brands to respond to more supply chain setbacks.

While it may be impossible to insulate one’s company from another global pandemic, operating with more robust inventory levels may help companies to overcome supply chain obstacles and maintain the integrity of fulfillment channels. In other words, the days of "set it and forget it" shipping are long gone.

Businesses need to be prepared for anything and everything, which means having a supply chain that can quickly adapt as needed. Recently, I discussed this same challenge with Shopify and other leaders in fulfillment; you can find the full article here.

4. The Future of eCommerce is Green

As the world becomes more conscious of the need to protect the environment, sustainable packaging is set to become one of the most critical industry trends.

Order fulfillment companies are already beginning to place a greater emphasis on sustainability, with 46% of customers indicating that they are more likely to purchase a product online if they recycle the packaging.

In addition to meeting customer demand, this shift will also help reduce eCommerce emissions, which currently account for six times as much pollution as products purchased in-store.

Placing their sustainable shipping and returns values at the forefront of their offering makes it easier for customers to buy in. Sustainable packaging isn’t just good for the environment – it’s good for business too.

5. Keep Customers Happy with Transparent Shipping

Customers today expect more than just fast delivery times; they also expect accurate delivery times. That's why delivery time accuracy and transparency are becoming increasingly important for businesses of all sizes.

Customers expect brands to be upfront about delivery times with today's supply chain disruptions and ever-changing shipping costs. After all, no one likes getting their hopes up for a package that ends up being late.

But it's not just about meeting delivery expectations—it's also about setting realistic ones in the first place. Brands that overpromise and underdeliver risk damaging customer relationships beyond repair. Research shows that 32% of customers have abandoned a cart because "the estimated shipping time was too long" and 22% because "there was no guaranteed delivery date."

Looking ahead to 2023, developing transparency and trust around shipping will be critical to building long-term customer relationships—relationships strong enough to weather any industry challenges that come your way.

6. Shipping Cost Relief is in Sight

We all know how important shipping is to eCommerce. And, after a rocky few years, 2023 is shaping up to be a good year for shipping. Thanks to continued innovation in logistics and transportation, we can expect cheaper shipping costs and less port congestion.

While there may still be some disruptions in the supply chain, retailers are finally starting to feel some relief. According to the Freightos Baltic Index, in Q4, the global average cost of shipping a container is $3,429, compared to a whopping $10,396 in October 2021. Lower container costs and fewer backlogs should help retail brands keep shipping rates lower for consumers. So far, so good!

7. 3PLs: Make eCommerce Shipping Easy

As eCommerce businesses continue to grow and expand, many find they need more help than they can handle. This is where third-party logistics providers (3PLs) come in. 3PLs specialize in managing all aspects of the shipping process for their clients, from warehousing and fulfillment to transportation and tracking. By partnering with a 3PL, you can free up valuable time and resources so that you can focus on what you do best.

With pre-negotiated contracts and a network of fulfillment centers spread across the country and worldwide, a 3PL can offload the time and stress of managing shipping logistics in-house while keeping costs down. As e-commerce continues to grow, we can expect even more innovation from 3PLs as they strive to provide the best possible service to their clients.

Order Fulfillment Solution for the Modern Retailer

If you're feeling overwhelmed by the logistics of shipping in 2023, never fear! ShipHero is here to help. We've outlined the seven most important shipping trends for retailers this year, and we'll continue to monitor these trends as they evolve.

Plus, ShipHero offers an end-to-end, full-service fulfillment solution that leverages the reach of our seven owned and operated warehouses (strategically placed across the country and Canada). So, if you're looking for a way to outsource your supply chain and shipping needs, consider partnering with a 3PL like ShipHero. Let us take care of the fulfillment so you can focus on what you do best - selling products!

—

Maggie M. Barnett, Esq. COO of ShipHero

‍About the author: Maggie M. Barnett, Esq., is the COO of ShipHero. She is responsible for planning and executing the overall operational, legal, managerial, and administrative procedures, reporting structures, and operational controls of the organization. Barnett’s greatest strengths are leadership, risk mitigation, change management, and a passion for business transformation. She is known for her expertise in delivering operational excellence and ability to provide guidance and mitigate risk. Her leadership of ShipHero is grounded in a servant mentality, always doing the right thing for our stakeholders. Her passion for ShipHero comes from the ability to drive operational excellence throughout the organization impacting the lives of our employees, customers, and partners.

Follow Maggie on Twitter&LinkedIn.

How to Cut Shipping Costs without sacrificing Customer Satisfaction

In this PalletSide Chat podcast episode, we’re sharing a panel, hosted by our own COO Maggie Barnett for FounderMade East. Speaking with Brett Tepper from ModKat and Rich Brewer from Boutique Brands, they discuss practical solutions for keeping shipping costs low and customers happy. They cover everything from optimizing fulfillment processes to utilizing technology effectively.

Most business owners know that reducing shipping costs is a major priority, but it can be tricky to do so without alienating customers. It can be daunting, but with the right advice, it can be done without sacrificing customer satisfaction. This expert panel will teach you how to keep your customers happy while shaving dollars off your shipping bill. Tune in for the tips and tricks these experts have gleaned from their own experiences running successful eCommerce businesses in an ever-changing landscape. Shipping rates may be skyrocketing, but that doesn't mean your eCommerce business has to suffer!

The Litter Box Business

When it comes to litter boxes, even the most design-savvy among us can be taken by surprise. Just ask Brett Tepper and his business partner, who found themselves unexpectedly in charge of cat box duty. What they discovered was a litter box that was, in their words, "not happening." The following day, Tepper's business partner came in with an idea for a better design.

Thus began a journey that would take them from Walmart to Taiwan and eventually result in a successful product. Today, Tepper and his partner continue to work with the same manufacturer, and their litter box remains one of the most popular on the market. They are considered "OGs" of the Shopify world, as they were one of the first 300 people to use the platform. Who would have thought such a simple, but smelly, idea could lead to success?

"So I had a few developers lined up, and then one of the developers said, 'Have you heard of Shopify?' So I started looking into it, and I was like, 'This is it.' Yeah, they have been with it since." -Brett Tepper.

How ModKat Handles Exploding Freight Costs

ModKat prides itself on being able to adapt to change. So when the pandemic hit and their sales exploded, it was a happy challenge. However, soon they found themselves facing a different problem: exploding freight costs. Freight bills soared from $6,000 per container to $12,000, then $18,000, eventually topped at an astonishing $32,000. They knew they had to make tough choices to keep their business afloat. They started by eliminating free shipping, then slowly escalated prices.

With four primary sets of SKUs, ModKat has increased pricing on their higher-end litter boxes. The downside to shipping litter boxes is that they are big, so they all hit dim weight and can only fit a few per container. With a 40-ft HQ container, they can only fit about 550 of their largest litter boxes. This directly affects the pricing scale, so that's where most of the cost-cutting has been done. Fortunately, they have enough margin on the refills to keep them at the same price. The other great thing about the litter box liners is that they fold flat and ship small, so freight doesn't affect them as much.

How ShipHero Has Helped

If you've ever worked in eCommerce, you know a lot goes into fulfilling orders. And if you are doing it yourself, a whole other stress level comes with it. That's why ModKat outsourced fulfillment to a 3PL when Tepper started his business. But then, around 2012, he got a 5,000-square-foot space and started prepping orders himself. Tepper mentions that it was great and awful at the same time. He learned a ton about how fulfillment works and why 3PLs work a certain way. But after a year, he realized it wasn't a tenable situation and returned to using a 3PL. He'd been with the same one for seven years but recently switched to ShipHero. If you've thought about fulfilling orders yourself, Tepper says go for it - but be prepared for many long nights (and early mornings).

ModKat went back to dim weight and because of that, they had four warehouses with their old 3PL, and keeping inventory in all four warehouses was difficult. That was taking up a ton of their time, just ordering correctly for all warehouses. So, knowing that ShipHero did load balancing was a massive thing for ModKat. Then on top of that, ShipHero also consolidates shipments. Which saved them a ton of money on shipping costs. So all of those things allowed ModKat to focus on other parts of their business rather than just managing logistics all the time.

Boutique Brands

In the world of fast fashion, speed is everything. That's why Rich Brewer of Boutique Brands has made it his mission to streamline the fashion ecosystem and help his employees move more quickly. By streamlining the process from manufacturing to reselling, Brewer and his team can turn inventory faster and keep up with the latest trends. And they're not stopping there. They're also constantly reviewing their website and ensuring they appeal to customers. It's all about staying ahead of the competition and keeping costs down.

Automation, Automation, Automation

As an eCommerce business knows, shipping costs can eat into profits quickly. But what happens when a company returns to charging for shipping? It's not easy to tell customers that they now have to pay after getting used to free shipping. And it's even harder to do it in a way that doesn't damage the customer relationship. That's why it's important to have systems that allow you to rate shop among carriers and find the most cost-effective option for each shipment. By automating the process as much as possible, you can minimize the impact on your bottom line and keep your customers happy.

The Return Process

Returns are allowed at Boutique Brands. There are, however, some brands that charge shipping to and from their stores. Occasionally, customers have to print a label and pay for it, but Brewer is working to simplify the process. They have yet to do exchanges, which Brewer wants to implement because that will cut down on the total loss of revenue from returns if they can use a system like Happy Returns. It automatically creates a product on Shopify. Customer service teams can then click a button and be done. Brewer is currently engaged in analyzing what's working, what's not, and who has the best return on investment for returns.

"We are more or less just maximizing every automation we can maximize." -Rich Brewer.

Provider transparency

Provider transparency is something that has become increasingly important in recent years. Consumers want to know where their products come from and how they are made. They also want to be able to track their orders and see precisely where they are at all times. This level of transparency can be challenging to achieve, but it is something Flexport is working hard to provide. While the data isn't always up to date, ModKat appreciates the insight Flexport (a freight-forwarder) gives them into the supply chain process.

Recently, ModKat has been dealing with some supply chain issues beyond its control. They have had to ration inventory and cancel orders, and their customers have understandably been frustrated. In response, they created a feature on their website where people can sign up to be notified when an item comes back in stock. They thought this would help alleviate some of the frustration, but it turns out that people get even more frustrated when they get 100 notifications that an item is back in stock, only to find that it's already sold out again. Despite the challenges, Tepper is grateful for his loyal customers and will continue to do everything he can to keep them happy.

Preparing for the Next 12 Months

Over the last three years, the world has been turned upside down. We have seen economic turmoil, political upheaval, and a global pandemic. So what are ModKat and Boutique Brands doing to prepare for the next 12 months? For starters, they're stocking up on essentials. ModKat is ordering like crazy, trying to get as much inventory as possible. They're also trying to figure out ways to pep up their customers. At some point, they plan to reintroduce free shipping or offer discounts. But the most important thing is that they're getting back on their feet. The sales are picking up, and they see more customers every day. ModKat is excited about the future and ready to take on whatever comes its way.

For Boutique Brands, maximizing automation is their key to success. By using data to select styles that are in demand, and cost-effective carriers, brands can reduce costs while still providing the latest trends to customers. Additionally, expanding social media outreach and implementing loyalty programs can help increase brand visibility and customer engagement. By taking advantage of these various marketing and operational strategies, Boutique Brands can stay ahead of the competition and keep their businesses growing.

"We're actually ramping up our influencer campaigns, our UGC, our loyalty programs. All of this stuff is going into play to basically drive more business to help mitigate the additional costs." -Rich Brewer.

Turn the Challenges of Today's Marketplace into Opportunities for Tomorrow's Success

If there's one thing that's certain in eCommerce, it's that shipping rates are always on the rise. Carriers announce new rate increases yearly that can eat into your profits if you're not careful. But don't despair - there are still ways to keep your shipping costs under control, even in the face of rising rates. Optimizing your fulfillment processes and utilizing technology effectively can minimize the impact of rate hikes on your business. By streamlining your operations and using shipping rates as a lever to drive customer loyalty, you can turn the challenges of today's marketplace into opportunities for tomorrow's success. So don't let rising shipping rates get you down - use them to fuel your eCommerce success.

The FounderMade East panel was hosted by ShipHero's COO, Maggie Barnett, and she was joined by Brett Tepper, the co-founder of ModKat, and Rich Brewer, the product manager at Boutique Brands. This session is packed with great information for anyone in eCommerce, whether you outsource your fulfillment or manage it in-house. So, take a moment and listen to the full panel or watch it on YouTube!

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‍About the Panel Host: Maggie M. Barnett, Esq., is the COO of ShipHero. She is responsible for planning and executing the overall operational, legal, managerial, and administrative procedures, reporting structures, and operational controls of the organization. Barnett’s greatest strengths are leadership, risk mitigation, change management, and a passion for business transformation. She is known for her expertise in delivering operational excellence and her ability to provide guidance and mitigate risk. Her leadership of ShipHero is grounded in a servant mentality, always doing the right thing for our stakeholders. Her passion for ShipHero comes from the ability to drive operational excellence throughout the organization impacting the lives of our employees, customers, and partners.

Follow Maggie on Twitter&LinkedIn.

It's hard to believe that we're already at the end of 2022, but as we all know, time flies! The eCommerce landscape of 2022 has been a wild ride, from fulfillment technology advancements to mobile commerce innovations and seamless omnichannel experiences. As 2023 rolls around, all these developments mean one thing: Companies need to stay on their toes and continue adapting their eCommerce strategy to the latest advancements to stay ahead of their competitors in the highly competitive eCommerce space. A lot has happened, so let's look back at some of the biggest eCommerce developments in 2022 and see what they mean for 2023.

Mobile Shopping’s Rise to Power

eCommerce has come a long way since its inception, and the rise of mobile shopping is a testament to this. Mobile commerce volume is expected to hit $620.97 billion by 2024. This means nearly half (42.9%) of all eCommerce purchases will be made via a mobile device. eCommerce companies should fine-tune their strategies to cater to the increasingly mobile-savvy consumer.

More and more shoppers are investigating products on their phones before deciding which to buy. Plus, with handier features and conveniences, they can enjoy the ultimate comfort while browsing and making purchases at their fingertips! The rise of mobile shopping gives eCommerce businesses more opportunities than ever to increase customer engagement and drive up profits.

Omnichannel Selling

eCommerce is a rapidly growing juggernaut of a marketplace, and one of the biggest trends to keep an eye on is omnichannel selling. Technically speaking, this strategy allows you to reach customers in as many channels as you can think up - from in-store purchases and eCommerce sites to social media platforms, email campaigns, and beyond! But what does it mean for businesses? Well, for starters, it means that staying ahead of eCommerce trends has never been more important!

A successful omnichannel approach can bring numerous advantages; shoppers are no longer held to traditional hours or wait times when trying to reach an employee. Thanks to an eCommerce store that operates 24/7 and ways to reach customer support, even after business hours have ended. Additionally, with strong SEO practices and clever content marketing at play behind the scenes, customers find their way through different touchpoints right into your eCommerce store. All these advantages add up.

eCommerce Goes Social

In the modern eCommerce landscape, it's become increasingly important for businesses to cultivate a presence on social media. With more people flocking to platforms like Facebook and Instagram, eCommerce companies are turning to social commerce models as an easy way to engage potential shoppers and increase brand exposure.

This trend has only been further augmented by clever influencer campaigns and sponsored content that drives measurable results. Ultimately, leveraging eCommerce trends and social media allows businesses to acquire and convert more customers quickly. It's no surprise that companies are increasingly looking at social media as a viable eCommerce channel - once again proving how impactful this powerful medium can be!

Immersive Experiences with AI and AR

eCommerce trends are ever-evolving and staying on the cutting edge can be challenging. One of the most prominent eCommerce trends is using AI, automation, and Augmented Reality (AR) to improve customer service and experience. Although AI applications have been around for a while, only recently have eCommerce organizations taken full advantage of their potential in their technology stack.

With AI and AR capabilities, eCommerce companies can go beyond mere personalization to create immersive shopping experiences with product recommendations tailored to an individual’s needs, virtual or augmented store environments that shoppers can explore without leaving home, and even eCommerce versions of the metaverse complete with avatars navigating life-like simulated stores. Together these tools represent just some of the ways AI has enabled eCommerce companies to enhance their customers’ experiences while streamlining their operations simultaneously - something they’ll no doubt be capitalizing on more and more in the coming years!

Using Technology to Optimize Labor

eCommerce trends continue to accelerate, and with peak seasons arriving earlier each year, warehouses are under immense pressure to find ways to optimize labor for order fulfillment. In the past, the answer was to hire more workers – throw bodies at the problem, as it were. But in today’s tight labor market, such a strategy isn’t feasible.

Thankfully, engineers and technologists have developed solutions to keep eCommerce operations running smoothly while requiring fewer employees on the warehouse floor. The development of robust eCommerce technologies like advanced warehouse management means warehouses can maintain high throughput rates with fewer people. However, warehouse managers know there's still no better way to fulfill orders than by leveraging extra manpower during peak season – even if only for a few weeks each year.  With dedicated teams using the most up-to-date eCommerce tools combined with clever coordination of optimal resources, there’s no eCommerce challenge too complex for any warehouse.

What Does This Mean for 2023?

As we enter 2023, it feels like eCommerce is on a rollercoaster. Technological innovations and consumer expectations have changed almost constantly, and retailers must reimagine themselves to stay in business. But amidst all the chaos, there are two reliable retail trends that every business can count on: change and innovation.

Retailers need to adapt faster and move with agility regarding eCommerce trends like fulfillment, mobile commerce, omnichannel experiences, social media presence, and the use of AI. It's about more than just "keeping up.” Businesses must lead the way to stay ahead of their competitors. They need to be smart about recognizing eCommerce trends as they emerge and being prepared for customers' needs today so that they're ready for whatever tomorrow might bring. With the right strategies in place and a willingness to innovate swiftly, companies will be well-positioned for success come 2023.

eCommerce Continues to Evolve

eCommerce trends in the eCommerce space are nothing short of amazing. eCommerce brings many fulfillment options for sellers, from same-day deliveries to improved returns processes, giving consumers more power than ever. eCommerce lets businesses enter the domain of mobile commerce, where they can quickly reach their target audience and foster more relationships. As eCommerce continues to evolve, we can expect greater convenience for shoppers and improved management capabilities for sellers to meet their customer's needs and desires in real-time. The eCommerce landscape is exciting and rapidly changing - one thing is clear - the future promises immense opportunities for online business owners!

If you're looking for a software and fulfillment solution that can scale your business, ShipHero has you covered. We offer direct integrations with various popular eCommerce platforms and marketplaces, making it easy to get started. Plus, we constantly work on adding new features and integrations so that you can keep up with the latest eCommerce trends. Ready to start shipping like a pro?

Maggie M. Barnett, Esq. COO of ShipHero

‍ShipHero

‍About the author: Maggie M. Barnett, Esq., is the COO of ShipHero. She is responsible for planning and executing the overall operational, legal, managerial and administrative procedures, reporting structures and operational controls of the organization. Barnett’s greatest strengths are leadership, risk mitigation, change management and a passion for business transformation. She is known for her expertise in delivering operational excellence and an ability to provide guidance and mitigating risk. Her leadership of ShipHero is grounded in a servant mentality, always doing the right thing for our stakeholders. Her passion for ShipHero comes from the ability to drive operational excellence throughout the organization impacting the lives of our employees, customers, and partners.

Follow Maggie on Twitter&LinkedIn.

With online shopping continuing to grow in popularity, demand has never been higher for fast and efficient fulfillment services. As a fulfillment warehouse, you need to be able to ship products as quickly and accurately as possible.

That’s where warehouse storage and organization come in. Nothing can kill productivity faster than a disorganized warehouse, so let’s break down the best ways to keep your operation running smoothly.

Why is an Organized Warehouse Essential for Fulfillment?

There are a few problems you can encounter when your warehouse isn’t organized or running properly, such as:

• Wasted Time - If workers have to walk back and forth to pick items for shipments, those seconds and minutes can add up. Even just 15 minutes per employee for a 50-person warehouse could lead to 3,000 minutes lost in a year.
• More Returns and Refunds - Mis-picked orders can lead to dissatisfied customers, meaning they’re more likely to return their items. Unfortunately, putting these products back on the shelves is more wasted time for your staff.
• Inaccurate Inventory Counts - If your inventory is not organized properly, you can order more products than you need or delay ordering because you think you have more than you do. Either way, such inefficiencies can cost you dearly in the long run.

Overall, every piece of your warehouse is like a cog in a well-oiled machine. One faulty part could cause a chain reaction that could lead to major headaches and higher operating costs.

Top Five Ways to Keep Your Warehouse Organized

Because warehouse organization and storage are so critical for success, let’s look at five ways you can improve your operational efficiency. Best of all, you can combine strategies for even more benefits that lead to more clients, happier customers, and fewer returns.

Invest in High-Tech Solutions

Fortunately, we’re living in a golden age of technology, so there are multiple options available, including:

• RFID Tags - These tags make it easier for pickers and inventory managers to stay up-to-date with production levels. Tags can be on bins or individual items, depending on your needs. As workers scan these tags, your inventory management system updates automatically.
• Worker Tracking Software - Programs can keep track of individual employees and how they move throughout a given shift. If you notice a lot of time spent going back and forth, you can figure out what’s causing that extra wasted time and fix it accordingly.
• Order Tracking - As items move in and out of your warehouse, you should know details like where they came from, how long they stayed in the warehouse, how they were shipped, and their final destination. Warehouse management software allows you to track inventory in real time so you’re never out of the loop.

Review Your Warehouse Layout

So much time is wasted with inefficient picking methods. For example, let’s say you have multiple types of the same product. If you don’t store these items together, workers have to go searching for each variety.

As a general rule, you want to place similar items in the same area and rank products based on seller info. Best-selling items should stick together while infrequent purchases can get moved to an area with less-heavy traffic.

If workers also have to sign in and out or submit documentation, you can place this station next to the fulfillment center. This way, employees can finish an order and fill out the paperwork without too much downtime in between.

Create a Waste Management System

A dirty or disheveled warehouse is an inefficient warehouse. Not only can empty boxes and other items pose a safety threat, but it’s much harder to verify your inventory levels.

So, it’s better to come up with a waste management system so workers know where to put packaging and other items. You can also have a picking system so individuals empty a current supply box before opening another one.

Focus on Safety

Just like a dirty warehouse, an unsafe warehouse is also highly inefficient. Usually, unsafe environments occur when the company cuts corners and doesn’t take its employee’s health seriously.

Safety measures can include apparel, best practices for dangerous items, clear marking for forklift paths, and more. Overall, the more you invest in extra-safe measures, the more likely your warehouse will stay safe and efficient.

Keep Warehouse Staff Trained

Employee morale and turnover are two of the biggest threats to the fulfillment industry. eCommerce giants like Apple and Amazon are struggling to retain workers, thanks to long hours, grueling working conditions, and more.

Maintaining a regular training schedule can help keep your employees sharp and motivated. Not only can you cover existing problems and risk factors, but you can also look at potential future situations.

Even better, staff training can be fun and engaging, further bringing everyone together when they’re on the clock.

By utilizing these top five tips, you can improve your operational efficiency greatly, leading to a higher level of client satisfaction while also creating a more cohesive environment for your staff.

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For More Information About ShipHero

Whether you want to let go of running your own warehouse, or run your warehouse better, you can do both – and so much more – with ShipHero.

Click HERE to Schedule a Meeting with Our Sales Team.

Follow us today on Twitter and LinkedIn.

Backorder Meaning in eCommerce

To stay competitive in the world of eCommerce, businesses have to find ways to satisfy the demand of consumers for almost instant gratification. When consumers shop, they expect to be able to purchase the products they want and receive them promptly. While items online may not always be available right away, clients expect to receive them as quickly as possible.

When clients find out they can’t have what they want when they want it, they are faced with deciding whether to wait for the product to become available or look for another company that may have it in stock. If products aren’t available because they’re out of stock or backordered, there’s a risk clients will take their business elsewhere.

What Does Available on Backorder Mean?

A backordered item is a product that isn’t present in your physical inventory, but it’s expected to be replenished. This means that although you’re unable to fulfill orders to clients immediately, you expect to have the product back in stock by a certain date. The fact that you have an expected shipping date means that you may be able to keep a client’s interest in a product since you can let them know it’s available on warehouse backorder.

When items are backordered, it indicates that demand is outpacing supply. Too many items on backorder may be a sign that inventory isn’t being managed effectively. Long wait times are likely to be frustrating to clients who may take their business elsewhere.

Does Available on Backorder Mean the Same as Out of Stock?

The meaning of the term backorder isn’t exactly the same as out of stock. Items on warehouse backorder aren’t currently in your warehouse but are available from suppliers. Items that are out of stock may or may not become available again in the future. eCommerce businesses may accept orders for items on backorder since they’re expected to be ready to ship in the future. Orders aren’t usually accepted for items that are out of stock.

Common Causes of Backorders

There are several different things that may cause an increase in backorders. Some examples include:

• Unexpected demand. More orders are placed than anticipated sometimes because of marketing or seasonal trends.
• Weather delays. Bad weather or natural disasters may slow transportation and prevent items from being shipped right away.
• Supplier problems. Products may be delayed because of miscommunication or the manufacturer or supplier’s inability to meet production goals.

Businesses often keep extra stock on hand to try to prevent items from ending up backordered or out of stock. This is known as safety stock. If there’s insufficient safety stock because of counting errors, your company may not be prepared to handle normal demand, let alone higher-than-usual demand.

Disadvantages of Backorders

As your eCommerce business grows, you’re likely to receive an increasing number of orders. Backorders can lead to increased customer service headaches because sometimes people call repeatedly to find out when their order is being shipped.

If people have to wait too long for an order, they may change their minds and decide to cancel.If demand for your products increases more quickly than supplies are replenished, you may face shortages or a large number of backordered items. To keep clients satisfied, stock shortages or backorders shouldn’t be something that occurs regularly. When products are out of stock or back ordered too often, it can damage the reputation of your company.

Keeping Clients with Backorders Happy

Clients with backorders often start looking at other companies when they find out the items that they want aren’t available right away. Consider what actions you can take to keep your clients happy. Offering a coupon for a discount on their next purchase lets them know you’re concerned the order couldn’t be fulfilled promptly and that you value their business. If they’ve ordered multiple items, ship what’s available without charging extra to ship the backordered item separately.

Communication is Key

Providing good client service includes keeping clients informed so that they know right away when a product they’re interested in is backordered as well as when it’s back in stock. If backordered items only happen occasionally, it may stimulate demand for items that aren’t immediately available. You can help to create excitement for the product by sending emails counting down the number of days until it’s in stock again. Another advantage to backorders is that they give you some insights into what products are in the highest demand.

How Can You Reduce the Number of Warehouse Backorders You Have?

Advanced technology makes it possible to monitor inventory automatically and to receive up-to-date information such as alerts when stock is low. Using warehouse management software is a good way to be proactive about inventory management and obtain better forecasting.

Effective inventory management means using methods such as real-time inventory tracking to make sure there’s sufficient safety stock on hand. This can help ensure that fulfilling orders won’t be delayed because of supply chain issues, which can help reduce the number of warehouse backorders you experience.

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For More Information About ShipHero

Whether you want to let go of running your own warehouse, or run your warehouse better, you can do both – and so much more – with ShipHero.

Click HERE to Schedule a Meeting with Our Sales Team.

Follow us today on Twitter and LinkedIn.

It's the most wonderful time of the year … or is it? Peak season is make or break if you're in the retail business. And this year, there are more challenges than ever before. Between inflation and the heavy reliance on credit and discounts, many retailers scramble to keep up. But fear not! In this blog, we'll look at how buy now pay later (BNPL) programs are helping to keep the holiday season bright.

Inflation & The Holiday Season

Inflation has been rising throughout 2022, and December is no exception. This is bad news for retailers, who already feel the squeeze from higher costs across the supply chain. Products once affordable are now out of reach for many shoppers, who are forced to either cut back on their holiday purchases or turn to credit cards and other forms of debt to finance their shopping. According to the NRF, online and other non-store sales were up 9.5% at $261.6 billion, which fell short of its 2022 forecast of a 10% to 12% growth. While inflation has continued to soar for several months, consumer spending has remained relatively consistent.

What is Buy Now, Pay Later (BNPL)?

We all know the feeling of wanting something we can't afford. What if there was a way to buy now and pay later? No interest, no fees, and no credit card required. Enter: buy now, pay later.

A BNPL solution allows shoppers to spread the cost of their purchase over time without accruing any interest or fees. This makes it an attractive option for shoppers struggling to keep up with the rising cost of living. BNPL programs are also convenient because they can be used online and in-store.

BNPL emerged in the early 2010s to help consumers finance their purchases without the high-interest rates and fees associated with credit cards. Since then, it has grown increasingly popular, particularly among younger generations. And with the recent pandemic, BNPL solutions have taken off even more. The size of the U.S. market was worth around a few billion dollars in 2019 but is estimated to grow by 1,200% by 2024!

The Escalating Use of Credit Cards and BNPL Programs

The use of credit cards and BNPL programs has been rising recently, but it has exploded during the pandemic. These companies have gone from being relatively unknown to becoming a significant force in consumer credit in just a few short years. And it's not hard to see why.

For merchants, it drives higher average tickets and reduced cart abandonment. Plus, retailers benefit because people can make purchases even when they don't immediately have funds available. If played correctly, they may see them return again, which would be a great play toward loyalty.

Why Has BNPL Gotten So Popular With Consumers?

There are a few reasons why BNPL programs have become so popular. First, they allow shoppers to make purchases now and pay later without accruing any interest or fees. This can be especially helpful during economic uncertainty when people try to be more careful with their money.

Second, BNPL programs usually have very low minimum payments, which makes them even more appealing to cash-strapped shoppers. Finally, most BNPL providers offer promotional periods that allow shoppers to delay payments even further. For example, Afterpay—one of the most popular BNPL providers—gives customers the option to pay interest-free for their purchase over four equal installments.

BNPL: A Winner of Black Friday

Thanksgiving and Black Friday may have been great days to be a buy now, pay later service provider. Given the economic pressures many shoppers face right now, BNPL payment options offered a way for consumers to still get the goods they wanted. More telling is that some shoppers are using BNPL for lower-priced goods instead of high-ticket items, with the average order value for BNPL purchases decreasing in the U.S. by 6% on Thanksgiving. Orders using BNPL rose by 78% the week of Nov. 19 to Nov. 25 when compared to the week before, according to Retail Dive. Additionally, overall revenue from BNPL is up 81% during the same period. In other words, people are using buy now, pay later services more than ever to finance their holiday shopping – and they're doing it at lower price points than in previous years.

Could There Be Repercussions?

The problem with BNPL is that there are consequences if you don’t follow all the rules. However, many providers and their critics are currently concerned about the types of products purchased. In the past, many consumers took out BNPL on high-ticket items. Now, that same money is used to pay for groceries and other essential expenses, leaving a potential for predatory lending if the market is not regulated correctly. While such practices can be considered harmful, on the other side, the diversity and flexibility in BNPL approaches could spell a new era for consumer buying and boost future buying potential.

Nevertheless, for now, it appears that the pressures are manageable. Losses on installment loans are low, and payment rates are high based on corporate filings. It is clear that the 'pay in four' BNPL product has found a sustainable niche in the consumer credit market. By providing a more efficient and cost-effective option for consumers, BNPL companies are stealing growth from traditional financial providers. What happens next will only be revealed with time.

Only Time Will Tell

The holiday season is always challenging for retailers, but there are more challenges this year than ever. Inflation puts pressure on tight margins, and shoppers increasingly turn to credit cards and other forms of debt to finance their purchases. This is where BNPL programs come in. While BNPL programs may provide a much-needed boost to retail sales during peak season, there could be long-term consequences for retailers and shoppers alike if debt levels continue to rise. However, by allowing shoppers to spread the cost of their purchase over time without accruing any interest or fees, BNPL programs are helping to keep the holidays bright for retailers and shoppers alike. Only time will tell how this will all play out, but one thing is for sure: we're in for an interesting peak season!

ShipHero Team

‍About ShipHero: We make it simple for you to deliver your eCommerce. Our software helps you run your warehouse, and our outsourced shipping solutions eliminate the hassle of getting your products to your customers. With thousands of brands and 3PLs relying on us daily, we’re here to help with all your logistics needs. Let us know how we can help you today by scheduling a call HERE.

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What is a Packing Table Workstation?

A packing table workstation is an area where orders are packed and labeled for shipping. It should be kept clutter free and have shelves for packing materials. Packing tables need to be strong and durable to withstand constant use and heavy weight.

A factor to consider when setting up a packing bench is that it should be ergonomic. Supplies and materials should be positioned within comfortable reach and kept in the same place on each shelving unit. Examples of supplies that should be easy to access include:

• Packing materials
• Boxes
• Poly bags
• Bubble wrap
• Tape

There should also be easily accessible storage space nearby and a place to hang and store tools such as a tape gun or staple gun. Custom packing tables that consider available space can be set up to meet the needs of your organization. Larger eCommerce companies may benefit from a spacious packing table that’s accessible from all sides, allowing it to be used by multiple people at the same time.

To find out how ShipHero sets up our own packing stations, check out this video!

Workflow at Packing Table Stations

For maximum efficiency, determine the job duties of warehouse staff to make sure there isn’t duplicated effort. Who is responsible for bringing orders to the packer or checking line items to the packing list? A procedure needs to be in place regarding damaged items. If items that are about to be packed are found to be damaged, there needs to be an area for storing partially packed orders until damaged items are replaced.

Replenishing Supplies at the Packing Station

Packing-related supplies need to be replenished at the packing station periodically. Determine who is responsible for taking care of this. Packers shouldn’t have to interrupt their process to go find replacement supplies or wait while someone else puts fresh supplies on the station. A way to replenish supplies quickly is by using portable supply carts that can be wheeled up to the table. Some packing tables can be accessed from the back so that the packer doesn’t have to pause their process.

Moving Items Away from the Packing Station

A procedure also needs to be defined regarding how packed orders are moved away from the packing station to the shipping area. An effective way to do this is to have a conveyor belt within arm’s reach that moves completed packages to the shipping area. When this is set up right next to the packing table, the packer may be able to slide packages on the conveyor belt so that the packages do not have to be lifted or carried. Another option is for completed packages to be placed on a wheeled cart that’s rolled away when it’s full.

What Happens if a Packing Table Isn’t Well Designed?

When packing table workstations aren’t well designed, it can affect productivity and increase the risk of errors in order fulfillment. When time is being wasted because of disorganized pack tables, labor costs may go up and you may have to pass on increased shipping and handling costs to your clients. An area that’s not kept clutter-free can increase the chances of dropping and breaking items or mislabeling packages.

Preventing Injury

Accidental injuries occasionally happen on the job so it’s a good idea to consider how much potential for injury there is when thinking through how ergonomically correct your company’s packing stations are. Time spent hunching or crouching can cause damage to muscles or bones over time. The packing station and height of office chairs should be adjustable to take the worker’s height into consideration. If it’s possible to have workers push boxes onto a conveyor belt rather than lifting them, it can help to prevent back or shoulder injuries.

Improving the Ease of Use of a Packing Station

When a packing station is being used regularly, it’s a good idea to pay attention to how smoothly things are working and see if there’s a way to make the packing station more efficient. Is time being wasted because frequently used items aren’t easily accessible? Pay attention to processes that may need to be simplified or modified, such as time spent walking to get items from pickers and time spent crouching or hunching.

Clients expect speedy delivery, and an efficient packing table workstation is an important part of having a streamlined order fulfillment process. Periodically review the effectiveness of your packing stations and see if changes need to be made to improve efficiency, whether your goal is to increase packing speed or reduce breakages.

In the world of supply chain management, understanding the different types of warehouses is crucial. These storage areas, ranging from stockrooms to depots to consolidated warehouses, each serve a unique purpose, facilitating order fulfillment and ensuring customer satisfaction. They are integral to the warehouse design and management systems of any company.

Private Warehouses

Private warehouses are owned and operated by suppliers and manufacturers, or distributors. These private warehousing storage systems provide an advantage of control over the handling and storage of materials. Companies like Target have their own private warehouse or warehouses, offering flexibility to adapt to changes and control transportation costs. The name of the warehouse owned or company is usually associated with the warehouse for easy identification and maintenance.

Public Warehouses

Public warehouses are rented spaces, offering storage to different businesses on a contractual basis. For startups and smaller companies, this eliminates the need for a large investment in a private building. An added benefit of public warehouses is their potential for warehouse automation, improving efficiency and reducing human error. These warehouses can be found in almost every country.

Bonded Warehouses

Bonded warehouses are government-licensed storage areas for imported and duty-unpaid goods. This type of warehouse enables manufacturers to defer payment of taxes until goods are sold or shipped, aiding in maintaining cash flow. They also provide a secure environment for storing valuable items such as pharmaceuticals in secured boxes.

Cooperative Warehouses

Cooperative warehouses are owned and operated by organizations of farmers or similar groups to store and distribute members' produce. They can reduce transportation and packaging costs while maintaining a high level of customer service. These public warehouses tend to perform specific functions that cater to the needs of the cooperative members.

Cons of Public Warehouses

Less control and insight on stock levels, products flow and product handling since the goods are under the control of the client.

Distribution Centers

Distribution centers are key for fast-paced order and fulfillment services. A prime example of this type of warehouse function is cross-docking, where incoming shipments are directly transferred to outgoing areas, minimizing storage time and cost. In some cases, these fulfillment centers also serve as a stash point for goods before they are distributed to different locations.

There is also room to store temporary goods. Unlike other warehouses the warehouses can store material for temporary and long periods, with significantly higher rates for goods incoming and outgoing. If a large amount of material is collected and distributed to multiple distributors in your supply chain it can help greatly. Distribution centres manage and ship orders as well and are essential in the communication of suppliers and clients.

Automated Warehouses

Automated warehouses use state-of-the-art warehouse automation technology to streamline processes. These smart warehouses can handle large quantities of products and improve accuracy in order fulfillment. It's an optimal solution for companies aiming for growth and efficiency. The warehouse layout in these facilities is designed to maximize automation.

Cold storage warehouse

It is a storage area where temperature-sensitive materials like medications, cosmetics and drinks are stored. These warehouses are specially constructed to maintain the lowest possible temperatures. This storage facility is mainly beneficial because it will keep the quality for years. A further cooling system provides the temperature within the cold storage facility.

A Look at Specific Warehouse Types

To dive deeper, let's take a look at some concrete examples of how different warehouses have different use cases. The U.S. government maintains government warehouses for storing reserves of essential items, from emergency medical supplies to military equipment. This government warehouse serves as an example of how even private sector companies and warehouses can cater to very specific needs.

Amazon's modern warehouses are another fantastic illustration of warehouse automation. These tech-powered facilities maintain a vast range of products, managing inventories with advanced robotics. They're designed to store inventory and ensure quick, accurate deliveries of imported goods to customers, showcasing the efficiency and scalability automated warehouses can provide. Their proprietary warehouses have set the benchmark of digital transformation in the warehousing operations industry and are optimal for long term storage.

Costco operates a network of cooperative warehouses. It sources products directly from producers and sells them to consumers in bulk via a typical cooperative warehouse, reducing transportation and packaging costs. These warehouses cater to members, reflecting the utility of cooperative warehouses for certain business models.

However, there are also cons to fulfillment centers. Costs can add up quickly, particularly if making extensive use of their value-added services. You also have little control over how your items are handled and shipped, which can risk product damage and unhappy customers best suited to storage items on a short-term basis, such as those with high-value In other words, rather than operating in an open-plan first-come, first-serve basis, contract warehouses provide storage when it is advisable.

A Closer Look at Warehouse Costs

Costs associated with warehouse operations can be a deciding factor in which type of public warehouse is right for your business. A private warehouse may require a higher upfront investment for construction or purchase, but ongoing costs are within your control. Public warehouses eliminate that initial expenditure but have recurring rental fees. Bonded warehouses provide tax advantages, while automated warehouses may save businesses money entail substantial technology and maintenance costs. Evaluating these costs in relation to your business's financial capacity and long-term goals is crucial.

Choosing the Right Warehouse for Your Business

Choosing the right warehouse will depend on several factors, including:

• The amount and type of goods: Does your business handle large volumes of small items or smaller volumes of large items?
• The stage of the production process: Are you storing raw materials, work-in-progress, or finished goods?
• The desired level of control over storage and transportation: Do you need close control over inventory and transportation, or is flexibility more important?

Ask yourself these reflective questions to help in your decision-making process:

• What are my specific storage needs, and how can different warehouse types meet these needs?
• How might my warehouse needs change as my business grows or as market demands shift?
• What kind of investments am I willing to make in warehouse infrastructure, either up-front or over time?
• Do I want to invest in automations and latest technologies and build a smart warehouse?

Remember, the correct warehouse inventory and storage facility choice can enhance your supply chain management.

Case Studies on Warehouse Selection

Looking at real-world examples can further clarify the impact of warehouse space and type on a business's success:

1. Walmart: The retail giant operates an extensive network of distribution centers, efficiently handling vast quantities of goods. This system, combined with cross-docking, allows Walmart to maintain low storage costs and rapid product turnover, a cornerstone of its low-price strategy.
2. DHL: This global logistics company uses bonded warehouses at key locations, allowing clients to delay duty payments and aiding in smooth international trade. Their choice of warehouse supports their role as a global shipping and logistics leader. Since it's a major part of their business operations, most of their properties have undergone digital transformation and have been transformed into smart warehouses.
3. Zara: The fashion brand's innovative use of an automated distribution center in Spain has become a case study in supply chain efficiency. Their system responds rapidly to changing fashion trends, which is integral to their business model.
4. IKEA: IKEA, the multinational furniture retailer, has perfected its warehouse management to align with its unique business model. IKEA's warehouse-style stores allow customers to pick up flat-packed furniture directly from the warehouse section. This clever blending of retail and warehouse spaces allows IKEA to reduce its storage costs and simplify inventory management. Further, by placing the responsibility of product assembly on the customer, IKEA has significantly reduced its storage and transportation costs. IKEA's strategic choice of a warehouse type closely integrated with their retail outlets is integral to their success and unique customer experience. They even have their own bin storage practices.

Future Trends in Warehousing

The warehousing industry doesn't stand still. In a decade, every warehouse will be a smart warehouse and make the best use of the following emerging trends:

1. Artificial Intelligence (AI): AI can improve accuracy in demand forecasting, optimizing stock levels and reducing warehousing needs. It can also aid in warehouse management, improving efficiency.
2. Drones: Drones in warehouses can be used for inventory management, reducing manual labor, and increasing accuracy. They can also work in unsafe conditions, improving worker safety.
3. Internet of Things (IoT): IoT devices collect and analyze data in real time, improving operational efficiency. They can track goods, monitor equipment performance, and even predict maintenance needs, reducing downtime.

Embracing these trends can give your business a competitive edge, allowing you to maximize efficiency and adapt to future business needs and challenges in the warehousing industry.

Concluding Thoughts

The warehouse is more than just a storage space. It's an essential cog in the supply chain management system. Understanding the different types of warehouses and their pros can provide your business with an edge, enhancing order fulfillment and bolstering customer satisfaction. From private hoards to other warehouse options, automated caches to on demand warehouses, the answer to your storage needs lies in understanding these warehouse types.

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