As we all know, e-commerce has grown exponentially over the last 15 years, from the days of Amazon and a few net-only retailers to being the cornerstone of nearly every retailer’s omni-channel strategy. £133 billion was spent online with UK retailers in 2016 and, understandably, SMEs are keen to secure a slice for themselves.
However, with the opportunity of e-commerce comes the challenge of logistics. So, when going head-to-head with larger businesses, how can SMEs leverage the latest innovations to compete with bigger online players?
For many SMEs the storage and picking of items is a key focus and successful order fulfilment can make or break them. With a firm eye on cost, SMEs need to ensure minimal floor space occupation, maximum utilisation of storage volume and high product availability.
But, with warehouse numbers depleting across the country and no money to develop, or procure their own industrial space, does the answer for SMEs lie in the application of the shared economy model to the world of third party warehousing?
New web-based businesses are creating Airbnb-style matching sites for those with spare warehouse space and those requiring storage. For SMEs, on-demand warehousing offers immediate scalability advantages because it allows them to increase storage as a variable cost, rather than taking on fixed cost new warehousing units too soon.
For smaller businesses whole units are likely to be economically inefficient until fully utilised and are often only available with onerously long leases. This, in turn, means that a business would need to forecast its growth for several years ahead in order to determine what size of warehouse to take.
With on-demand warehousing, a business’ storage capacity and its warehousing cost base are more closely matched to its sales level, allowing SMEs to operate a Just in Time (JIT) approach to fulfilment, satisfying customer demand without items stockpiling in a warehouse, distribution centre, or in the back of the store.
Crucially, on-demand warehousing also offers SMEs access to a potential new revenue stream. If an SME owns a storage facility but struggles to utilise the full volume of space available, they can now register their space and make it available to other SMEs looking for temporary storage.
One of the challenges for SMEs looking to embrace ecommerce is the cost of technology required to support the operation. And again, the new on-demand warehousing websites can help. The best websites combine the algorithmic technologies that match partners together – in the style of price-comparison sites – with cloud-based operating systems to enable both parties to manage pallet stock on the same platform.
Zupplychain’s ‘MyStock’ is a free-to-use management system which allows customers to efficiently manage stock across multiple locations. It places no limits on the number of users, products or transactions, and allows the management of stock across multiple locations. Its pallet level unique reference system also makes it easy for businesses to offer spare space for third party storage without investing in new system.
How can SMEs leverage on-demand warehousing in four easy steps?
When visiting an on-demand warehouse site provide as much information as possible about the pallets to be stored along with other logistics requirements to ensure you are matched with the best warehousing solutions as quickly as possible.
Be flexible on location: If price is key remember that the storage cost savings you may make further afield will exceed any increased transport cost.
Take advantage of free technology: Leverage any available management system to your advantage.
Attach URN labels to your pallets to ensure full traceability.
Martin Elgood is managing director of Zupplychain.