We live in an age where efficiency is prioritized. Whether it’s the method by which you transact with your bank, order new shoes, or track a shipment, many processes that were once time-consuming can now be performed at the touch of a button. But as this seamless experience becomes the norm, it is causing a massive shift in what businesses and consumers expect from their partners and service providers. As expectations around efficiency increase, companies are being forced to streamline their operations to meet customer demands. This is particularly true when it comes to fulfilling e-commerce orders.
As expectations around efficiency increase, companies are being forced to streamline their operations to meet customer demands. This is particularly true when it comes to fulfilling e-commerce orders.
In 2019, the gap in funding between the richest 1% of companies and the 99% of other businesses is as high as it’s ever been. However, it’s the top 1% of companies that have the most influence over customer expectations. Even as many businesses today struggle to fulfill orders in time to offer 2-day shipping, large enterprises like Amazon, Target, and Walmart are rolling out next-day or even same-day e-commerce offerings. But while the resources available to these industry mammoths for perfecting their fulfillment strategies cannot be matched by most businesses, customers are indifferent in that they expect top-notch service from all their partners, not just the largest ones. As a result, small and medium-sized businesses are often forced into purchasing expensive and awkward services like Amazon FBA to quickly fulfill orders, or compromising in areas like shipping speed, order transparency, and overall quality of service to avoid cash shortages. In the long run, neither option is ideal.
Over the past decade, the costs associated with warehousing and fulfillment have not gotten easier to manage. In fact, the cost of renting warehouse space alone jumped nearly 17% between 2016-2017 (1). So, for the growing business that finds their supply chain and fulfillment workflows limited by operational or financial bottlenecks, the question becomes: How can I manage costs while still acquiring the tools necessary to support expansion? The answer? As we will see, on-demand warehousing and fulfillment might be an ideal match.
The challenges faced within the warehousing and fulfillment space are not isolated to small or mid-sized businesses. Rather, companies of all sizes and industries experience obstacles. In a 2016 study of several hundred supply chain professionals (2), the challenges that were top of mind included:
Figure 1: As customer expectations surrounding order fulfillment increase, companies are finding it more difficult to optimize their supply chains. In a recent survey, issues related to transportation, inventory management, order processing, and supply chain scalability were all top of mind.
Over time, these challenges are amplified as businesses look to broaden their network of warehouse locations and extend their reach to a greater number of customers. In recent years, customer expectations for efficiency have further resulted in a need for expansion. Given that 60% of today’s B2B buyers expect one- or two-day shipping for their purchases (3), the number of companies using multiple distribution centers to achieve faster delivery is set to grow from 24% to 49% by 2020 (4). Regardless of industry or company size, this expansion is hard to support.
But while the above challenges are difficult for any organization, the burden has become particularly severe for small and mid-sized businesses. Both experience and data indicate that much of this strain stems directly from a lack of staffing and funding. Today, less than half of small or mid-sized companies have excess cash on hand (5), and rising interest rates are discouraging many from pursuing loans. And with the costs of hiring specialized personnel continuing to increase, even companies with a successful business model and proven product-line are struggling to obtain the resources necessary for growing their business and meeting customer expectations. However, with the arrival of on-demand fulfillment and warehousing, available through providers like Ware2Go, many of these once-significant barriers to growth have been largely eliminated.
So what exactly is on-demand fulfillment?
Simply put, on-demand warehousing and fulfillment provides a flexible model for businesses to scale their inventory levels and e-commerce fulfillment services in-line with customer demand. Warehouse space can be added or reduced as needed, and the costs match the level of service required. This comes as opposed to paying for year-long warehousing contracts that require high levels of inventory or using services like Amazon FBA that are expensive and provide little visibility into the fulfillment process. This is a simple but revolutionary shift, as most warehouse pricing models are built for companies with massive inventories and high-volume shipments. While such structures have made it almost impossible for small and medium sized businesses to afford an outsourced provider in the past, on-demand warehousing changes this.
Alongside the emergence of flexible warehouse pricing models, the continued development of cloud-based software is allowing for innovative providers to combine their warehousing and fulfillment services with a scalable technology offering. This combination allows businesses to cost-effectively outsource their warehousing and fulfillment workflows, while maintaining comprehensive oversight to the entire process.
Because the services leveraged by each individual user can be raised or lowered at any time without infringing upon inventory minimums or long-term contracts, the model is referred to as “on-demand” fulfillment. Over the past several years, this model has experienced significant traction as businesses recognize the cost-saving opportunities.
But who offers on-demand fulfillment and where do I start?
As on-demand fulfillment is still a relatively new concept, there are only a dozen or so providers currently operating in the space. But while all providers seek to establish a competitive value proposition, not all solutions can meet client expectations. However, through a combination of successful partnerships, sustained funding, and specialized personnel, on-demand provider Ware2Go has developed an offering that provides a range of distinct benefits to clients. To begin, Ware2Go does not require any inventory minimums or long-term contracts for companies that use our services, and client data shows that the average fulfillment savings rate achieved by transitioning to Ware2Go is 30%. What’s more, Ware2Go has built an extensive network of industry-leading warehouses so clients can strategically position their inventory and guarantee two-day shipping for clients across North America. Clients can track the status of their shipments, inventory levels, and orders in real-time through our flexible online platform, and also directly communicate with our customer service personnel online or via email and phone.
The value-add is clear. By combining an easy-to-use and scalable technology solution with industry-leading warehousing and fulfillment services, clients are equipped with all the tools they need to grow their business. And because Ware2Go manages all of the services and technology, you get comprehensive visibility and transparency across all your distribution and fulfillment workflows without adding any burden to yourself or your employees.
Ware2Go combines an easy-to-use and scalable technology solution with industry-leading warehousing and fulfillment services so that clients are equipped with all the tools they need to grow their business.
While on-demand warehousing may not be for every company – and it is certainly smart to exercise caution before investing in new software or services – the bottom line is that many businesses today are sidelined by an inability to support their own growth. This is especially true as customers increasingly expect a higher degree of efficiency from all their business partners. And without cost-effective technology or services to support these enhancements, growth for small and medium-sized businesses can stagnate as quality of service begins to dip. If all your peers are offering 2-day shipping or faster to clients, how can you compete? Are you prepared to build out an internal warehousing and fulfillment operation, or does it make more sense to outsource these processes to experts?
To answer these questions, small and mid-sized businesses owe it to themselves to inspect Ware2Go and our on-demand warehousing and fulfillment model. With so many companies already using Ware2Go to save costs, enhance their quality of service, and efficiently grow their business nationwide, there is no reason to put off an evaluation. You can easily view a demo, download a factsheet, or check out some of the real-world scenarios where we have helped companies just like yours. For more information about the value Ware2Go can provide, click here or contact a representative.
1 – The JOC Group. “U.S. Distribution & Warehouse Space Scarcer & Pricier” (2016-2017 study) https://www.joc.com/international-logistics/industrial-real-estate/us-distribution-and-warehouse-space-scarcer-and-pricier_20170613.html
2, 4 – Saddle Creek Logistics Services. “Ready or Not: Omnichannel Fulfillment & Distribution.” Peerless Research Group. 2017. http://www.sclogistics.com/wp-content/uploads/2018/08/WP_omnichannel-fulfilfillment-web.pdf
3 – UPS. “How Online Commerce is Disrupting Industrial Supply.” Whitepaper. Web. https://pressroom.ups.com/mobile0c9a66/assets/pdf/pressroom/white%20paper/Europe_whitePaper_v9_LR.pdf
5 - Strategic Treasurer & TD Bank 2019 Treasury Perspectives Survey. Web. https://strategictreasurer.com/2019-treasury-perspectives/