Archive for category Warehousing
Generating Profits Through Wholesaling
Posted by Scott in Home Based Business, Warehousing, Wholesale, Wholesale Sources on July 16th, 2009
Today’s intense economic climate has people everywhere scrambling to save as much money as possible. To many of us, frugality is so ingrained into us that we naturally seek out the best deal, whether it comes to picking out a toaster or purchasing a new car.
In the case of an entrepreneur looking to establish a business, the hurdle discovering a source for the lowest prices of the goods you plan to sell is heightened. It is at this crucial crossroads where various wholesale sources are brought into the fold. A wholesaler engages in trade either through a distribution broker who acts on the behalf of the manufacturer or bypasses the broker entirely and buys directly from the manufacturer.
The greatest advantage of purchasing goods at wholesale is the massive price gap between those of wholesale and retail, as much as 50 - 70 percent off. Local competitors and businesses abroad will be purchasing products at many of the same wholesaler sources. Since these sources rely on a high volume of sales to generate their revenue you will often find that placing orders in large quantities will grant you even deeper discounts.
You will find that you are able to add significant value to your bottom line by purchasing products from a wholesaler. The wholesaler enables you gain high quality products to sell at much less expense, while simultaneously increasing your margins and allowing for a discounted strategy that has great potential to increase your company stock turnover rate.
Managing Your Website Inventory
Posted by Bob in Bulk Drop Shipping, Drop Shipping, Warehousing, Wholesale, Wholesale Sources on July 1st, 2009
One of the potentially challenging tasks of running an online storefront on your website is accurately and efficiently managing your website inventory. Because you drop ship, you don’t have to go out to a warehouse and try to count every unit, or even go into your back room and move cabinets around to find everything. Instead, you have to rely on your wholesale vendor’s records in order to keep track of your own website inventory for your products.
There are several ways to go about tracking your wholesale suppliers’ inventories and getting your own website inventory in line with those numbers. Some ways are much more complex and time consuming than others.
One way you can manage your website inventory is with a manually-created database, or with your own database management software. In this type of configuration, you gather the inventory data from your supplier’s web site and manually enter it into the software. You update this information on a regular basis, probably at least daily.
This is the least efficient method of doing things. First, there are the extra steps of actually having to manually pull and re-enter the inventory data. Second, this configuration is the most likely to leave your customers stranded as your supplier runs out of an item that you keep selling. If you currently manage your website inventory this way, you should consider alternatives.
Many wholesale vendors now offer an electronic export of their inventory data. You may be able to pull that data directly, and update your own database in a more automated fashion. This lets you keep better tabs on your supplier, and it eliminates some of your work. Still, you have to monitor your database to make sure that you don’t run out of a particular item, and that when you do you have to manually update your website.
In an ideal situation, you will automate the entire process. Some wholesalers offer a full integration package that will not only electronically update you as to the inventory status of an item, but that can actually interface with your ecommerce software in order to let it know if a given item is out of stock. This means that your customers won’t be able to buy an item if it’s out of stock, because your actual website inventory is updated in real time.
If you run a drop ship business, talk to your wholesale supplier to see what kinds of inventory management interfaces might be available in your situation.
How Warehouse Management Systems Streamline Productivity
Posted by Alex in Warehousing, eBusiness on June 10th, 2009
A primary goal of many e-commerce businesses is to enhance customer service levels. In order to increase retention rate and gain consumer loyalty, it’s necessary to successfully address the needs and desires of your audience. If you’ve opted to invest in warehouse space to expand your product offering for your consumers, then a warehouse management system will help to improve efficiencies and operations. A warehouse management system can streamline productivity by providing your business with a number of unique benefits and cost-saving solutions.
Warehouse management systems are critical software solutions that are designed to control the movement and the storage of materials within your space. They essentially connect warehouse employees to back-end application servers that record warehouse activities with a wireless handheld device. The system assigns employees to designated areas and responsibilities within the warehouse, and alerts them to priorities and needs. Product bar code data is entered into the system and provides employees with a number of unique specifications. From product measurements to location coordinates to the number of products in a particular box, and the number of boxes in a particular pallet, warehouse management systems provide employees with accurate storage conditions and real-time order information.
Further, warehouse management systems are designed to control light manufacturing, transportation management, and order management. They can help to drastically reduce warehouse labor and logistics costs while simultaneously alleviating pressure on product margins. The introduction of a wireless process eliminates the need for personnel to manually perform tasks that can be computed by the system. This alone can reduce overhead by eradicating the need for additional personnel. User-defined parameters function to direct warehouse tasks, which will allow workers to locate items quickly and easily, while also being able to provide accurate and updated information about stock availability to customers. Investing in a warehouse management solution can be especially helpful and cost-effective if your business operates a warehouse that processes a high number of daily transactions.
Additional benefits that warehouse management systems provide include: directed put-away and directed order picking, warehouse capacity management, and automated data collection. Automated data collection results in increased data accuracy, which enhances customer service levels by reducing cycle time. Moreover, each of these functions translates into tangible cost savings that can be used in a more effective capacity, such as in online or offline marketing and advertising efforts. Further, warehouse management systems ultimately maximize the efficiency of the receipt and shipment of goods while optimizing warehouse space and improving levels of service.
Streamlining productivity is essential to the core of any online or e-commerce company. It’s important to ensure that business, technological, and operational processes are functioning smoothly in order to provide consumers with the highest level of customer service. Investing in a warehouse management system will enable your warehouse team to function fluidly and accurately. A WMS is a cost-effective process improvement initiative that will enhance service while reducing overhead and increasing overall efficiencies and logistics involved in your operation. Afford your business the opportunity of experiencing a significant increase in productivity by leveraging the benefits of a warehouse management system.
Drop Shipping as an e-commerce Strategy
Posted by Wholesale News in Drop Shipping, Ebay, Home Based Business, Warehousing, Wholesale, Wholesale Sources, eBusiness on May 28th, 2009
Starting your own company can clearly be an intimidating and challenging venture. There are a number of critical factors to consider before you jump in with both feet, although the rewards may outweigh the risks, if you play your cards right and do your research. Building and growing a successful e-commerce company depends on a number of elements, including how effectively you intertwine various deliverables and strategies, the competitive landscape of the niche of products that you’re hoping to market and sell, and the advantages of drop shipping. Investigating the benefits of drop shipping may just prove to be your pot of gold when you’re initiating the development of your e-commerce company.
Quite simply, drop shipping boasts a plethora of unique advantages and is certainly a method, service, and strategy worth examining. First and foremost, through drop shipping, you virtually eliminate stock and inventory issues as well as the need for warehouse space. While you cannot control the amount of back-orders or the occurrence of discontinued product, you save yourself some money by not having to invest resources into purchasing bulk quantities. Although this naturally disrupts the balance between e-commerce storefronts and brick and mortar facilities, it does leave you, as an e-commerce entrepreneur, with additional resources to invest in advertising channels. Further, selling discontinued product becomes more of an opportunity to capitalize on than a concern. Suppliers and distributors will generally turn to online storefronts to promote sales and discounts in order to move product more efficiently. As a brick and mortar retailer, you’re essentially responsible for finding creative ways to move this product on your own.
In addition to lack of inventory, drop shipping reduces shipping and delivery concerns. As you’re uploading product onto your site, you can strategically build shipping costs into your retail pricing in order to ensure that your sales will be profitable. Further, you free yourself of the need to invest in manpower dedicated purely to loading and unloading packages, as well as the need to pay for both freight-in and freight-out charges. Drop shipping calls upon suppliers and distributors to package and ship product, which provides you with the opportunity to spend your time and energy on ramping up your marketing and advertising efforts, as well as the chance to more efficiently allocate your resources.
Perhaps most importantly, by incorporating drop shipping into your overall e-commerce strategy, you immediately reduce your overhead. Leveraging the benefits of drop shipping to maximize your profits and to increase efficiency will inevitably translate into higher sales conversion rates and more efficient spending. Because you relinquish yourself of the need to house product, you can realize higher profit margins and funnel your newfound riches back into various advertising channels in order to create more exposure for your brand and your company. Once you have established your overall e-commerce strategy, you can more effectively build your brand and expand your business. Moral of the story, capitalize on drop shipping so that you can efficiently create unique opportunities for your business while maximizing resources and profits.
Warehousing Wholesale e-Business Inventory
Posted by Wholesale News in Warehousing on April 7th, 2009
Strictly drop shipping wholesale e-businesses have no need for warehouse space. It is one of the many benefits of running a drop shipping wholesale business. Successful drop shipping e-biz owners can grow their business by expanding the ways in which they sell inventory. The most common form of growth is reinvesting profits into a retail business selling wholesale items. Moving beyond drop shipping wholesale items, inventory storage becomes an issue. There are three warehouse options for wholesale e-Business owners to consider.
Use Your Most Convenient Warehouse — Your Home
A small retail business selling wholesale, overstock, and liquidated items is usually stored suficiently in a private home. This is for a wholesale e-business owner looking to sell select wholesale items at retail prices. We are not talking truckloads or even pallets of wholesale items; more like buying wholesale caseloads to sell items individually at retail prices. Wholesale products can be sold for retail prices in a variety of outlets. Easy places to start are on other web properties; Internet market sites like eBay, Craigs List, or local classifieds; or in low-cost retail space such as a mall booth, table at a swap meet or flea market, and established businesses like salons or consignment boutiques.
Success in selling wholesale items at retail prices is addictive! It won’t be long before a personal home living space is outgrown as adequate warehouse space. Before using a private home for inventory storage, there are a few concerns an exclusive drop shipping wholesaler should consider.
- Holding physical inventory of wholesale items changes sales tax requirements, and tax write-offs. Wholesale e-business owners transitioning from strictly drop shipping to retail sales of wholesale items should familiarize themselves with pertinent tax law or seek the advice of a tax professional.
- Home insurance policies frequently treat business inventory differently than personal possessions, if the business inventory is even insured under the existing home insurance policy! Contact your home insurance company to learn details and possibly pay for a policy rider to cover the value of wholesale business inventory in the event of an emergency.
Outgrown the Home Garage, Renting Personal Storage Space as a Warehouse
The next warehouse option for wholesale e-business owners also involved in retail sales is a local personal storage unit. There are many benefits for selecting personal storage space over a private living space. First, the private living space may not be ideal to accommodate wholesale stock. This is especially the case for small living spaces like apartments, or even large homes with many family members. No sense in forcing your family to literally trip over your new retail business in the hallway!
Also, personal storage space companies are required to carry insurance on the contents of every rented space. It may not be as much coverage as a wholesale e-business needs. Insurance in this case is typically a set number of cents per pound. However, this insurance coverage incorporated into the rental price can make other business inventory insurance premiums more affordable. Every personal storage space is different, but here are some of the issues wholesale e-business owners should see resolved before leaving any wholesale inventory in the care of personal storage space companies:
- Climate control usually doubles the monthly rent on storage spaces. Smart wholesale e-business owners will rent two spaces. First, a large and cheaper non climate controlled space for stock that does not need temperature regulation. Second, a smaller climate controlled space only for stock that requires a temperature range to remain marketable, if needed.
- Long term leases paid up front often yield a significant savings on the monthly rental fee. If it isn’t offered by the public storage company, ask.
- Access is very important depending on the turn over in wholesale stock. Be clear about the hours your wholesale stock is available, how many people you can designate to pick up and drop off, and how your personal storage space is accessed.
- Check on security. Make sure the cameras are actually recording clear video and not just decoys to deter thieves. Decoys do not help in the event a real theft. Look into local police records for any break-ins occurring on the site.
- Use your business relationship with the public storage space to pursue a deal with the company about selling abandoned property. The public storage company may be only too happy to sell you abandoned property for pennies on the dollar.
Renting Commercial Warehouse Space for Wholesale Inventory
It takes a great deal of volume in retail sales to support and justify renting commercial warehouse space for storing wholesale stock. Local classified listings will show the going rates per square foot, but each property will have different amenities. Listings usually are priced per square foot of warehouse space. The rental prices may immediately sound like great savings over the monthly cost of public storage space for a much smaller space. However, before leasing commercial warehouse space, every wholesale e-business owner should ensure the warehouse space is indeed a deal by considering these issues:
- First, business 101 states the monthly profit from retail sales of the wholesale items must exceed the warehouse rental cost and any other related storage costs. Otherwise, your warehouse option will bleed your e-Business dry.
- Rent amounts do not typically include utility costs, equipment such as forklifts to maximize space usage, nor the staff to maintain manifests of items stored which is a large job for a sole proprietor to cover.
- Putting utilities in your company’s name for a commercial space is very costly for any business. Utilities charge higher rates for business or commercial use than private homes, and most accounts require a significant deposit for utility turn on.
- Security and insurance is completely on your shoulders. This is another added cost to the monthly rent.
Warehouse space for wholesale e-businesses is not difficult to obtain, but the level of warehousing needs to be appropriate for the growth of the wholesale business into a retail entity. In strictly drop-shipping wholesale e-businesses, the issue of warehouse space is never even a concern. Once a wholesale e-business owner steps into the retail realm, he or she must be prepared to negotiate lease agreements and incorporate warehousing costs into their profit calculations. There is no reason to be discouraged by securing wholesale warehouse space, but most wholesale e-business owners should start small and may never need commercial warehouse space.
-
-
You are currently browsing the archives for the Warehousing category.
Recent Comments