Selling online is easier than ever, with consumers of all ages now enjoying the convenience of home shopping. It makes eCommerce an inviting business prospect for startups and established businesses alike, as overheads can be kept low and flexible working hours are possible. Stock storage is one of the biggest challenges faced by eCommerce businesses, with many struggling to find a system that’s efficient in terms of cost and time.
As the business grows, organising, locating and efficiently handling stock becomes more of an issue. Very small, or micro, businesses with restricted stock lines or limited numbers of items can get away with an ad hoc system. Once product lines and quantity of items increases, however, anticipated profits could vanish if you don’t have the organisation to quickly locate sold items.
Whether you segment according to product type or you take a seasonal approach, clear labelling and designated areas within the storage facility (whether at home, warehousing, self storage, or any other) will cut handling and packing time.
While online retailing has proved a boon for small business owners and made it relatively easy for anyone to enter the eCommerce arena, the other side of the coin is a fast-moving market and associated need for flexibility.
If sellers can’t keep up with demand, hop on rising trends, or take advantage of overstock or bulk buying bargains, expansion opportunities are easily missed. In order to make fast buying decisions, online sellers need flexibility built into their storage facility so they can buy with confidence. Flexibility is one of the big attractions with self storage companies, since most have short term lease arrangements that allow business owners to expand or contract their storage space at very short notice. Other self storage advantages include:
- Enhanced site security and individually locked rooms
- Convenient town locations
- Good vehicular access for large lorries
- Fork lift or pallet truck availability
- Long opening hours
- Additional business services such as couriers
- All business charges (VAT, rates, utilities) included
Buy low, sell high has long been the mantra of sales people, but what happens in between those two vital operations? Stock has to go somewhere, and the need for large storage areas like warehousing can come with prohibitive costs. One way around this overhead vs. profit dilemma is to team up with fellow business owners and share warehouse space.
Challenges to overcome include how you’ll divide the area to keep stock separate, what security is in place if people outside your business have access to the space, and raising funds for initial outlays such as utilities, VAT and service charges. Whilst a viable solution for those with larger storage needs, make sure you draw up contracts between all parties before going ahead.
There’s a huge movement towards virtual stock, with apps appearing everyday for just about everything you can think of. Add to apps the popularity of eBooks, downloadable digital assets like music or photographs, and maybe you don’t need to hold physical stock at all.
Naturally there are restrictions, in that you can’t sell digital products you don’t own the rights (intellectual property) to, and there are some category listing restrictions too on eBay. However, adding digital products to your inventory list could be a way of increasing your product line without incurring additional storage costs (unless you need lots of cloud storage in which case a subscription fee would probably apply).
The ‘No Storage’ Model
Allowing other people to shoulder the burden of storage might sound like cheating or pie in the sky, but that’s effectively what you’re doing if you adopt a dropship business model.
The dropshipping company stores the stock and normally you have access to their entire product range. You buy stock as it’s needed, and while your customer buys from you, the dropshipper mails it out to the customer on your behalf. Pitfalls in this business model include the risk of the item not arriving (stock control is out of your hands), and the higher prices you’ll pay for the convenience. Research carefully before signing up with a dropshipper so you’re sure of the product quality and price.
Ecommerce offers so many possibilities it’s no wonder big name brands are heavily involved and happily, their presence extends credibility to smaller businesses. Choosing the right storage, however, is key to efficient online selling in all its forms.