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Shopify is a great eCommerce tool. But as your business scales, there are some clear signs that it will need to be integrated with something else to keep the flow of products going. This is where automated inventory management and warehouse management come into play.
Shopify has helped countless people set up online stores. As a cloud-based eCommerce website builder, it does a great job. It solves the problems many new companies face: Finding a way to showcase products online, take orders, and process payments.
Once those problems are solved and a company scales, a different set of challenges emerges. Shopify can help with some of them, but others are outside the platform’s scope.
When this happens, it doesn’t mean that your business needs to ditch Shopify for another product. You might simply need to integrate it with another product that can manage the rest of the company’s activity—particularly automated inventory management and warehouse management. There are some clear signs that it’s time for the next step.
Much of the hype around Shopify is due to its ease of use, especially for companies just starting out. For a low monthly fee, sellers can get Shopify Lite to easily build a website with a “buy” button. Shopify Plus offers a more robust platform for larger companies handling hundreds or even thousands of SKUs. A number of free and paid apps are also available to add on other functions such as customer chat, abandoned cart notifications, and shipping details.
Shopify excels at facilitating sales. A company could use Shopify all by itself—and many do. Take for example a small mom and pop store that decides to start selling online. Customers browse the products and place their orders on the store’s website. Store employees are notified of the orders, pull the items off the store or warehouse shelves, pack them up, and send them out to the customer.
This way of working might be sustainable for a small number of items and orders. For a larger company, however, keeping up with the flow of orders will soon become problematic. Successful order fulfillment includes a number of moving parts besides making the sale. If a company is going to scale, they need to pay attention to the big picture.
An eCommerce company, whether self-managed or using a 3PL, must optimize every aspect of their operation from the moment an order is placed with a vendor until an item departs on its way to the customer. Alongside Shopify for the order placement process, growing companies need to consider adding inventory management and a robust warehouse management system to the mix.
These signs will let you know when it’s time:
People filling Shopify orders manually is fine, as long as they can keep up. That’s difficult when orders or the number of products increase. Manual inventory counts, paper spreadsheets, and hard keyed data entry reduce productivity and increase the chances of human error. Both interfere with a company’s potential growth.
It’s easy for items to run out when there isn’t a clear picture of inventory levels. Having a system to know when stock is running low will help. But if it’s still up to an employee to act on that information and contact the supplier, you’re likely to have a lot of backorders.
Backorders are even more likely when dealing with multiple sales channels. Say there’s only one tennis racket left on the warehouse shelf. As soon as it is sold on one eCommerce platform, it should be marked as “out of stock” on all platforms. Failure to do so in real-time creates unexpected backorders and unhappy customers.
A lack of awareness about what’s going on with members of the supply chain can have implications for eCommerce. For example, it is essential to have communication from a vendor if a regularly scheduled shipment will be delayed. Likewise, the vendor should know of an anticipated seasonal spike coming up. Many companies also use the same suppliers or shipping partners even if another company might have better quality, a better price, or faster delivery. The supply chain can be as important to productivity and profitability as what’s going on within the warehouse.
Shopify does provide reports that show which products are performing and which are not. This historical data can be helpful in understanding what has happened, but may not provide much in the way of predictive analytics. More meaningful reports that analyze trends and profitability might be necessary for strategizing.
Integrating WMS with what Shopify is already accomplishing can help eCommerce businesses address each of these issues.
Simple automation solutions like barcode scanners can do away with manual tasks like inventory tracking on spreadsheets, data entry, and label printing. As the business grows, automation with material handling equipment can make order fulfillment faster, safer, and more accurate.
Running out of stock is bad, but so is having too much. It puts a strain on storage and risks waste due to spoilage, shifting consumer tastes or seasonal changes. Inventory management systems monitor stock quantities to keep the right balance. The system can be set to not only send alerts when it’s time to place an order, it can also initiate the order automatically based on pre-set rules.
Different eCommerce sales channels must communicate with one another. If a company is selling through Shopify, but also on Amazon, and a brick and mortar store, it is nearly impossible to know where inventory levels stand without a WMS. Managers will know inventory quantities and item locations in real-time.
Integration with the entire supply chain is also possible with WMS. Managers can keep a handle on shipments that are scheduled to arrive from various vendors. They can also determine the fastest and most cost-efficient shipping providers at any given time. If they’re working with a 3PL, they can be tuned into that data too. Knowing what to expect from partner companies on both ends of the sales process provides the necessary transparency for smart decisions.
Reports that not only analyze historical information but provide predictions about what is to come is essential once a business starts to scale. Managers can anticipate seasonal spikes and ramp up orders to prepare. They can also see the order volume for any given day and adjust staffing accordingly. A robust WMS allows customization so specific KPIs can be monitored. All of this data is valuable for strategizing and planning for growth.
Shopify does a lot, but it isn’t an all-purpose solution. Companies that have grown the eCommerce businesses past a certain point need help with things that Shopify simply wasn’t built to do.
Adding WMS enhances Shopify’s usefulness by managing inventory, the supply chain, and many processes inside the warehouse. It is the best tool for mapping out an efficient warehouse layout, organizing storage, choosing a picking method and drawing pick paths. In short, it can optimize every aspect of an eCommerce business. Scaling becomes a natural progression without bottlenecks and limitations.
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