Stories of Small Businesses Constrained by Growth
During my early days as an analyst in the supply chain industry, I came across a case study that featured a Las Vegas-based business called PR Diamond. As a 35-year old manufacturer of diamond blades for the construction industry, PR Diamond had over time developed an in-house process for manufacturing, storing, and then shipping their equipment across the United States for delivery to customers.
However, as their customer base expanded and order volumes increased, PR Diamond’s staff listed the challenges of picking, packing, and shipping their products within a time frame that met customer expectations as one of their largest operational pain points. With only a few employees available to deal with fulfilling orders, any prolonged period of heightened customer demand would put massive strain on PR Diamond’s internal personnel.
As a former carrier of A/C parts for a local HVAC company, their struggle resonated with me.
Nearly a decade ago, I was fulfilling orders for an Atlanta-based company from a warehouse in the city to the surrounding suburbs. As I quickly discovered, even for a company with a relatively small customer footprint, the challenge of quickly picking, packing, and loading shipments onto a delivery truck for transport across the city was a major burden. Complications caused by an overflow of new orders (especially during the July-August months) frequently caused stock outages and delivery delays. But without the resources to expand our distribution network or hire more staff, it was up to just a few of us to ensure that new orders were shipped on time.
For the small family-owned company I worked for, maintaining these in-house fulfillment workflows took considerable effort. And yet, because our customers were expecting us to deliver A/C equipment as quickly as possible (or risk going another day without cooling during Georgia’s 90-degree summers), it was a struggle we simply had to endure. But suppose there were another way?
Managing a Nationwide Customer Base Requires a Streamlined Order Fulfillment Process
While the A/C company I worked for was only servicing a small region of Georgia, there are many other businesses today with a nationwide or even global customer footprint. For these businesses, managing fulfillment with just a few employees is not a viable option. They have to think bigger.
For small businesses dealing with high shipment volumes or complex (heavy or bulky) products, having to personally pick, pack, and ship every new order can quickly become overwhelming. This is especially true as the rise of e-commerce gives businesses access to a broader base of potential customers. For businesses that sell online, the reality is that you could suddenly attract new customers on the other side of the nation country at a moment’s notice. But without the right fulfillment structure, you may not be able to effectively reach them.
With regards to your own business, consider a scenario where customers begin ordering products from a new location, be it Canada, California, New York, or Texas. This is great news from a sales standpoint, as it means you are being exposed to a larger base of buyers. But while the ability to leverage your online presence to increase sales is an advantage, consider what it takes to cost-effectively and efficiently deliver your products to these far-away customers.
COMMON FULFILLMENT & DELIVERY CHALLENGES THAT SMALL BUSINESSES FACE
Small Businesses are Under Pressure to Fulfill Orders Quickly & Cheaply
In today’s competitive business environment, customer expectations for e-commerce have grown incredibly demanding. This is true both with regards to how fast they expect orders to arrive, and how much it will cost them to ship. In a 2017 study by UPS, it was discovered that 60% of businesses expected delivery within 1-2 days. These expectations for fast delivery have continued to rise as a younger generation of buyers (i.e. Millennials and Gen-Z) increasingly penetrate the market. Most recently, a 2019 study found that 82% of 17-24 year-olds are willing to pay extra for accelerated delivery options.
However, heightened expectations for delivery speeds have not meant that the cost of shipping is suddenly irrelevant. In fact, unexpected or overly expensive shipping costs remain as the top reason that shoppers choose not to complete their online purchases.
Today’s customers don’t want to have to choose between fast shipping or cheap shipping. They want, and have come to expect, both. And in a fast-evolving market where huge companies like Amazon and Walmart are delivering next-day or even same-day shipping to customers at little cost, small businesses are under immense pressure to increase the efficiency of their own fulfillment workflows or risk falling behind.
However, achieving this level of fulfillment efficiency requires access to a nationwide distribution network that few small businesses can create themselves. And without the millions or billions of dollars in funding available to the industry’s largest players, these small businesses are struggling to compete. But given their circumstances, where should small businesses even start? How can they upgrade their fulfillment workflows without exhausting their budget, or obtain the bandwidth necessary to quickly fulfill orders without overwhelming their staff?
For a growing number of small and mid-sized businesses, the answer lies in on-demand warehousing and fulfillment.
5 Ways On-Demand Warehousing & Fulfillment Enables Small Business Growth
For those unfamiliar with the concept, on-demand warehousing and fulfillment is simply a service that provides businesses with a network of warehouses across the country that they can use as-needed to position their inventory closer to customers. The on-demand provider manages the network of warehouses and helps businesses strategically select and then inbound their inventory to the most appropriate locations. Then, as new customer orders are captured, the on-demand provider will manage all pick, pack, and delivery workflows on the client’s behalf.
Looking at the on-demand warehousing space, one of the leading providers that has emerged in recent years is Ware2Go, a UPS-founded company headquartered in Atlanta. As a result of UPS and Ware2Go’s partnership, small businesses are provided with the following benefits:
HOW ON-DEMAND WAREHOUSING BENEFITS SMALL BUSINESSES
- Access a Nationwide Network of Warehouses. Ware2Go maintains a large and rapidly growing network of warehouses across North America. This means merchants that use Ware2Go can strategically place portions of their inventory in facilities across the U.S. so that all their clients have access to 1-2-day shipping services. And because Ware2Go manages all the warehouse relationships and resources, the cost for merchants to use these facilities is minimal.
- Gain Complete Flexibility to Scale Your Usage Up or Down. Flexible service agreements allow businesses to flex their warehouse and labor costs up or down according to demand. And, they can add or reduce their inventory levels across any of their warehouses at any time, without incurring penalties or additional costs. This ensures that businesses are able to match their warehousing and fulfillment usage to meet their exact business requirements.
- Achieve Visibility to all Inventory Levels & Delivery Statuses. As merchants begin using the Ware2Go service, they gain comprehensive visibility to all the operations, inventory levels, and delivery statuses occurring across their network. This works by connecting all warehouses in the Ware2Go network to an online warehouse and order management system, and then providing the merchant with an account for accessing the system. The merchant can use this solution to inbound more inventory, monitor daily operations, and perform a range of other customer support, inventory management, and warehouse management tasks.
- Guarantee 1-2-Day Shipping for All Your Customers. Because of Ware2Go and UPS’s close partnership, merchants that use Ware2Go for warehousing and fulfillment also gain access to discounted shipping from UPS. UPS’s shipping services available through Ware2Go guarantee 1-2-day delivery for all customers nationwide with 99.5% accuracy.
- Unlock Data & Tools That Streamline Your Supply Chain. In combination with our warehouse network and technology solution, Ware2Go provides a range of self-service tools and analyst assistance to all our merchants. Ware2Go’s capabilities in this arena enable merchants to strategically decide which warehouses they should leverage across our network in order to maximize delivery speeds while limiting transportation costs. We also help merchants identify the exact amount of inventory they should keep in stock across each warehouse by product type and season so that their storage and inventory carry costs are minimized. And finally, we identify the optimal reorder points for merchants across all their SKUs so that they never experience stock-outs or delivery delays.
The cumulative result of the above benefits is that small businesses can access all the storage space, fulfillment equipment, and resources they need to expand their business and support more customers without having to add significant costs. There is no need to purchase their own warehouses or equipment, or even add more staff to fulfill orders. Ware2Go handles all of these tasks on the merchant’s behalf and provides visibility to everything they do through their online solution.
Final Thoughts & Next Steps
While it is true that on-demand warehousing may not be a perfect fit for every company, 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.
As this dilemma persists, it is essential for small businesses to adopt streamlined fulfillment workflows that allow them to more effectively service their customers. This need is ultimately what has driven companies like PR Diamond, Holistic Hound, COOLERSbyU, and many others to leverage Ware2Go’s on-demand fulfillment network.
With so many small businesses already using Ware2Go to save costs, enhance their quality of service, and efficiently grow their business nationwide, we encourage you to evaluate whether the model is right for your company. For more information about the value Ware2Go and UPS can provide, click here or contact a representative. For access to additional warehousing, fulfillment and logistics content, join the Ware2Go Newsletter.