5 Benefits of Using an External E-Commerce Warehouse

By Staff Writer 6 Min Read

If you are starting an online business from home, you may wonder where to store your products. Warehousing items at home takes up a lot of space, and renting a portion of a warehouse can be very expensive. Fortunately, external e-commerce warehouses are designed specifically for small online company.

How does an e-commerce warehouse work?

An external e-commerce warehouse services drop shipping companies. A drop shipping company operates strictly online. It does not store the products that it sells.

A company will simply sell products online. When a customer buys one of those products, they will click on a buy button connected to the e-commerce warehouse. The e-commerce warehouse will take the cost of The product and shipping out of the seller’s profits. They will then ship the product to the customer.

There are 5 major benefits of using an external e-commerce warehouse.

1.   Minimize the Need for Employees

If you do not have inventory to manage, you will not need an inventory manager. If you have an online store, you can manage it yourself rather than hiring people to work in a brick-and-mortar store. The fewer people you have working for you, the less stress you will have.

You have worked hard to create your online business, and you want it to succeed. When you use an external e-commerce warehouse service,  you will not get bogged down in small details. You can focus on developing the look of your store and offering the best products available.

2.   No-Risk

You have been planning your store for a while, and you know exactly what products you want to sell and how you want to set up your online store. If you purchase those products and store them in your garage, you run the risk of people not buying them. Not only will you lose money, but you will lose space in your home.

One of the major advantages of starting an at-home business is its convenience. You should make sure that the services you use are designed to accommodate at-home businesses just like yours.

3.   No Overhead

Renting out warehouse space is very expensive. If you are thinking of renting out an entire warehouse, you must consider the cost of warehouse workers, equipment rental, and electricity.

If you use an e-commerce warehouse, they will simply charge you for each product you sell. You will not have to worry about leases or hiring people. Your products will be there for your customers to order as they want them.

Being able to order products on-demand benefits your customer. If a customer is unsure how many items they need, they can start with a large order and get more as the situation demands.

4.   The Ability to Offer a Wide Variety of Products

Any store will decide what products to offer by how well those products sell. Online stores are no exception. You do not want to overwhelm your customers with too many choices. Using an e-commerce warehouse is a great way to test various products.

If you sell funny T-shirts, you can test out several different shirts without ever having one printed. If you have created several designs that can be put on a sweatshirt or jacket, you can offer them side by side and see which one customers like best.

5.   You Won’t Have to Manage Shipping

Managing shipping is a job in itself. If your product is as successful as you hope, you will have something to ship every day. When you use an e-commerce warehouse, they will take care of sending your products out for you. They already have a contract with a shipper, and they often have discounts with them.

In some cases, shipping may be less expensive than it would be if you did it yourself. The larger e-commerce warehouses have facilities all over the country. Shipping is less expensive if the person you are shipping to is close to one of the warehouses. This may seem like a small thing, but it can save thousands of dollars a year.

Returns are also easier when you use e-commerce. The external e-commerce warehouse will include labels for returns. They will be able to instruct your customers on how to return a product if it is necessary. They will arrange for pick up for you. Arranging for returns can be very time-consuming. Any small business person will tell you that time is a valuable commodity when you are launching your business.

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