Nowadays, some small and medium-sized e-commerce companies have high warehousing costs and slow capital turnover, which affects cash flow, inventory backlog, and rising management costs and labor costs! So what should we do if e-commerce warehousing costs are too high? How to save yourself? Below, the editor of Baoshiyuncang will introduce it to you!
1.E-commerce warehousing and deliveryReasons for excessive cost
If you want to understand why e-commerce warehousing costs are too high, you must understand the composition of warehousing costs!
E-commerce warehousing costs mainly consist of three aspects: 1) site costs; 2) equipment costs; 3) labor costs.
The site costs mainly include: warehouse rent, property fees, water, electricity, heating, gas, etc.;
Equipment costs mainly include: storage equipment (shelves, pallets), handling equipment (forklifts, ground cattle, etc.);
Labor costs mainly include: in addition to personnel wages, they should also include five insurances, one housing fund, welfare, etc.
Of course, there are some factors in warehousing operations that will also lead to rising costs, such as low storage space utilization, low personnel work efficiency, etc. These will also lead to excessively high e-commerce warehousing costs!
2. What are the harms caused by the high cost of e-commerce warehousing and delivery?
For e-commerce merchants, high warehousing costs will affect the merchant's overall cost. If the selling price remains unchanged and the sales volume remains unchanged, it will cause the merchant's gross profit to decrease.
Assuming that e-commerce merchants still want to maintain the original gross profit margin, but other aspects of costs cannot be controlled, then the price must be increased based on the original price. However, if the price increases, it is likely to affect sales, and ultimately it will still be reflected in the merchant's profits, resulting in a decline in gross profit.
In the long run, if cost control is improper, it may even lead to a decline in the competitiveness of merchants.
3. What should we do if e-commerce warehousing costs are too high?
1. Warehousing cost control
If you operate the warehousing yourself, you must find ways to optimize all aspects of warehousing and reduce warehousing costs. In terms of labor cost/equipment cost savings, you can improve employee work efficiency by optimizing the operating process or using performance appraisal, thereby reducing the number of personnel and equipment. For site costs, it is recommended to re-optimize the layout and increase the unit area and space utilization, thereby reducing the rental area.
Cloud warehouse shipping is to outsource the storage and distribution of goods to a third-party fulfillment warehouse company for the following reasons:
1) The fulfillment warehouse delivery team is more professional and can flexibly adjust the rental warehouse area;
2) Reduce warehousing capital investment, avoid cash flow problems, and reduce risks;
3) When faced with fluctuations in business volume, it can respond quickly without adding too many resources.
The above are the reasons and solutions for the high e-commerce warehousing costs. E-commerce merchants can choose according to their own needs! Baoshi Fulfillment, as a professional fulfillment warehouse delivery company in China, relies on high-end warehouse hardware facilities, advanced management technology, safe operation network, and scientific resource integration to provide integrated warehousing and logistics services such as warehousing, sorting, distribution, circulation processing, etc. for many well-known corporate brands such as Montblanc, Swarovski, Lindt, and Onkyo. Interested e-commerce users can consult Baoshi’s online customer service staff!
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