How to Set Up Warehouse Inventory

In a marketplace, including buying groups and vendors with drop shipping, there will be warehouses, fulfillment locations, and distribution centers, where shipments and items are processed. There’s a marriage of data between the sellers, the suppliers, and the marketplace fulfillment and logistics components.

A great example of this is Amazon. Amazon has extensive warehousing and distribution centers where they can take the inventory for certain sellers, store it for them, and put it into their inventory. Then they use those warehouses as distribution centers so that the lead times to distribute and fulfill inventory for a vendor or seller is reduced dramatically.

This is a pretty common theme as scale up your marketplace, is this ability to fulfill at scale, and enabling inventory to be distributed across your infrastructure, even though it may not technically be inventory that you directly own.

Another scenario is that you have inventory that is actually part of the marketplace, where you’re selling inventory in the same categories as some of your vendors and sellers, and they end up competing. And you need to be able to show data about those.

All of this funnels back into the marketplace where the end users, the buyers, are doing the research and looking for items and one of the things that they're going to need to see is whether or not items are in stock and when they will be back in stock if they’re not. It’s also about having the ability to do a transfer from one warehouse to another, or just see what physical location has availability. Typically, this is simplified into what the lead time would be based on the user’s location.

Enable Split Shipments to Warehouse Distribution Centers

In many cases, it’s also pertinent information to be able to offer the purchaser the ability to determine if they want to split the shipment or fulfillment of their order across multiple locations or multiple warehouse distribution centers. Split shipping is often done when a home office is purchasing for multiple locations.

If they do, and it's very shipping-intensive or a significant portion of the order is the shipping costs and logistics, then it’s extremely important to be able to show the containerization or palletization of the contents, and what the impact would be if they need to fulfill something at a different warehouse. Then the customer can see if they need to continue to fill this pallet from this warehouse in order to completely fill it and optimize shipping costs, for example.

Split shipment is a key aspect for many buyers because they’re looking to reduce the overall purchase cost, not just the product costs, and this can be a hidden aspect of cost if the data isn’t available until further down the order.

In summary, whenever someone is on the marketplace and they're looking to make a purchase, and they're looking to compare the cost for different vendors in the marketplace for the same product, they need to be able to see the cost of the shipping, the lead time, and total time for the item to arrive, as well as other aspects such as ratings and reviews of the seller.

Ultimately, they need to have this seamless set of data that is typically going to be behind the scenes of warehouse information, distribution centers, the inventory data, and which particular vendor is filling each of those items. With this information, a customer has a simple view of how long an item will take to get to them if they choose a particular warehouse, and whether they need containerization, palletization, or otherwise grouping of the items by location, and other ways to optimize the shipping costs.

Another aspect of warehouses and inventory is that many businesses will constantly transfer items between locations by default. It's not particularly more expensive to fill their transfer trucks that are going as long as they're not exponentially increasing the number of transfers. They typically will have a mostly empty vehicle that's doing the transfers between their locations, other warehouses, etc.

As a function of overall expense versus utility, this is similar to ground shipping level costs or even less, for the marketplace logistics team to transfer items between locations versus doing that last mile delivery where it's going from one of these logistics distribution hubs, etc., to an actual physical address.

Given this method, transferring between locations may not be very expensive. We want to present the end user with those options too, especially if they're purchasing really expensive items or they’re purchasing a significant volume. They might be willing to purchase a few to be expedited, but the rest just need to be transferred to the closest distribution center. And they can even have their team go pick the items up. That's something that happens quite often.

Whether it's doing that or doing a transfer and then completing last mile delivery, these are all things that we need to be able to enable to be competitive in certain spaces. It depends on what your users are looking for in the marketplace and what their needs are. But these are all options that we want to be able to consider and that with the integrations to your back-office systems, ERP, CRM, warehouse management, etc., need to be able to bring to the eCommerce marketplace.

Additional Resources for e-Marketplace

• Key Marketplace Considerations
• Filtering and Categorization of Products
• Content Sourcing Practices & Workflows
• Best Buyer Dashboard Features
• Best Cart Features & Workflows
• Best Checkout Workflows & Payment Methods
• Establishing an eMarket - Vendor Portals
• eMarket Success - Vendor Portals
• eMarket Line of Business Integrations – Vendor Portals

• eCommerce Inventory Management – Vendor Portals
• Marketplace Advertising Best Practices – Vendor Portals
• Key Aspects of Split Shipment for eCommerce Marketplace Management
• Split Payment Utility in Marketplace Software
• Considerations for RMAs in eCommerce Marketplace
• eMarket Integrations: Products, Categories, & Marketing Content
• eMarket Integrations: Customer Specific Pricing Rules
• eMarket Integrations: Warehousing & Inventory Strategy