The market for warehouse management software is anticipated to rise to $7.90 billion by 2027, up from $4.16 billion in 2019.
As the industry grows, streamlined warehouse operations are increasingly pivotal to the success of retail and ecommerce companies.
In order to scale while navigating a tight labor market and potential space constraints, ecommerce companies need to find a Warehouse Management System (WMS) that meets their needs.
Finding the best fitting WMS can be challenging, but if done correctly, can improve accuracy, reduce costs, and increase overall efficiency.
What is a WMS?
A Warehouse Management System (WMS) helps control and manage all warehouse and distribution operations: the tracking, labeling, and reporting of inventory coming in, inventory sitting, and inventory going out.
It can be used to streamline and optimize everything across inventory and order management, including receiving, putaway, picking, packing, shipping, and dispatch.
A WMS can also be used to manage warehouse labor and manage additional software tools and integrations across three phases of inventory: inventory in, sitting, and out.
There are generally three different tiers of usage when it comes to warehouse management solutions for ecommerce companies.
- Tier 1: Solutions in this tier mostly support inventory going out (i.e. shipping and labeling). They’re not all technically warehouse management systems, as they’re typically used by small businesses who need to ship out inventory.
- Tier 2: These WMSes support all three phases of inventory, but with relatively straightforward functionality. This tier is generally best for more complex ecommerce and retail companies.
- Tier 3: WMSes in this tier support all three phases of inventory and provide high levels of customization. These solutions are usually used by large ecommerce companies or 3PLs.
Later, we’ll provide examples of warehouse management systems in each of these tiers.
Why is having a WMS important?
The inventory management process consists of a variety of working people, processes, and parcels. Warehouse management systems are crucial for ecommerce companies to optimize all of those pieces and more.
In the short and long term, having a WMS can serve as a major competitive advantage. Cleaner, faster fulfillment generally leads to heightened customer satisfaction, and thus a more loyal client base.
Over time, the right WMS will also allow you to scale your warehouse operations seamlessly, while saving on both time and costs. These savings come by way of improved efficiency, accuracy, and data, and from having greater ability to customize your WMS setup.
The right WMS will help you optimize actions from receiving orders to dispatching, which ultimately helps minimize order fulfillment time.
With centralized performance and productivity data from your management system, you’ll be able to manage and optimize labor and carriers. Your WMS will help you minimize errors and identify positive or problematic trends to make more informed staffing decisions.
More accuracy and consistency
With the right WMS, inventory in, inventory sitting, and inventory out data can always be kept up to date. You can also automate the inventory receiving process and minimize manual data entry.
All of this lends itself to more accurate processes, which in turn creates more consistency for your employees and customers.
Warehouse management systems offer real-time data on almost every facet of your warehouse operations.
Access to this data enables you to build more robust and insightful reporting quickly, plan more effectively, and overall make more informed business decisions.
How to find the best WMS
Finding the best warehouse management system for your company involves careful research and a clear understanding of what exactly you want and need from the tool.
Budget would be the most obvious consideration, but other than that, there is plenty to take into account when identifying the best WMS for your team:
Does the WMS do what you need it to do?
It might seem obvious, but just start simple: From inventory in to inventory out, consider whether the platform you’re considering covers your most immediate needs. You may simply need to manage your inventory going out or get visibility into inventory levels, which you could easily achieve with a lower-tier solution.
On the other hand, you may need more in-depth reporting on order aging, warehouse space, or even labor productivity, in which case, you’re likely in the market for a higher-tier warehouse management system.
Also, ask yourself if the solution you’re considering has the level of control and customization you need. For example, if you need to be able to quickly onboard new clients, is it easy to do yourself? Does the solution easily support all of the shipping methods you’re utilizing?
Finally, make sure you’re striking a balance between a solution that meets your needs and can grow with you to the extent you want versus overpaying for one that has a lot of bells and whistles that might not be beneficial until several years down the road.
Realistically, how easy will the WMS be to implement?
Consider your team’s bandwidth: is the onboarding process going to be doable? Does the WMS offer the level of support needed to set your team up for success?
Also consider whether the WMS is easy enough to use that your team will need minimal support once it’s up and running. You might find a WMS that has everything your team needs, but if it’s too hard to implement or learn how to use, it’s probably better to find another solution.
It's also imporant to determine how well it will work with your existing software stack. Determine whether integrations can be done by your team and generally how much support you’ll need to get all of your systems working together.
If you’re not sure, consider using a solution like Parabola to easily connect all of your data sources and access whatever data you need.
Once you think through these criteria, you can identify the actual solution within your level of need.
WMS Examples (Tier 1)
While ShipStation isn’t exactly a WMS, it offers solutions across order management, shipping, branding, and inventory management.
ShipStation allows you to integrate with your marketplaces and order management systems to make imports and labeling much more seamless.
Pricing ranges from $9.99 per month (for up to 50 shipments), up to $229 per month (for up to 7,500 shipments). They also offer quoted pricing for unlimited shipments.
With a more expensive plan, users gain access to more shipments, more users (ranging from 1 to 10), and more customization capabilities.
EasyPost has been around since 2012. They offer an API platform for shipping, tracking, and address verification.
With their developer package, you can start shipping for free (up to 120,000 shipments per year). EasyPost also offers custom Enterprise pricing for anyone looking for a business solution.
WMS Examples (Tier 2)
They offer both standard (Fishbowl Advanced) and cloud (Fishbowl Drive) platform options.
Upon visiting their pricing page, you’ll see just how flexible they are. Whether on-premises or cloud-based, plans for warehousing start at $329 per month. On-premises manufacturing pricing starts at $429 per month.
ShipHero was founded in 2013 just as a WMS. Since 2019, the company has also offered outsourced fulfillment.
WMS pricing for brands starts at $1,995 per month. They also offer quoted pricing for Enterprise brands. Both plans start with 5 users and similar functionality, but the Enterprise plan allows for more API customization and a sandbox account.
Pricing for 3PLs starts at $2,145 per month.
WMS Examples (Tier 3)
Manhattan Associates offer a robust, unified platform to help ecommerce companies manage omnichannel commerce, supply chain execution, and supply chain planning.
Their solutions cover order management, point of sale, warehouse management, labor, transportation, and carrier management, and more. They also offer a suite of data management tools, developer tools and APIs.
Manhattan Associates is an enterprise platform, so pricing is variable.
Logiwa is a cloud warehouse management system and order fulfillment platform for B2C, direct-to-consumer brands, and 3PLs. The company caters to high-volume ecommerce brands.
The platform integrates with around 200 ecommerce and shipping tools.
While Logiwa does not detail their pricing on site, they do highlight their different plan offerings. There are five in total, including DTC Launch, DTC Growth, Enterprise, Wholesale DTC Transition, and 3PL Acceleration. Each plan is tailored to fit different sized businesses.
Extensiv / 3PL Central
Extensiv, formerly 3PL Central, is an omnichannel fulfillment company geared towards connecting 3PLs with ecommerce companies.
Those that utilize the platform gain access to more than 1,500 3PLs and a range of integration plans that help brands or 3PLs tap into the extensive integration network.
With such a large pool of 3PLs, brands can expect to find the custom solution they need across inventory and order management. Their site offers an ability to build a “custom solution,” which includes a series of questions and specifications.
Automating your inventory management process
Once you’ve selected a fitting WMS, you can make sure you’re getting the most out of it by automating your inventory management processes.
Additional tooling like Parabola can help ecommerce teams break free of their supply chain labor routine. Parabola can help you connect your inventory tooling to your general business tools so you can automate specific workflows — like inventory consolidation, freight audit, and days-on-hand reports — and pull any needed data out of your WMS.
To see how you can automate your inventory management process with Parabola, set up a time to talk to our team.