While researching how to improve your eCommerce business and increase profit, you might have frequently encountered the term slotting.
Or you might have heard the word slotting and are probably wondering why your fellow eCommerce business humans are doing the same. So you searched for â€œslotting meaningâ€ and landed here.
Let's break the ice now. The slotting we are talking about today is warehouse slotting and not the slotting price that retail shops levy.
For eCommerce businesses that cater directly to the customer without any middle agent, the warehouse is where all goods to be dispatched are stored. Warehouse slotting is simply the reasonable arrangement of the warehouse inventory so you can fully optimize your fulfillment operations.
Methods of Warehouse Slotting
Different businesses use different slotting techniques to bring orders into their warehouse and optimize the efficiency of their fulfillment services. Some of the most common methods include:
- Slotting by the sales volume of products
- Slotting by the products commonly used together
- Slotting by the way items are sold (as single pieces or in large quantities)
- Slotting by the seasonal demand for the products
Why does slotting matters for eCommerce businesses
For eCommerce businesses, when a customer orders something from their website, the orders are packed and shipped out from the warehouse itself. Imagine that your warehouse isn't optimized to its total capacity, and you don't have a clear-cut idea of where each item is placed. Of course, you still may be able to send the correct item to the right customer if you have a few items under your kitty, but if the variety is more, then the chances are high that the customer might receive the wrong item.
So what does this mean?
You will have to collect the wrong item from the customer, bring it back to your facility, and send them a new one. Further, if the item they returned isn't of the best quality, it can't go back into stock. So the loss you incur is high.
When warehouse slotting is done, you will be able to minimize such errors and improve the efficiency of your fulfillment operations. Further, the correct goods reach the customer faster than expected, thus improving customer satisfaction.
3 Advantages of slotting for eCommerce businesses
1. Saves space
If you are a small eCommerce business and don't own a warehouse of your own, you might probably be renting it out from a third party, and therefore, you pay rent for the space you occupy. With warehouse slotting, you can easily optimize the space and keep things organized.
So the more organized the space is, the more items you can easily fit into the given space and still don't get the goods mixed up.
2. Avoids damaging your goods
If your warehouse isn't organized, you might indeed be in the dark about where you store the fragile items unless it is labeled thoroughly. Thus, while rampaging through the required goods, you might damage some fragile goods. Therefore it increases the fulfillment costs.
With warehouse slotting, you will have a clear idea of what is located at which location, so your workers can take extra care while handling those products.
3. Improves brand reputation
There is an indirect but significant benefit of warehouse slotting. How? You may ask.
The path is simple and clear. When the customers get their products on time, and it is the product they have asked for, their trust in the brand increases. Therefore, they become your regular customers owing to your quality service. Now think about the opposite situation where customers must wait months to receive their orders. Will they order again? Or worse, will they give a positive review or rating for your products and brand? NO!