Page 15 - Logistics News - June/July 2021

WAREH O US E FULFILMENT

Capturing the e-commerce gig economy

By Cyle Obermeyer, Chief Operating Officer at Parcel iT, cyle@parcelit.co.za

E-commerce fulfilment warehouses are finding their niche as a quick response for the gig economy market.

he gig economy, or the side hustle, is growing at warehouse can also be costly, and if the business sells a wide
a fast pace globally, with people demanding more variety of products, they need more space, requiring more
Tflexible hours and additional sources of income money. Here, 3PLs and fulfilment warehouses can play a
outside their full-time jobs. One of the most popular ways huge role in the burgeoning gig economy.
to earn extra cash is by selling products on e-commerce
marketplaces such as Takealot, or from their garages. While inventory is stored at both fulfilment centres
and warehouses, the difference is long-term versus short-
According to Hyperwallet’s 2017 study The State of term storage. A warehouse usually stores products long-
E-Commerce Marketplace Selling in 2017, more than nine in term – receiving and storing inventory but not doing the
10 marketplace sellers bring in up to 49 percent of their total picking, packing and shipping. A fulfilment centre stores
income selling on e-commerce sites. And, one in 10 sellers the inventory, but it is focused on getting the products into
are focused on making enough money through online selling the hands of customers – ideally, products move in and out
to quit their full-time job. of this centre quite quickly. Fulfilment warehouses offer
a hybrid approach, providing short-, medium- and long-
Experts in the field say that the global COVID-19 term storage, warehouse management, order fulfilment
pandemic accelerated the shift to digital shipping by roughly and arranging last-mile delivery of the product to the
five years. With the e-commerce sector booming, so too customer. The fulfilment warehouse is also able to deliver
is the number of small online businesses with garages product to a large e-commerce marketplaces, like Takelot.
and living rooms packed to the ceiling with inventory. Using a fulfillment warehouse gives smaller businesses
Warehousing is a critical component to the e-merchant’s the opportunity to scale their business operations without
business, but too often the focus for these start-up investing in overhead like warehouse space and employees.
businesses is on marketing their products and building a
customer base rather than planning for warehousing and While a warehouse tends to be inactive because it’s used
storage. These SMEs often grow to become too big for their mostly for storing inventory, an order fulfillment centre and
garage, but too small for a warehouse. In addition, while warehouse is a hive of activity, picking and packing boxes,
there has been a rapid increase in e-commerce business, preparing shipping labels, shipping orders and managing
the amount of warehousing space has not grown enough to returns. 4PLs go a step further by overseeing and organising
accommodate this increase, putting space at a premium. the entirety of a supply chain, not just the logistics, becoming
a true partner with the customer, working to create a
Meanwhile, thanks to the Amazon Prime Effect, online smooth, cost-effective supply chain. The 4PL provider is a
shoppers have come to expect same-day or two-day delivery, big umbrella, under which is transportation, warehouses
for almost nothing, putting e-commerce merchants under and sometimes even website construction and design
pressure to get faster. The traditional distribution centre and the facilitation of compliance with large e-commerce
network just isn’t agile enough to keep up with fast-paced marketplaces.
consumer demands. This is where fulfilment warehouses and
third- and fourth-party logistics (3PL and 4PL) providers The terms ‘warehouse’, ‘fulfillment centre’ and
come in. ‘fulfillment warehouse’ are often used interchangeably, but
using a simple warehouse space is very different from being L O GI S T I CS NEWS
What is a fulfilment warehouse? able to benefit from the range of services a fulfillment centre
For small businesses, warehouses can be overwhelming or warehouse offers. What works best for any individual
in terms of cost and management. Leasing space in a seller comes down to the type of service they need. •

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