SaaS WMS: How Retailers Can Streamline Their Warehouse Management

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With ecommerce continuing to grow, there has been rapid growth in the number of solutions and services available to address warehouse management needs and challenges.

Retailers now have plenty of smart warehousing solutions to choose from to simplify, accelerate, and improve logistics operations.

One of the best options for ecommerce businesses with their own warehouse is SaaS WMS, which is a cost-effective warehouse management solution that provides both control and visibility into operations.

In this article, we discuss what the double acronym SaaS WMS is and how you can use it to streamline your warehouse management.

What is SaaS WMS?

SaaS WMS refers to software-as-a-service warehouse management system.

This type of warehouse solution is a cloud-based software that allows merchants to track warehouse activity and inventory levels in real time — no matter how many warehouses or fulfillment centers are used.

SaaS WMS is a robust yet minimal investment solution that’s easy to implement.

How does a SaaS WMS work?

SaaS WMS is a type of warehouse management software that’s hosted in the cloud and maintained by a software company or third-party logistics provider. The vendor manages the servers, while giving retailers access through regular subscription fees.

You can securely access the WMS from any computer via an internet connection and use it to keep track of warehouse and inventory activity at any time.

With this type of WMS, retailers don’t have to worry about investing in expensive infrastructure or managing their own servers for greater flexibility and affordability.

3 benefits of implementing SaaS WMS in your supply chain

With flexibility and affordability on its side, there are a number of reasons why retailers choose to implement a SaaS WMS solution into their ecommerce supply chain. Here are the three most common benefits.

1. More scalable and flexible

Many ecommerce brands start out small and eventually expand to meet the needs of customers across the country or even globe.

For example, a SaaS WMS enables business owners to start with in-house fulfillment. If they outgrow their warehouse and don’t want to be stuck in additional leases, many will even partner with a third-party logistics (3PL) company to expand into multiple fulfillment centers (or use a hybrid fulfillment approach) and make it easier to sell across sales channels.

A SaaS WMS is the ideal solution for many online brands as it requires minimal infrastructure and investment to start.

Plus, it offers plenty of room for logistics expansion to support increased order volume, to improve order accuracy, and to maintain visibility across operations.

2. Pay-as-you-go

With traditional warehouse management systems, it’s not common to have to pay an upfront lump sum or onboarding payment.

Additionally, some vendors may require you to pay fees for customizations, upgrades, database management, and server licenses. As many retailers have invested a lot of money into their WMS, they may feel compelled to keep using the system even if they’re not 100% happy with it.

On the other hand, a SaaS WMS is more subscription-based where you pay a monthly or yearly fee to use the system and the associated services.

This means you don’t have to be tied down to the WMS even if you change your mind later on. Plus, the costs tend to be more affordable since you don’t have to invest in additional infrastructure to support the system.

3. Better security

Maintaining security in a traditional WMS can be expensive and complicated, typically requiring a server on sites and a database expert to conduct backups, resiliency checks, and database management on a regular basis.

Meanwhile, SaaS WMS providers deliver security, resilience, and backups at a far higher specification than most ecommerce retailers can do themselves. As a result, using a SaaS WMS may guarantee better security in the long run.

SaaS WMS vs. cloud-based WMS

SaaS WMS and cloud-based WMS are two different types of warehouse management solutions that are often mistaken for each other because of the many similarities they share.

They’re essentially both “cloud-based” because they’re hosted and deployed in the cloud. Plus, they may both use a SaaS payment model in which users pay a monthly or annual subscription fee to keep using the WMS.

However, there are a few key differences to note.

What is cloud-based WMS?

As the name suggests, a cloud-based WMS is a warehouse management system that’s hosted and deployed in the cloud. Users can manage their warehouse processes without having to set up and manage their own servers and other infrastructure.

While this may make cloud-based WMS similar to a SaaS WMS, the key difference is that it exists on a private hosted or segregated server. Meanwhile, a SaaS WMS exists on shared infrastructure.

Both SaaS WMS and cloud-based WMS are managed by the software vendor, who is also in charge of upgrades and maintenance.

Which one should you choose?

Both cloud-based and SaaS WMS are extremely similar, which makes it difficult to choose between the two. Here’s a breakdown of the key differences.

SaaS WMSCloud-based WMS
Exists on shared infrastructureExists on private hosted or segregated server
Used out-of-the-box; minimal customizabilityIncreased customizability 
Faster implementation timeRequires more time to implement
More affordable optionRequires more financial investment than SaaS
Ideal for startups and small businessesIdeal for mid-market and enterprise businesses

How to choose the right SaaS WMS solution for your business

Since there are multiple SaaS WMS solutions available, the process of narrowing down the best option can be hard. Here are some tips to help you choose the right SaaS WMS solution for your business.

Be mindful of your budget

While you may be considering the cheapest option in the market, that’s not necessarily the best choice.

Often, the cheapest solutions may also come with the most basic features and you’ll eventually have to keep adding more integrations and services to support your business needs, with the costs quickly building up.

It’s important that you keep your budget in mind but also look for something that’s most cost-effective in the long run, considering the features and services that come with it.

Make sure it has all the features you need

As briefly mentioned above, your SaaS WMS should have all the features you need to effectively manage your warehouse processes.

While the specifics may vary for each business, some of the key features to look for include:

Ensure they have the right support system

Warehouse management systems are often complex and challenging to manage.

One of the benefits of a SaaS WMS is control, but it still requires access to support from experts who can help you with database management, security and resiliency checks, and even initial deployment.

For instance, ShipBob offers a WMS solution for merchants that fulfill orders in-house (and can even take advantage of ShipBob’s global fulfillment network), providing software and ongoing support for their customers.

With volatility and everything happening in the industry, ShipBob powering our warehouse, while allowing me to tap into their entire fulfillment platform and relationships, was the best thing that could have happened.

When my business was brand new, we had used one of the large shipping software options, but they were pretty much only good for label printing. Having no prior warehouse management experience, the ShipBob solution has helped my team accelerate what would have been a very steep learning curve.

Courtney Lee, founder of Prymal

ShipBob can help you streamline your warehouse management

ShipBob helps you streamline your warehouse management with a standalone WMS called Merchant Plus, which offers brands the ability to to simplify in-house fulfillment

ShipBob’s WMS empowers you to scale your business through virtually endless software integrations and partnerships that let you build a highly customized solution to address all your needs, from omnichannel fulfillment to DDP shipping.

In addition, ShipBob provides access to leading carriers, a hands-on dedicated account manager and customer support team, plus a full suite of tools to run your entire ecommerce supply chain, including a global network of fulfillment center locations if you want to further reduce transit times and shipping costs.

When you outsource fulfillment to ShipBob, you gain better fulfillment solutions and support, all without having to invest in the individual components that make up warehouse management.

“I’m still shocked that we get to use ShipBob’s software that they use for their global network within our own facility. It’s like a cheat code.

Before ShipBob, we didn’t have everything centrally located. Now, from inventory to orders, we can track it all. Lot codes are extremely important for us, being in the food business, and other tools we used previously didn’t give us those capabilities.”

Tyler DeVos, Co-Founder of Muddy Bites

What is a SaaS WMS?

SaaS WMS is a cloud-based warehouse management system where the software provider is also in charge of maintaining the system, but provides full control and visibility for the merchant.

What does a WMS do?

A WMS monitors and controls daily operations in a warehouse. WMS software helps ensure inventory is received, stored, picked, packed, shipped, and replenished in the most efficient way possible. 

What are the benefits of WMS?

A WMS helps businesses to get visibility into their inventory, optimize their storage space, improve accuracy, and increase productivity.

What is the cost of a WMS?

It all depends. A more advanced WMS will be more expensive for the additional functionality it provides. One study found some businesses are spending around $167 per user for basic WMS functionality (does not include all associated costs).

Written By:

Kristina is the Director of Marketing Communications at ShipBob, where she writes various articles, case studies, and other resources to help ecommerce brands grow their business.

Read all posts written by Kristina Lopienski