Table of Contents
** Minutes
Benefits of a cloud-based warehouse management system
How to implement a cloud WMS quickly and effectively
How ShipBob’s cloud WMS powers modern fulfilment
Efficient warehouse management is essential for ecommerce success, but traditional on-premise WMS solutions often struggle to keep up with modern ecommerce fulfilment demands. That’s where cloud-based WMS comes in. Cloud-based systems offer greater flexibility, scalability, and real-time visibility without the high costs of maintaining in-house infrastructure.
With seamless integrations, automated updates, and remote access, a cloud WMS empowers brands to optimise inventory, streamline fulfilment, and scale effortlessly.
In this guide, we’ll break down how cloud WMS compares to on-premise systems, the key benefits for ecommerce brands, and strategies for implementation, helping you make the right choice for your growing business.
What is a cloud WMS?
A cloud-based warehouse management system (WMS) is a software solution that enables businesses to manage their warehouse operations and inventory using the internet and remote servers.
Unlike traditional on-premise WMS systems, which are installed and run on a company’s own computers and servers, a cloud WMS is hosted by a third-party provider and accessed through a web browser.
This fundamental difference in architecture offers several advantages for ecommerce businesses. By leveraging the power of the cloud, these systems provide real-time visibility into inventory levels, order statuses, and operational metrics from any device with an internet connection. This means that warehouse managers can monitor and control their operations from anywhere, at any time, without being tied to a specific location or computer.
Cloud WMS solutions are well-suited to the fast-paced, ever-changing world of ecommerce. With the ability to quickly scale up or down based on demand, these systems can accommodate the rapid growth and seasonal fluctuations that are common in online retail. Additionally, the cloud-based model eliminates the need for businesses to invest in expensive hardware and IT infrastructure, reducing upfront costs and ongoing maintenance expenses.
By providing a centralised platform for managing all aspects of warehouse operations, from receiving and putaway to picking, packing, and shipping, cloud WMS systems have become an essential tool for companies looking to streamline their fulfilment processes and stay competitive in the digital marketplace.
Cloud WMS vs. on-premise WMS
When it comes to choosing a warehouse management system, one of the key decisions businesses face is whether to opt for a cloud-based solution or a traditional on-premise installation. While both approaches have their merits, there are several important differences to consider:
| Feature | Cloud WMS | On-Premise WMS |
|---|---|---|
| Initial investment | Lower upfront costs (OpEx model) | Higher upfront costs (CapEx model) |
| Implementation timeline | Faster (weeks) | Slower (months) |
| Maintenance | Managed by vendor | Managed by in-house IT |
| Hardware requirements | Minimal (internet connection) | Extensive (servers, infrastructure) |
| Upgrade process | Automatic and frequent | Manual and infrequent |
| Security and disaster recovery | Robust protocols managed by vendor | Dependent on in-house capabilities |
One of the main advantages of cloud WMS solutions is that they eliminate many of the pain points associated with on-premise systems. Cloud WMS solutions are hosted and managed by the vendor, so businesses don’t have to maintain their own hardware. If there’s an issue with the system, it’s the vendor’s responsibility to fix it quickly. Additionally, cloud solutions are automatically updated on a regular basis, so businesses always have access to the latest features and functionality without having to go through a lengthy and expensive upgrade process.
With traditional software installations, businesses are responsible for managing their own servers and infrastructure, which can be costly and time-consuming. In the event of a server crash or other technical issue, it can take hours or even days to get the system back up and running, leading to significant disruptions in warehouse operations.
Benefits of a cloud-based warehouse management system
Cloud-based warehouse management systems offer a wide range of benefits that directly impact the efficiency, cost-effectiveness, and growth potential of ecommerce businesses.
Real-time inventory visibility across all locations
One of the most significant benefits of a cloud WMS is the ability to access real-time inventory data across multiple warehouses. This helps reduce the risk of stockouts and overstocking, as managers can quickly identify and address potential issues. Real-time data also supports more accurate forecasting and purchasing decisions, ensuring that the right products are available when and where they’re needed.
By maintaining accurate inventory levels, businesses can improve order accuracy and customer satisfaction. Customers are more likely to receive the products they ordered, without the frustration of backorders or unexpected substitutions. Additionally, cloud WMS solutions often provide mobile access, allowing warehouse managers to monitor operations remotely and make timely decisions, even when they’re not physically present in the facility.
Seamless integrations with ecommerce platforms
The best cloud WMS solutions offer seamless integrations with major ecommerce platforms like Shopify, Amazon, and WooCommerce. These integrations create a unified technology ecosystem that eliminates data silos and streamlines operations. For example, when an order is placed on a connected ecommerce platform, the order information automatically flows into the WMS without the need for manual data entry. This reduces the risk of errors and saves valuable time.
Many cloud WMS providers also offer API capabilities, enabling custom integrations with any existing systems a business may use. This flexibility ensures that the WMS can work in harmony with a company’s unique tech stack.
Reduced total cost of ownership
Cloud WMS solutions offer significant financial advantages, such as eliminating the need for server hardware purchases and maintenance, and requiring less in-house IT staff, as the vendor handles most technical responsibilities.
Subscription-based pricing models, common among cloud WMS providers, allow businesses to spread costs over time, making it easier to budget and manage cash flow. Automatic software updates are typically included in the subscription, preventing the need for costly version migrations. Cloud WMS solutions also tend to have more intuitive user interfaces, which can reduce training costs and accelerate adoption.
Scalability for seasonal demands and business growth
Cloud WMS tools are designed to accommodate fluctuations in order volumes, particularly during peak seasons like the holidays, seamlessly. As demand increases, businesses can easily add users to the system without incurring significant additional costs and maintain optimal warehouse performance, even during the busiest times of the year.
Cloud WMS solutions also simplify the process of adding new product lines and SKUs. As a business expands its offerings, the WMS can quickly incorporate new items into the existing workflow. Similarly, when a company decides to add new warehouse locations, the cloud-based system can easily extend to cover the additional facilities. This flexibility is crucial for businesses looking to grow and adapt to changing market conditions.
Accelerated global expansion capabilities
As brands expand into international markets, a cloud WMS is a game-changer, as these systems can connect with global fulfilment centres.
A centralised cloud WMS also simplifies the process of managing inventory across multiple countries. With real-time visibility into global stock levels, businesses can make informed decisions about inventory allocation, ensuring that the right products are available in the right locations to meet customer demand. This level of control and flexibility is essential for businesses looking to succeed in the competitive global ecommerce landscape.
Advanced analytics for data-driven decisions
Modern cloud WMS solutions offer advanced analytics and reporting capabilities that empower businesses to make data-driven decisions. These insights can improve warehouse optimisation, including inventory turnover rates, picking efficiency, labour management and allocation, and order processing times. By leveraging this data, managers can identify areas for improvement and implement targeted strategies to boost performance.
Predictive analytics, a feature of many cloud WMS solutions, can help forecast demand patterns and prevent stockouts. By analising historical data and current trends, the system can provide recommendations for optimal inventory levels, ensuring that the warehouse is always prepared to meet customer demand. These data-driven insights not only improve operational and warehouse efficiency but also directly impact customer satisfaction and retention.
How to implement a cloud WMS quickly and effectively
Implementing a cloud-based warehouse management system is a significant undertaking that requires careful planning and execution. From proper warehouse set up to training, here are the key steps to implement a cloud WMS quickly and effectively.
Create a comprehensive data migration strategy
Before diving into the implementation process, it’s crucial to develop a thorough plan for migrating your existing data into the new cloud WMS. Start by auditing your current inventory data for accuracy and completeness. Clean and standardize the data to ensure consistency and prevent any “garbage in, garbage out” scenarios.
Prioritize which historical data needs to be migrated and which can be archived. Consider running the old and new systems in parallel for a period to verify data integrity. Finally, create a checklist to confirm successful data transfer and resolve any discrepancies before fully transitioning from your legacy system to the cloud WMS.
Develop effective staff training programs
Your warehouse staff will be the primary users of the new cloud WMS, so it’s essential to provide them with comprehensive training. Develop training modules for pickers, packers, and managers to ensure everyone understands how the system impacts their daily responsibilities.
Measure training effectiveness through assessments and hands-on exercises to identify any knowledge gaps and provide additional support as needed.
Set up barcode and RFID integration
Barcode and RFID scanning technologies are critical components of a modern cloud WMS. These tools dramatically reduce manual errors and increase throughput by automating data capture processes. To set up scanning integration, start by evaluating your hardware requirements and compatibility with the cloud WMS.
Next, create efficient scanning workflows for receiving, putaway, picking, and shipping processes. The setup process may vary depending on the scanning method, so work closely with your WMS provider to ensure proper configuration. Test the scanning integration thoroughly to verify accuracy and make any necessary adjustments before go-live.
Establish connections with your sales channels
One of the significant advantages of a cloud WMS is its ability to integrate seamlessly with your ecommerce platforms and sales channels. To establish these connections, start by configuring the integration settings within your WMS and your ecommerce platform.
Test the integration to ensure that orders flow correctly between the systems and that inventory levels update in real-time. Pay special attention to handling unique order types, such as pre-orders, subscriptions, and bundles. Develop strategies for managing inventory across multiple sales channels to prevent overselling and stockouts. If any issues arise during the integration process, work with your WMS provider to troubleshoot and resolve them promptly.
Implement security protocols and contingency plans
Data security is a top concern when moving to a cloud-based system. To protect your business and customer information, implement robust security protocols within your cloud WMS. Start by setting up user permissions and role-based access controls to ensure that employees only have access to the data they need.
Verify that your WMS provider follows industry-standard encryption practices and backup procedures. Develop contingency plans for internet outages, including offline functionality and data synchronization processes. Establish mobile access security protocols to protect data when accessed from remote devices.
While the idea of cloud security may seem daunting, reputable cloud WMS providers often exceed the security capabilities of in-house systems. By partnering with a trusted provider and following best practices, you can ensure the safety and integrity of your data.
How ShipBob’s cloud WMS powers modern fulfilment
ShipBob’s cloud-based warehouse management system is designed to meet the unique needs of ecommerce businesses. Our platform offers flexible options for brands looking to streamline their fulfilment operations, whether you choose to use ShipBob’s WMS in your own warehouse, leverage our complete fulfilment network, or create a hybrid approach that combines both.
Unlock scalability without complexity
With ShipBob’s cloud WMS, ecommerce brands can achieve rapid growth without the burden of building and managing their own complex fulfilment infrastructure. Our system allows you to maintain control over your operations while tapping into the power of our advanced technology and expertise. As your business expands, ShipBob’s WMS seamlessly scales alongside you, ensuring that you can meet increasing demand without missing a beat.
“Choosing ShipBob WMS to power our warehouse was the best decision I’ve ever made as a business owner. We have so many SKUs already, and we’re adding hundreds, maybe even thousands of SKUs every month, on top of growing order volumes. If we had kept using our old, patchworked approach to warehouse management and fulfilment, we would have been in a lot of trouble – we wouldn’t have been able to manage inventory or keep up with demand, let alone scale. ShipBob’s WMS allows us to do all of that. It’s been such a great solution for us.”
– Tim Poyer, VP of Operations and Logistics at Elwood Clothing
Optimise your inventory management
Effective inventory management is crucial for ecommerce success, and ShipBob’s cloud WMS makes it easier than ever to stay on top of your stock levels. Our inventory management software leverages real-time tracking and automated reorder alerts to prevent stockouts and overstocking. With ShipBob, you can maintain optimal inventory levels across all your sales channels, ensuring that you always have the right products in the right place at the right time.
Improve order accuracy for a better customer experience
ShipBob’s industry-leading picking logic is designed to minimise mis-picks and errors, enabling faster and more accurate order fulfilment. By ensuring that your customers receive the correct items every time, you can improve satisfaction, reduce cart abandonment, and increase repeat purchases. Our cloud WMS empowers your team to deliver the exceptional experience your customers expect and deserve.
“For us, one of the greatest benefits in using ShipBob’s WMS has been reducing mispicks. Before we implemented ShipBob’s WMS, our order accuracy rate was around 92%. Now we’re at 99.7% for order accuracy, which equates to 2,100 less mispicks a year on average. Our order picking and routing has also greatly improved with ShipBob.”
– Jourdan Davis, Operations Manager at Pit Viper
Fulfil from anywhere with multi-warehouse coordination
With ShipBob’s network of 60+ fulfilment centres, ecommerce businesses can strategically distribute inventory across multiple locations to reduce shipping costs and transit times. Our cloud WMS makes it easy to manage inventory and orders across all your facilities, enabling you to offer faster, more affordable shipping to your customers. Whether you’re targeting domestic or international markets, ShipBob’s multi-warehouse capabilities help you optimise your fulfilment strategy for success.
Integrate with your favorite platforms
ShipBob’s cloud WMS seamlessly integrates with all the tools and platforms you rely on to run your ecommerce business. From Shopify and WooCommerce to BigCommerce, Amazon, and over 40 other ecommerce platforms, ShipBob ensures that your fulfilment operations work in harmony with your existing tech stack. Our open API also enables custom integrations, giving you the flexibility to connect ShipBob with any system or solution you need.
Start shipping with ShipBob WMS
Implement ShipBob WMS in your own warehouse to boost efficiency and scale your operations seamlessly.
Cloud WMS FAQs
Here are answers to frequently asked questions about cloud WMS systems.
What security measures protect data in a cloud WMS?
Data security is a top priority for any cloud-based system, and ShipBob’s WMS employs a range of measures to protect your sensitive information. All data is encrypted in transit and at rest using industry-standard protocols, ensuring that your information remains confidential and secure.
ShipBob also implements strict user authentication and permission controls, allowing you to manage access to your data based on individual roles and responsibilities. Our cloud WMS is fully compliant with major security and privacy regulations, including SOC 2 and ISO 27001.
How does ShipBob’s cloud WMS differ from other solutions?
ShipBob’s cloud WMS stands out from other solutions thanks to its unique combination of advanced technology and a global fulfilment network.
Our WMS is built specifically for the needs of ecommerce businesses, with features and capabilities designed to streamline online order fulfilment.
ShipBob’s extensive integration ecosystem ensures seamless connectivity with all the popular ecommerce platforms, making it easy to manage your operations from a single, centralised system.
What costs should I expect when implementing a cloud WMS?
The cost of implementing a cloud WMS can vary depending on the specific needs of your business and the pricing model of your chosen provider. ShipBob offers transparent, competitive pricing that allows you to select the features and services that best fit your budget and requirements.
Some common pricing models for cloud WMS solutions include per-user licenses, per-order fees, and tiered subscriptions based on volume or feature access. Implementation and onboarding fees may also apply, along with additional costs for integrations or custom development work.
What is the difference between a cloud WMS and an on-premise WMS?
Cloud-based warehouse management systems are hosted on remote servers and accessed via the internet, while on-premise solutions are installed and run on a company’s own servers. This fundamental difference in deployment leads to significant variations in cost structure, maintenance requirements, and scalability.
With cloud WMS, businesses shift from a capital expenditure (CapEx) model to an operational expenditure (OpEx) approach. Instead of significant upfront costs for hardware and licenses, cloud solutions typically charge a monthly subscription fee, spreading costs over time. Implementation timelines are also shorter, as there’s no need to procure and set up on-site infrastructure.
How do barcode and RFID integrations work in a cloud WMS?
Integrating barcode and RFID scanning with a cloud WMS involves connecting compatible hardware devices to the system via Wi-Fi or cellular network.
Most modern cloud WMS solutions support a wide range of scanning devices, including dedicated handheld scanners, smartphones, and tablets.
The setup process typically involves configuring the devices to communicate with the WMS, either through a native mobile app or web-based interface. Once connected, warehouse staff can scan barcodes or RFID tags to perform various tasks, such as receiving inventory, picking orders, or updating stock locations.
Can a cloud WMS handle omnichannel fulfilment effectively?
Yes, a well-designed cloud WMS can effectively manage omnichannel fulfilment by providing real-time inventory visibility and synchronization across all sales channels. When an order is placed, whether it’s through an online store, marketplace, or brick-and-mortar POS system, the cloud WMS updates inventory levels across the entire network to prevent overselling.
Advanced order routing logic can automatically allocate orders to the optimal fulfilment location based on factors like inventory availability, shipping destination, and channel-specific requirements. This ensures that orders are fulfilled from the most efficient location, reducing costs and transit times.
