Exploring Dynamic Storage in Ecommerce Logistics With ShipBob

Imagine this: you run an ecommerce clothing brand and the seasons are changing from winter to summer. Customers’ spending habits are evolving and you’re shifting from cozy, warm attire to vibrant, lightweight essentials. 

That means your warehouse inventory must also adapt. You want your best sellers to be closest to your pick and pack area so that time isn’t wasted walking around the warehouse. That way the fulfillment process is sped up and customers receive their orders faster.

That’s precisely the goal of dynamic storage. But what is it exactly? How does it differ from traditional storage systems? And should all businesses be using it? In this article, we’ll provide a comprehensive understanding of dynamic storage and its role in optimizing ecommerce logistics.

What is dynamic storage?

Dynamic storage refers to an advanced inventory management system that optimizes the storage and retrieval of goods within a warehouse or distribution center. Unlike traditional storage methods, dynamic storage adapts to changes in inventory levels and demand patterns, ensuring the best possible use of space and resources.

To achieve this, the use of specialized equipment and technology is essential. Things like conveyors, multiple types of racking (carton flow, pallet flow, and selective racks), and automated shipping tech are integrated to optimize the movement of products.

For a company whose products change in demand throughout the year, a dynamic storage solution is vital. By relocating high-demand products to more accessible locations in the warehouse businesses can remain efficient and cut costs.

Dynamic vs. static storage systems

Storage systems come in two main varieties: dynamic and static. Is one better than the other? Well, that depends on the type of products you’re storing and selling.

Let’s dive deeper into the differences between each.

Static storage

Static storage systems assign specific, fixed locations for each inventory item. Goods are stored in designated spots until picked, which can lead to underutilized space and inefficient handling processes, especially as inventory levels and demands change. 

These systems are straightforward and may be suitable for businesses with predictable, consistent inventory needs but can struggle to scale or adapt to fluctuating demand.

Image credit: Lockheer

Dynamic storage

Dynamic storage systems, on the other hand, actively manage the placement and retrieval of goods based on current demand, order prioritization, and space optimization. This approach enables a more flexible and efficient use of warehouse space and resources, reducing waste and improving operational throughput. Dynamic storage systems are particularly beneficial for businesses with varying inventory sizes, seasonal demand fluctuations, or a broad product range.

Image credit: Seema Slotted Angles

Benefits of dynamic storage for ecommerce businesses

Optimizing inventory storage management is no easy task. That’s why leveraging the benefits of dynamic storage is crucial for ecommerce businesses aiming to streamline their warehouse operations. Dynamic storage systems offer several advantages that can transform how online retailers manage and fulfill orders:

• Space utilization: Dynamic storage maximizes warehouse space, allowing businesses to increase their storage capacity in less square footage. This optimization is crucial for businesses that need to manage a diverse range of products without expanding their physical footprint.
• Improved inventory management: In combination with the proper technology, businesses can get a better handle on their inventory. Knowing exactly what comes in and goes out leads to more accurate stock levels, helping prevent both overstock and stockouts.
• Increased order fulfillment speed: By prioritizing the storage of high-demand items in more accessible locations, dynamic storage systems enable faster picking and packing processes. This efficiency shortens the time from order placement to shipment, resulting in quicker delivery times.
• Adaptability to market changes: Dynamic storage allows businesses to adapt quickly to market changes, ensuring that inventory management and order fulfillment processes remain efficient regardless of market fluctuations.
• Cost reduction: While the initial setup costs for dynamic storage can be high, the long-term savings in terms of reduced labor, decreased warehouse space needs, and minimized inventory waste can be substantial. These systems optimize resource use, translating into lower operational costs and higher profit margins.

The combination of these benefits leads to a better overall customer experience. Accurate, fast, and reliable fulfillment is a key driver of customer satisfaction—crucial for long-term ecommerce success.

How to choose between dynamic and static storage systems

By now you’re aware of the differences between dynamic and static storage systems. But which one is best for your business? The choice should align with your business model, inventory management needs, and growth ambitions.

Why do you store inventory?

Understanding the primary function of your warehouse is the first step in determining the right storage system. Consider the following two questions to gauge your needs:

1. Is your warehouse primarily a fulfillment center? If rapid picking, packing, and shipping are essential to meet customer expectations, dynamic storage could greatly enhance your operations. Dynamic systems are designed to streamline order fulfillment processes, making them ideal for businesses prioritizing fast, accurate deliveries.
2. Does your warehouse serve as overflow storage? If the warehouse is used to store excess inventory or rarely sold items, a static storage system might suffice. Static storage is typically more cost-effective for long-term storage of goods that do not require frequent access.

Consider a hybrid storage approach (dynamic & static)

For many businesses, a hybrid storage solution—combining elements of both dynamic and static systems—may offer the best of both worlds. This approach allows for the flexibility to adapt to changing inventory needs and business growth while maintaining cost efficiency. 

Consider the following when evaluating a hybrid system:

• Inventory variety and volume: A hybrid system can be beneficial for businesses with a wide range of products, including fast-moving items that require quick access and slow movers better suited to static storage. This setup ensures efficient use of space and resources.
• Seasonal fluctuations: If your business experiences significant seasonal variations in inventory levels, a hybrid system can provide the necessary flexibility. Dynamic storage can accommodate the increased demand during peak seasons, while static areas can store excess inventory during off-peak times.
• Growth and scalability: As your business grows, so do your storage needs. A hybrid system offers scalability, allowing you to adjust the ratio of dynamic to static storage based on current business requirements and future projections.

Implementing a Hybrid Approach

If you’ve decided that a hybrid storage system is the right move for your business, then the following three steps can help you implement this strategy:

1. Analyze your inventory: Identify fast-moving items that would benefit from dynamic storage and slow-moving items suitable for static storage.
2. Evaluate space and technology requirements: Consider the available space and the investment needed for implementing a hybrid system. Dynamic storage might require more advanced technology and infrastructure, which should be factored into the decision.
3. Consult with experts: Engaging with warehouse design professionals or third-party logistics providers, like ShipBob, can provide valuable insights into the most effective storage solutions for your specific needs.

Whether you lean towards a dynamic system, prefer static storage, or opt for a hybrid approach, the key is to align your choice with your business’s operational goals and growth plans.

Dynamic or static, ShipBob optimizes your storage systems

Flexibility and efficiency are the name of the game when it comes to ecommerce logistics, and ShipBob stands at the forefront of providing solutions that cater to both dynamic and static storage needs. Utilizing state-of-the-art technology and an extensive network of fulfillment centers, ShipBob empowers businesses to optimize their logistics, enhance customer satisfaction, and drive growth.

Manage inventory across multiple fulfillment centers

ShipBob’s network of fulfillment centers and inventory management software allows for strategic inventory distribution, ensuring products are closer to your customers. This not only reduces shipping costs but also speeds up delivery times. By spreading inventory across multiple locations and having a solid warehouse putaway strategy, businesses can benefit from dynamic storage where it’s needed most.

Integrate with various ecommerce fulfillment platforms

Understanding the importance of seamless integration, ShipBob offers a robust ecommerce tech stack that’s compatible with a wide range of partners. Whether you’re using Shopify, Magento, BigCommerce, or others, ShipBob’s system effortlessly syncs with your storefront. 

This integration streamlines the order fulfillment process, ensuring that orders are automatically received, processed, and shipped, minimizing manual intervention and the potential for error.

Pair inventory dashboards with an industry-leading WMS

ShipBob’s powerful dashboard and warehouse management system (WMS) provide unparalleled visibility and control over your inventory. This pairing allows for real-time tracking of stock levels, order status, and inventory forecasting insights, enabling proactive inventory management. 

With ShipBob’s WMS, businesses can easily manage dynamic storage needs, adjust to changes in demand, and optimize their overall supply chain.

Get started with ShipBob’s WMS by connecting with our expert team here.

Unlock customized packaging & kitting

Beyond standard storage and fulfillment, ShipBob offers customized kitting and assembly services, enabling businesses to create unique unboxing experiences and efficiently manage bundled products. This flexibility is essential for companies looking to stand out in the crowded ecommerce space and for those requiring dynamic solutions to packaging and assembly needs. 

Don’t just take our word for it: customer success with ShipBob

Through helping thousands of ecommerce brands improve their fulfillment processes, ShipBob has proven itself as a reliable partner. Take the scratch-off memory book company, The Adventure Challenge, for example. With ShipBob’s help, they were successfully able to manage both DTC and B2B orders and achieve an impressive $80 million in revenue in 2021 alone. 

It’s going really well! ShipBob’s B2B Fulfillment Suite powers retail dropshipping and retail distribution for other retailers that we’re hoping to partner with in the future, including Target and Walmart, so we’re excited to keep expanding our retail partnerships with ShipBob.  

– Aaron Patterson, COO of The Adventure Challenge

Get started with ShipBob

Choosing the right logistics partner that is equipped with the proper infrastructure (whether that be storage systems, technology, or a skilled team) is crucial for ensuring your ecommerce business remains competitive.

Dynamic storage FAQs

Here are answers to commonly asked questions about dynamic storage.