SaaS WMS: How Can Retailers 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 warehouse management solutions to choose from, with SaaS warehouse management system (WMS) being one of the most common smart warehousing solutions on the market.

In this article, we discuss what 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.”

It’s a cloud-based warehouse management system where the software provider is also in charge of maintaining the system. As such, it’s easier to deploy and manage even with minimal investment and infrastructure. 

How does a SaaS WMS work?

SaaS WMS is a type of warehouse management software that’s hosted in the cloud.

The provider is in charge of maintaining the software and managing the servers while retailers can get access to it by paying regular subscription fees.

You can securely access the WMS from any computer via an internet connection and use it to coordinate your warehouse processes.

With this type of WMS, retailers don’t have to worry about investing in expensive infrastructure or managing their own servers. This gives them flexibility and affordability, which are essential for growing businesses.

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 might choose to implement a SaaS WMS solution into their ecommerce supply chain

1. More scalable and flexible

Many ecommerce brands start out small and eventually explode, growing their sales exponentially once they start to pick up steam. As such, they also need a warehouse management system that can support this type of growth while still being affordable and sustainable enough for smaller operations.

A SaaS WMS is the perfect solution as it requires minimal infrastructure and investment to start. Meanwhile, it can effectively scale to support increased order volumes of a growing business.

2. Pay-as-you-go

With traditional warehouse management systems, you’d have to make an upfront lump sum payment.

Additionally, you’d have to pay additional fees for customizations, upgrades, database management, and server licenses. As they’ve invested so much money in their WMS, many retailers 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 can 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 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 that may make one better than the other for your business or vice versa. 

Cloud-based WMS

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

While this may make it very 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.

However, a cloud-based WMS is highly customizable while a SaaS WMS is typically less customizable and is used out of the box. 

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 quick look at a comparison between the two to make this process easier.

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 growing businessesIdeal for complex and established brands

How to choose the right SaaS WMS solution for your business

Since there are already so many SaaS WMS solutions in the market, the process of narrowing down the best option can be complicated. Follow the steps below to make the selection process more streamlined.

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 are

  • Real-time inventory data
  • Multi-warehouse support
  • Omnichannel sales management
  • Warehouse tracking
  • Optimized picking path
  • Scan to pack
  • Shipment tracking
  • Reorder point notifications
  • Automated purchase orders
  • Demand forecasting
  • Warehouse and inventory analytics

Ensure they have the right support system

Warehouse management systems are often complex and challenging to manage. As such, you’ll often need support from experts who can help you with database management, security and resiliency checks, and even initial deployment.

Make sure you look for an SaaS WMS solution that comes with a strong support system that’s available to see you through even as you scale your operations.

ShipBob can help you streamline your warehouse management

ShipBob helps you streamline your warehouse management with cloud-based software that seamlessly integrates with your sales channels and existing tools.

The ShipBob software 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.

Using ShipBob’s partnership with leading national and regional carriers, you can enjoy discounted shipping rates and automatically generate shipping labels to simplify order shipping.

When you outsource your fulfillment and warehousing to ShipBob, you can enjoy better fulfillment services and support, all without having to invest in the individual pieces that are a part of warehouse management.

Moreover, brands that are managing their own warehouse can also leverage ShipBob’s Merchant Plus solution. This full-stack fulfillment and warehouse management solution enables you to simplify in-house warehouse management without having to invest in multiple tools and software. 

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. 

What does a WMS do?

A WMS provides businesses with visibility into their warehouse processes and lets them manage multiple aspects of their warehousing operations.

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?

On average, businesses are spending around $167 per user for their WMS.

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