Future of Fulfillment 5

Strategies for resilient and profitable supply
chains in 2023 and beyond

The Current State of Fulfillment
Overwhelmingly, small to mid-sized businesses (SMBs) are managing order fulfillment
in-house. In fact, a full 89% of SMB decision-makers report that they operate out of at
least one owned warehouse.
However, many decision-makers see the limitations of in-house fulfillment, with 45%
of respondents indicating that they would like to divert their team’s time away from
logistics management and back towards core competencies.
And it’s no wonder, as a changing supply chain landscape makes logistics management
increasingly complex.
Respondents noted the past year presented the

following challenges to in-house logistics:
Rising costs in a tightening market

79% of respondents reported increased warehousing costs
A changing labor market

36% report labor management became more time consuming
Rising awareness of environmental impact

30% are concerned about the sustainability of their current
fulfillment model
With those challenges in mind, SMBs indicate

three needs in logistics management:
38% 31% 36%

An end- Ability to Comprehensive
to-end scale and logistics
solution automate technology
Changing the traditional 3PL model to make 1-2-day delivery easy and affordable for all merchants. Ware2Go offers a
nationwide network of certified warehouses and technology to streamline fulfillment across sales channels for a fully
scalable and truly on-demand solution. Learn more at Ware2Go.co
THE CURRENT STATE OF FULFILLMENT
The limitations of traditional outsourced fulfillment
35%
of SMB decision-makers feel that outsourcing fulfillment would allow them to
focus on their core business functions.
However, the traditional outsourced fulfillment options often fall short of SMBs’
expectations.
Traditional models often require long-term commitments to an

average daily volume (ADV) of orders, limiting SMBs’ ability to scale.
Legacy Warehouse Management Systems (WMS) do not provide

the connectivity SMBs need to simplify day-to-day operations.
Regional 3PLs offer limited delivery coverage. The solution is often

to stitch together multiple providers for nationwide coverage, but
managing multiple partnerships is time-consuming and inefficient.
The Future of Fulfillment
What must the future of fulfillment and logistics look like in order for SMBs to thrive?
Survey respondents indicated a desire for three distinct solutions:
Shared warehousing Strategic Tech

(or co-warehousing) partnerships investment
Solution 1: Co-warehousing is the future
74%
of respondents agree that the future of fulfillment
is shared, co-warehousing models.
A co-warehousing model allows merchants to share resources from space to labor to

advanced robotics and automation.
This model reduces cost, enables scalability, and gives SMBs access to technology
that was previously reserved for enterprise.
Over the past 1-2 years, many SMBs began to explore non-traditional models.
have looked to more have made the move

flexible strategies to co-warehousing
And the trend shows signs of continued growth, with 65% planning to make long-term
and short-term investments in leased warehousing space in the next 1-2 years
THE FUTURE OF FULFILLMENT
A full 67% of respondents agree that we will see a

shift away from large, single merchant warehouses to
smaller, distributed co-warehousing models.
The Benefits of co-warehousing

Respondents agreed on 6 key benefits to a shared warehousing model:
More time to focus Access to

Cost savings (60%) on other areas of better inventory
their business (41%) technology (40%)
Access to better
Optimized inventory
Scalability (38%) fulfillment automation
distribution (39%)*
capabilities (33%)
*Inventory distribution (or multinode fulfillment) lowers time in transit (TNT) on final mile deliveries, in
turn, reducing carbon emissions – a top concern for many SMBs (66% of respondents agree current
ecommerce shipping models are not environmentally sustainable.)
Solution 2: Partnering with Retail Brands
Thus, 90% of SMBs are open to such partnerships
90% of SMBs are open to a shared warehousing agreement with a retail brand under
certain circumstances.
22%
More cost effective than other options
21%
Clear contract
17%
Retailer is not a direct competitor
17%
Different capabilities from 3PLs or other providers
15%
A neutral third party involved to ensure orders are prioritized
However, respondents expressed the following concerns:
The retailer prioritizing Lack of flexibility and Lack of transparency

their products/needs ability to pivot when in inventory and
over mine during busy supply chain customer data - 37%
peak periods of activity issues arise - 38%
- 47%
Sharing customer data Having to integrate a

with the retailer - 35% new technology into
my existing logistics
tech stack - 34%
Solution 3: Tech investment
SMBs report an increasing need for enhanced technical capabilities in logistics

management, with 36% of SMB decision makers reporting that their time spent
on warehousing and fulfillment could be alleviated by improved technology.
SMBs are looking for technology that enables:
44%
Real-time inventory visibility
36%
Inventory re-allocation between warehouses and sales channels
35%
Delivery insights into the order fulfillment status
34%
Predictive analytics to assist with forecasting and procurement
33%
Insights on customers’ locations and buying behaviors
Therefore, the future of fulfillment will rely on the industry’s ability to evolve tech
capabilities and access in order to meet new demands.
Over the last 1 -2 years, 39% of respondents have reevaluated their warehouse
technology providers and costs.
A third (33%) of respondents believe co-warehousing offers access to better

fulfillment and automation capabilities.
The Future Is Asset-Light
A rapidly evolving supply chain and consumer market has shown SMBs the value
of flexibility and resilience. With a growing appetite for shared and co-warehousing
fulfillment models, merchants are seeking advanced capabilities without the capital
investment of traditional enterprise-grade solutions.
ABOUT WARE2GO
Ware2Go, a UPS company, simplifies the supply chain for merchants of all sizes. The
company’s integrated technology platform connects any sales channel to a flexible,
nationwide warehouse network to enable affordable 2-day delivery with UPS’ trademark
shipping reliability. Ware2Go’s shared warehousing model enables an asset-light
solution that gives merchants access to sophisticated fulfillment capabilities from
warehouse automation to business intelligence to gain operational efficiency, grow
margins and meet sustainability goals.
About the survey
The Future of Fulfillment is based on

a December 2022 survey conducted
by Dynata of 1,000 U.S. SMBs making
$750K to $100M in revenue.

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Strategies for resilient and profitable supply

chains in 2023 and beyond

Respondents noted the past year presented the

Rising costs in a tightening market

A changing labor market

Rising awareness of environmental impact

With those challenges in mind, SMBs indicate

38% 31% 36%

The limitations of traditional outsourced fulfillment

Traditional models often require long-term commitments to an

Legacy Warehouse Management Systems (WMS) do not provide

Regional 3PLs offer limited delivery coverage. The solution is often

Shared warehousing Strategic Tech

Solution 1: Co-warehousing is the future

A co-warehousing model allows merchants to share resources from space to labor to

have looked to more have made the move

A full 67% of respondents agree that we will see a

The Benefits of co-warehousing

More time to focus Access to

Solution 2: Partnering with Retail Brands

Thus, 90% of SMBs are open to such partnerships

However, respondents expressed the following concerns:

The retailer prioritizing Lack of flexibility and Lack of transparency

Sharing customer data Having to integrate a

Solution 3: Tech investment

SMBs report an increasing need for enhanced technical capabilities in logistics

SMBs are looking for technology that enables:

A third (33%) of respondents believe co-warehousing offers access to better

About the survey

The Future of Fulfillment is based on

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