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Your warehouse seemingly grew overnight. What was once the logistics hub for a few brands now has a whole array of customers, and you’re struggling to keep up with the sheer volume, mainly because of outdated software.<\/p>\n
If this scenario sounds familiar, it’s definitely time for a new warehouse management system (WMS)<\/a>\u2014but which one should you choose? And what WMS software cost<\/a> structure fits best with your business?<\/p>\n Software as a subscription (SaaS) models benefit from frequent updates and technology advances that provide a competitive advantage. If you haven’t already, you’ll quickly learn that WMS use one of two software pricing models<\/a>: volume-based and per-user. We believe volume-based pricing models like Logiwa IO<\/a> make the most financial and operational sense for growing warehouses.<\/p>\n <\/p>\n Contents\u00a0<\/p>\n <\/p>\n We\u2019ll look at\u00a0 two primary pricing models to consider when shopping for a new WMS. Here’s how each one works.<\/p>\n The pricing of this model depends entirely on the number of users who have accounts with the system. As you add more users, your monthly costs increase. Conversely, they drop when fewer users have access to the WMS.<\/p>\n A per-user pricing model might appeal to smaller warehouses with few employees. But issues arise when you try to scale<\/a>. If you double the size of your warehouse or expand to new locations, your WMS costs<\/a> can increase exponentially.<\/p>\n Another issue is productivity. With a per-user pricing model, WMS vendors have little incentive to implement new features that streamline warehouse processes. This can actually reduce a warehouse’s operational efficiency since not all\u00a0 workers may not have access to the system.<\/p>\n Under this type of WMS pricing model, you pay based on order levels. User accounts are not limited; your monthly bill depends on transaction volume (the number of orders processed).<\/p>\n This pricing model has positive consequences for WMS vendors and their customers. The WMS provider is incentivized to expedite warehouse activities with advanced features that optimize throughput. As warehouse volume increases, so does WMS usage.<\/p>\n Logiwa IO’s Fulfillment Management System (FMS)<\/a> uses a volume-based pricing model<\/a>. We’ve found that this strategy empowers all warehouse workers to use the system, boosting collaboration and eliminating the bottlenecks commonly associated with user-based WMS systems.<\/p>\n There are several pitfalls associated with adopting a WMS that follows per-user pricing.<\/p>\n If the WMS is only available to a handful of workers, a large portion of your team may rely on those with access.<\/p>\n The results of this scenario will depend on how busy your warehouse is. If your team has a constant stream of incoming orders and shipments, waiting for an approved user to print out the details and shipping labels can be a massive headache. Workers dependent on a staff member’s availability may wait long periods to receive their next order.<\/p>\n A per-user pricing model can actually hinder warehouse growth. As expansion occurs, you may need to hire more workers and grant them access to the WMS, increasing your monthly system costs.<\/p>\n\n
Understanding WMS pricing models<\/h2>\n
Traditional per-user pricing for WMS<\/h3>\n
Volume-based pricing model<\/h3>\n
Limitations of per-user pricing for WMS<\/h2>\n
Operational Bottlenecks Due to Limited User Access<\/h3>\n
Financial Challenges During Business Growth<\/h3>\n