Warehouse management system prices falling for small companies

It appears that prices have been falling dramatically for warehouse management systems (WMS) over the past several years, for software, hardware (scanners, label printers, RF guns, etc.) and even services, to the point where WMS solutions are genuinely affordable for small companies.

Steve Banker at ARC Advisory Group writes recently,

The price for solutions for small companies can be startlingly low. ARC talked to 6 suppliers who have an average selling price for software licenses of less than $50,000 for this segment. These solutions would also typically require an implementation fee of roughly $1,500 per day. Implementations would range from about 3 days for a simple, prepackaged solution to about 40 days for a more functionally rich solution.

My consulting firm, Strativa, has some direct insight as well. We recently conducted an IT due diligence exercise for a private equity firm. The investment target is wholesale distribution firm with under $50 million in annual revenues. In the course of our due diligence we found that the company was about to implement a warehouse management system in three warehouses nationwide. We were pleased to find that management is only spending about $150,000 on the project, all-in. Hardware is about $60,000, which leaves $80,000 for software and implementation services, including integration into the company's Tier III ERP system. Furthermore, this is not a low-ball bid. The vendor has good references for this type of project and is on target to meet its budget.

WMS used to be a big ticket item for small wholesale distribution firms, but no longer. It's a welcome trend.

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