Drone Logistics: The Future of Last-Mile Delivery

From Delhi's busy markets to Kochi's coastal hubs, India's e-commerce boom has increased the need for quick and easy supplies. Traditional methods have trouble with traffic and getting to places far away, but drone operations are a game-changer. Drone transport is changing how things get to customers by making last-mile delivery quick and environmentally friendly. A study from 2024 says that the Indian drone market will grow at a 20.4% CAGR, going from USD 1,581.5 million in 2024 and expected to reach USD 4,835.9 million by 2030. This technology will change the way logistics are done.This blog talks about drone logistics, how they work, and how they could help Indian companies. Getting to know the drone delivery companies in India can help you find new business possibilities, whether you are shipping electronics or medicines.What Is Drone Logistics?Unmanned aerial vehicles (UAVs) are used in drone logistics to move goods, mostly for last-mile delivery, inventory control, or surveillance. In last-mile delivery, drones bring goods straight to customers, skipping traffic and cutting costs. For instance, an online store in Gurgaon can use drones to send electronics to the regions of Delhi in less than 30 minutes. Drones can also check warehouse stock or keep an eye on transportation centres, which makes things run more smoothly. A 2024 FarEye study says that drones can cut delivery costs by up to 70% compared to vans. This makes them perfect for India's cities and countryside. This technology makes things easier, which gives Indian companies an edge in the fast-growing e-commerce market. How Do the Logistics of Drones Work?With the help of AI and navigation systems, drone travel for last-mile delivery is a simple process. Here are the main steps:Step 1: Place an OrderSomeone makes a purchase online. For example, someone in Chennai gets medicines through an online store.Step 2: Get the Package ReadyAt a fulfilment centre, the seller prepares the box and makes sure it doesn't go over the drone's weight limit, which is usually less than 2 kg. The order from Chennai is packed up and put on a drone.Step 3: Send the DroneThe drone, which has GPS and AI, is sent out from a hub nearby. It flies straight to the customer, skipping traffic in a neighbourhood of Chennai.Step 4: Carry Out the DeliveryPrecision landing helps the drone get the package to a certain place, like a deck or drop zone. In twenty minutes, the customer gets the medicine.Step 5: Bring the Drone BackThe drone goes back to the hub to be charged or to make the next delivery, which quickly completes the cycle.Imagine ordering a pizza in Mumbai. Instead of a delivery person stuck in traffic, a drone flies it to your doorstep in 15 minutes, like a high-tech kite. A Kochi retailer can similarly deliver essentials to rural Kerala, showcasing drone logistics in action.Benefits of Drone LogisticsWhat does drone transport offer Indian businesses? It boosts speed, cuts costs, and enhances sustainability. Below are key benefits, presented clearly for all stakeholders.Faster Deliveries: Drones bypass traffic, delivering in urban areas like Bangalore in under 30 minutes, 50% faster than vans, per a 2024 Skye Air study.Cost Efficiency: Operating costs are up to 70% lower than trucks, with minimal fuel and labour, saving ₹500 per delivery, per FarEye 2024.Remote Access: Drones reach rural or disaster-hit areas, like Assam’s flood-prone regions, improving service for 20% of India’s population.Environmental Benefits: Drones use 94% less energy per package than vehicles, reducing carbon emissions, and are vital for eco-conscious brands.Contactless Delivery: Drones ensure safe, no-contact delivery, which is critical post-COVID, enhancing customer trust in cities like Delhi.Scalability: Drone fleets scale easily, meeting e-commerce growth, unlike traditional fleets, per a 2024 TechEagle report.Top 5 Drone Delivery Companies in IndiaIndia’s drone sector is thriving, with innovators leading the charge in last-mile delivery. These companies are transforming e-commerce by delivering goods swiftly and sustainably, from bustling cities to remote villages. Below are the top 5 drone delivery companies in India, shaping the future of drone logistics with cutting-edge technology and Directorate General of Civil Aviation (DGCA)-backed trials.1. TechEagleFounded in 2017 by IIT Kanpur alumni in Gurgaon, TechEagle pioneers drone-based logistics for healthcare and e-commerce. Its zero-emission drones cover long distances, delivering essentials to urban Delhi and rural Uttar Pradesh. The company’s focus on scalability and sustainability makes it a frontrunner, with trials in Telangana since 2021. TechEagle’s AI-driven navigation ensures precision, reducing delivery times by 40%, per a 2024 report.2. Skye Air Mobility Based in Delhi, Skye Air specialises in AI-powered drone transport for e-commerce, healthcare, and agriculture. Its drones navigate complex terrains, enabling deliveries in Mumbai’s crowded suburbs or Rajasthan’s arid regions. The company’s robust ecosystem, backed by DGCA approvals, supports same-day delivery, boosting efficiency by 30%. Skye Air’s commitment to innovation positions it as a key player in India’s drone revolution.3. Throttle Aerospace Systems Operating from Bangalore, Throttle Aerospace offers autonomous drones tailored for logistics in dense urban markets. Its focus on safety and precision ensures reliable deliveries, even in high-traffic areas like Bengaluru’s tech hubs. The company integrates drones with existing logistics chains, enhancing last-mile efficiency. Throttle’s solutions are ideal for SMEs seeking cost-effective delivery options, per a 2024 industry analysis.4. Redwing Labs Headquartered in Bangalore, Redwing Labs partners with e-commerce and healthcare firms to deliver scalable drone transport solutions. Its drones, tested in government initiatives across Rajasthan, excel in reaching remote areas. Redwing’s modular approach allows businesses to integrate drones seamlessly, cutting delivery costs by 25%. The company’s focus on rural outreach makes it vital for India’s diverse logistics needs.5. Zipline India A global leader, Zipline expanded to India, focusing on medical and e-commerce deliveries in remote regions like Arunachal Pradesh. Its long-range drones, capable of navigating challenging terrains, deliver critical supplies in under 30 minutes. Zipline’s advanced technology, backed by international expertise, supports India’s healthcare logistics. Its 2024 trials in Karnataka highlight its potential to transform rural delivery.These firms, supported by DGCA approvals since 2021, are making drone logistics viable through trials in Telangana, Karnataka, and beyond. Their innovations are setting the stage for a new era of last-mile delivery in India, bridging urban-rural divides.Challenges in Drone LogisticsDespite its potential, drone transport faces hurdles in India:Regulatory Restrictions: DGCA rules limit airspace access, requiring licences and altitude caps, delaying urban rollout, per a 2024 FICCI report.Battery Life: Limited range (20 to 30 km) restricts deliveries, with payload and weather reducing efficiency.Weather Dependency: Monsoons or winds disrupt flights, affecting 30% of operations, per Skye Air 2024.High Costs: Initial investments in drones and infrastructure (₹10 lakh per hub) challenge SMEs.Privacy Concerns: Public resistance to drone surveillance, reported by 40% of urban consumers, slows adoption.Strategies to Implement Drone LogisticsTo leverage drone logistics, Indian businesses can adopt these practices:Partner with Drone Firms: Collaborate with TechEagle or Skye Air for cost-effective trials, reducing setup costs by 50%.Optimise Routes: Use AI tools like FarEye for real-time tracking, cutting delivery times by 20%.Focus on Lightweight Goods: Prioritise small packages (under 2 kg), ideal for 80% of e-commerce orders.Secure Approvals: Work with DGCA for permits, ensuring compliance in cities like Delhi.Build Infrastructure: Invest in landing zones at fulfilment centres, as Zipline does in Maharashtra.Future of Drone Logistics in IndiaThe future of drone transport is bright, with India’s government easing DGCA rules and launching the Drone Shakti scheme in 2022. By 2030, drone logistics could handle 10% of last-mile deliveries, per a NITI Aayog 2024 forecast. Urban hubs in Bangalore and rural outreach in Odisha will drive growth. Drone delivery companies in India are testing heavy-duty drones for larger loads, potentially reducing costs to ₹30 per parcel by 2030, down from ₹500 in 2024.Enhance Your Delivery with WareIQ’s SolutionsTo harness drone transport, integrate with robust logistics. WareIQ, a Y Combinator-backed e-commerce fulfilment platform, empowers Indian businesses to adopt drone logistics seamlessly. Whether you are a spice trader in Kochi or an electronics seller in Surat, WareIQ optimises your delivery.WareIQ offers:Nationwide Network: 12+ city fulfilment centres align with drone hubs, speeding deliveries.AI-Driven Planning: Inventory LogIQ forecasts demand, optimising drone schedules.Seamless Integration: Connect with Amazon or Shopify, streamlining drone-compatible orders.Real-Time Tracking: Monitor drone deliveries, ensuring 99% accuracy.Compliance Support: Navigate DGCA rules for smooth operations.With WareIQ, embrace drone logistics to enhance efficiency and grow globally.ConclusionDrone logistics is transforming last-mile delivery in India, offering speed, sustainability, and access to remote areas. By understanding its mechanics and benefits, businesses can leverage drone transport to meet e-commerce demands. Despite challenges like regulations and costs, drone delivery companies in India are paving the way. Whether delivering medicines in Chennai or gadgets in Gurgaon, this technology is the future of logistics.Partner with WareIQ, adopt AI tools, and secure approvals to unlock drone logistics’ potential. In India’s dynamic e-commerce landscape, drones are your key to fast, cost-effective delivery.Frequently Asked QuestionsWhat is drone logistics?Drone logistics uses unmanned aerial vehicles for last-mile delivery, inventory management, or surveillance, offering fast, cost-effective transport, per FarEye 2024.Is drone delivery available in India?Yes, drone delivery is available in India through trials by TechEagle, Skye Air, and Zipline, approved by DGCA in states like Telangana since 2021.Which company is best for drones in India?TechEagle and Skye Air lead for e-commerce and healthcare deliveries, with scalable, AI-powered solutions, per a 2024 industry report.

November 06, 2025

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Top 4 Inventory Valuation Methods Explained with Examples

Inventory valuation is essential for accounting and financial reporting purposes. The method by which a business values its inventory can impact several other key aspects, including cost of goods sold (COGS), gross profit, applicable taxes, and the balance sheet. According to accounting standards, having the correct method and applying it consistently is crucial. In this article, we will examine the top four inventory valuation methods, accompanied by relevant examples.What Does It Mean By Inventory Valuation?Inventory valuation is essentially the accounting process of assigning a monetary value to a company's assets, including its stock. In simple terms, inventory valuation determines how much your inventory is worth at a given point in time. On the balance sheet, inventory is recorded as a current asset.On an income statement, the cost of inventory sold during a period is recorded as Cost of Goods Sold (COGS), which impacts gross profit.Why Inventory Valuation Methods Matter?Inventory valuation has several benefits, such as:Inventory is often one of the most significant current assets on a company's balance sheet. Misvaluing inventory can distort both profit and financial ratios.With inflation (or deflation), different methods produce very different values for ending inventory and COGS, thus affecting net income.Standards (GAAP, IFRS) require the disclosure of the method used and consistency. If there is a change in the inventory valuation methods, it must often be disclosed and sometimes applied retrospectively.To assess the financial stability of a business for loan approval, it is based on the company's balance sheet and the valuation of its inventory.Inventory valuation can also impact the tax a business pays.Correct inventory valuation can provide essential data that helps inform strategic decision-making for future purchases and effective inventory management.What Are the Various Methods of Inventory Valuation?Inventory valuation can be performed using different recognised methods, which will ultimately affect the Cost of Goods Sold (COGS), ending inventory value, and overall financial reporting in various ways. Here are 10 methods of inventory valuation that are widely used:1. FIFO (First-In, First-Out): Assumes the oldest inventory is sold first, so the ending inventory reflects the most recent costs.2. LIFO (Last-In, First-Out): Most recently purchased items are sold first; the ending inventory reflects the oldest costs. Allowed under US GAAP, prohibited under IFRS.3. Weighted Average Cost / Average Cost Method: This method uses a weighted average of all the inventory costs, no matter if it is ending inventory or COGS.4. Specific Identification Method: Tracks the actual cost of each item sold, ideal for high-value or unique goods.5. Retail Inventory Method: Estimates inventory value using a cost-to-retail ratio, standard for retailers.6. Lower of Cost or Market (LCM): In this method, the inventory is recorded at the lower of historical cost or market value to prevent overstatement.7. Net Realisable Value (NRV): Here, inventory is valued at the estimated price minus costs to complete and sell.8. Replacement Cost Method: This method values inventory at the cost to replace it; it is majorly used for insurance or risk assessment.9. Standard Cost Method: The method uses predetermined standard costs for inventory, comparing actual costs to standards to record variances.10. Gross Profit Method: This method estimates ending inventory based on historical gross profit percentages, often for interim financial reporting.The Top Methods of Inventory Valuation: Examples IncludedBusinesses rely on various inventory valuation methods to determine key aspects, such as the cost of goods sold and the ending inventory value. Amongst the different inventory valuation methods, here are the top four that are mainly used by businesses:1. FIFO ((First-In, First-Out)Under the FIFO method of inventory valuation, older inventory is first sold out before new inventory is procured. Eventually, the ending inventory signifies the most recent purchase costs. This method aligns closely with the physical flow of goods such as food, perishable items, or cosmetics.In times of inflation, the FIFO method of inventory valuation results in a lower cost of goods sold because older and cheaper inventory is sold first, leading to higher profits. However, this also means a higher taxable income compared to other methods, such as LIFO.Let us understand this with an example:DateUnits PurchasedCost per UnitJan 1100$10Feb 15200$12May 1100$15These are the purchase inventory at different time periods.If the company sells 250 units, then, as per the FIFO method of inventory valuation:The first 100 units sold are from the Jan 1 batch at $10 each = 100 x $10 = $1,000The following 150 units sold are from the Feb 15 batch at $12 each = 150 x $12 = $1,800Hence, the COGS = $2,800.Whereas, the ending inventory is:Remaining 50 units from Feb 15 batch = 50 x $12 = $600100 units from May 1 batch = 100 × $15 = $1,500So, the ending inventory = $2,100.2. LIFO (Last-In, First-Out)In the LIFO method of inventory valuation, it is assumed that the most recently acquired items are sold first, leaving the older inventory on the balance sheet. This method is mainly used in environments with rising prices, as it assigns the latest, higher costs to the Cost of Goods Sold (COGS).While it may reduce tax liability, LIFO can make the balance sheet inventory appear understated, as older, lower-cost items remain in inventory.Let us understand this with an example:DateUnits PurchasedCost per UnitJan 1100$10Feb 15200$12May 1100$15These are the purchase inventory at different time periods.If the company sells 250 units, then, as per the LIFO method of inventory valuation:The first 100 units sold are from the May 1 batch at $15 each = 100 x $15 = $1,500The following 150 units sold are from the Feb 15 batch at $12 each = 150 x $12 = $1,800So, the COGS = $3,300Whereas, the ending inventory is:Remaining 50 units from Feb 15 batch = 50 × $12 = $600100 units from Jan 1 batch → 100 × $10 = $1,000Thus, the ending inventory stands at $1,600.3. Weighted Average Cost Method (Average Cost Method)In the average cost method of inventory valuation, the average cost of all inventory available for sale during a period is applied to both COGS and the ending inventory. This method smooths out price fluctuations over time, making it particularly useful for businesses with large volumes of homogeneous items where individual tracking is impractical.Contrary to FIFO or LIFO, there is no specific flow of goods. It helps simplify accounting and also reduces the impact of sudden price changes. Let us understand this with an example:DateUnits PurchasedCost per UnitJan 1100$10Feb 15200$12May 1100$15These are the purchase inventory at different time periods.Total units available = 400Total cost = 100×10 + 200×12 + 100×15 = $4,900Weighted average cost per unit = $4,900 ÷ 400 = $12.25If the company sells 250 units, then, as per the average cost method of inventory valuation:COGS = 250 × $12.25 = $3,062.50Ending Inventory = 150 × $12.25 = $1,837.504. Specific Identification MethodThe specific Identification method of inventory valuation assigns the actual cost of every specific item sold to the Cost of Goods Sold (COGS). It is therefore the best inventory valuation method. This approach is ideal for high-value, unique, or easily distinguishable items, such as cars, jewellery, or artwork, where tracking individual units is feasible. This method provides highly accurate profit reporting. However, the drawback is its administrative burden, making it impractical for businesses with large volumes of identical items.Let us understand this with an example:ItemCost PricePhone A$500Phone B$700Phone C$600This is the stock of 3 phones in the inventory.If the store sells Phone A and Phone C:COGS = $500 + $600 = $1,100Ending Inventory = Phone B = $700Which is the Best Inventory Valuation Method?The choice of the best inventory valuation method for your business will depend on several factors, such as:The nature of the inventory.The cost volatility.Tax environmentRegulatory environmentAdministrative capacityFinancial presentation goalsFor many businesses, a combination of FIFO or the Weighted Average method works. However, if there are exceptional items, then a specific identification method becomes more relevant.Get an Accurate Evaluation of Your Inventory With Various Tools From WareIQWareIQ is a Y-Combinator-backed eCommerce full-stack platform offering multi-channel fulfillment across D2C, Marketplaces, Quick Commerce, and B2B (General Trade & Modern Trade)Our solution offers:Pan-India network of Seller Flex & FAssured compliant across 12+ cities operated by WareIQ, and shipping partners for last-mile delivery across 27000+ pin codesMulti-Channel Fulfilment Platform with plug-and-play integrations across marketplaces (Amazon, Flipkart, Myntra, Nykaa, etc.), D2C platforms (Shopify, Magento, WooCommerce, etc.), WMS, and ERPs, to support fulfilment across distributors, flagship stores and eCommerce channels with analytics capabilities to assess operational performanceInventory LogIQ: AI-led multi-channel inventory planning solution to minimise stockouts and automate replenishmentLeverage the Tech-enabled returns QC solution to capture, centrally store, and auto-index HD media evidence of damaged or missing returned products and eliminate marketplace claims rejections.A host of seller enablement and support - dedicated account manager, APOB/PPOB registrations, GST registration, NDR & COD verification, etc.ConclusionInventory valuation is not just another accounting task; it is a strategic decision that will have an impact on various aspects of a business, such as profits, taxes, and financial reporting. The top inventory valuation methods include FIFO, LIFO, Weighted Average and Specific Identification. Each method has unique advantages tailored to your business's specific requirements. The correct method can help to optimise profits, manage costs, and gain a competitive edge.Suggested - 7 Inventory Management Techniques: Exploring FIFO, FEFO, and LIFO MethodsFAQs About Inventory Valuation MethodWhich method is best for perishable goods?FIFO is the most suitable option, as it ensures that older items are sold first.Can a company change its method of inventory valuation?Yes, but changes must be disclosed and justified in financial statements.Which method is most accurate for determining the value of high-value items?Specific Identification, because it tracks actual costs per item.How often should inventory valuation be reviewed?Regularly, at least annually, or whenever significant cost changes occur, to ensure accurate reporting.

November 05, 2025

What Is a Parcel Management System and Why Do You Need One?

The e-commerce logistics market in India is rising at a quick rate. In fact, by 2027, the e-commerce logistics market in India is expected to reach USD 11.48 billion. With this growth, billions of parcels are expected to be shipped annually across different regions. Still, a report suggests that approximately 20-30% of the parcels fall into the 'return to origin' category due to delays or misrouting.This is where a Parcel Management System steps in. A Parcel Management System (PMS) provides the centralised visibility and control businesses need to navigate this complexity, reduce costs, and deliver superior customer experience in an increasingly competitive market.Today, we will explore what a Parcel Management System is and why it is essential to have one available.What is a Parcel Management System (Introduction)?A Parcel Management System (PMS) is a digital platform used to streamline, track, and optimise the end-to-end process of shipping parcels. It helps simplify the handling of incoming and outgoing parcels. Instead of juggling multiple courier dashboards, spreadsheets, and emails, businesses can use a PMS to manage all parcel-related operations from a single interface.A PMS helps in:Booking of shipments with multiple carriers,Tracking the parcel status in real time,Parcel management, auditing, and consulting help identify hidden costs by auditing invoices.Managing return-to-origin (RTO) casesAnalysing shipping data to optimise future decisions.In simpler terms, whether you're an e-commerce brand, a 3PL provider, or even a retail store handling online orders, a Parcel Management System acts as the backbone of efficient parcel shipping management.Features of the Parcel Management SystemA Parcel Management System or PMS, is not only about tracking deliveries. It is a complete logistics optimisation tool. Utilising the right PMS can help businesses reduce costs, minimise errors, and improve customer satisfaction. Here are some of the key features of PMS:Centralised Dashboard: A PMS provides a single dashboard where you can book shipments, monitor statuses, manage returns, and generate reports in real-time.Real-Time Parcel Tracking: A PMS integrates with carriers to provide end-to-end tracking with live status updates and automated notifications for both businesses and customers.Multi-Carrier Integration: A PMS enables you to connect with multiple carriers simultaneously. This enables more thoughtful decision-making; you can choose carriers based on cost, speed, or region.Automated Shipping Labels & Documentation: From generating AWBs (Air Waybills) to customs documents for international shipping, a PMS automates the paperwork, reducing manual errors and saving time.Invoice Auditing & Cost Management: A PMS includes parcel management auditing and consulting features that verify courier invoices, flag discrepancies, and ensure you only pay for what's accurate.RTO & Returns Management: With a Parcel Management Software, businesses can track, analyse, and reduce RTO rates by identifying patterns and addressing customer issues proactively.Data Analytics & Reporting: Modern PMS solutions feature analytics dashboards that display shipping costs, delivery performance, RTO trends, and cost management in graphical representations, facilitating better decision-making.Scalability & Small Parcel Management: A PMS seamlessly adapts to your scale, irrespective of the volume. Some platforms even offer specialised small parcel management tools for SMEs and growing businesses.Customer Communication Tools: Modern PMS solutions can seamlessly integrate automated SMS, WhatsApp, or email notifications. This ensures that customers are always informed about their order status, reducing support calls and thereby improving overall satisfaction.Security & Compliance: With parcel data involving addresses, payments, and customer information, PMS platforms ensure data security, GDPR compliance, and secure integrations with carriers.10 Reasons Why You Should Get A Parcel Management SystemConsidering today's logistics industry, managing parcels manually can be highly chaotic and time-consuming. Many e-commerce sellers face challenges like rising shipping costs, return-to-origin (RTO) losses, courier delays, and eventually unsatisfied customers; hence, having a parcel shipping management system has become essential.Here are the parcel management benefits:1. Centralise Your End-to-End Parcel Management ProcessManage all shipments from a single, unified dashboard for enhanced control and visibility.Businesses can avoid juggling multiple courier portals and emails.It will help with bookings, deliveries, and returns in one place.It will considerably reduce errors caused by manual coordination.2. Save Cost With Smart Auditing Businesses can reduce unnecessary expenses by verifying invoices and comparing rates to ensure they are accurate and competitive.Detects hidden courier surcharges or incorrect weights.Compare carrier rates before shipping to choose the most cost-effective option.Leverage parcel management, auditing, and consulting to identify cost leakages.3. Tracking in Real-time and TransparencyProvide customers with visibility and proactive updates. It can help to:Offer end-to-end parcel tracking across carriers.Send automated SMS/email notifications with live status.Build customer trust with accurate delivery timelines.4. Reduce Return-to-Origin (RTO) LossesA Parcel Management System helps to lower one of the biggest concerns for sellers, RTO. A PMS essentially:Will flag high-risk shipments (COD orders, unverifiable addresses).Help to analyse RTO patterns to prevent repeat issues.Manage returns smoothly to minimise financial impact.5. Scale Up SeamlesslyGrow effortlessly without operational bottlenecks, as a PMS can:Supports small parcel management for startups/SMEs.Scales up to handle thousands of parcels daily.Adapts to seasonal spikes and business expansion.6. Get Data-Driven Insights Now, businesses can turn logistics data into actionable business intelligence, as a PMS allows:Access to cost management in the parcel industry graphs for visibility.Monitoring of KPIs like courier performance and cost per shipment.Forecasting demand and optimising carrier selection.7. Better EfficiencyIt is now possible to save time and improve efficiency by automating routine shipping tasks:Generate shipping labels, invoices, and manifests instantly with PMS.Automating courier bill reconciliation.Automation of tasks will free up staff to focus on core business growth.8. Enhanced Compliance and SecurityParcel Management System can help to protect customer data while staying compliant with regulations:Secure integrations with carriers and payment systems.Compliance with GDPR, PCI DSS, and regional data laws.Build customer trust by ensuring the safe handling of parcel data.9. Improving the Customer ExperienceBusinesses can now ensure customer satisfaction by delivering a seamless post-purchase journey to foster loyalty. A Parcel Management Software will help to:Provide accurate delivery ETAs and proactive updates.Helps in the simplification of return handling for customers.Reduce "Where is my order?" support calls.10. Gain Competitive Edge Businesses can outpace competitors who are still managing the parcel manually, as PMS helps to:Deliver faster and more reliably.Lower shipping costs while improving customer satisfaction.Strengthen your market position with efficient logistics.A Parcel Management System doesn't just improve shipping; it helps in boosting the overall efficiency, reduces costs, and enhances customer loyalty, all of which drive long-term growth.Simply Your Parcel Management With Smart Solutions from WareIQWareIQ is a Y-Combinator-backed eCommerce full-stack platform offering multi-channel fulfillment across D2C, Marketplaces, Quick Commerce, and B2B (General Trade & Modern Trade)Our solution offers:Pan-India network of Seller Flex & FAssured compliant across 12+ cities operated by WareIQ, and shipping partners for last-mile delivery across 27000+ pin codesMulti-Channel Fulfilment Platform with plug-and-play integrations across marketplaces (Amazon, Flipkart, Myntra, Nykaa, etc.), D2C platforms (Shopify, Magento, WooCommerce, etc.), WMS, and ERPs, to support fulfilment across distributors, flagship stores and eCommerce channels with analytics capabilities to assess operational performanceInventory LogIQ: AI-led multi-channel inventory planning solution to minimise stockouts and automate replenishmentLeverage Tech-enabled returns QC solution to capture, centrally store, and auto-index HD media evidence of damaged or missing returned products and eliminate marketplace claims rejections.A host of seller enablement and support - dedicated account manager, APOB/PPOB registrations, GST registration, NDR & COD verification, etc.ConclusionParcel handling is not just a back-office task for businesses; it has become a critical business driver. Billions of parcels are shipped each year, and customers expect to receive even better service. Hence, there is no room for delays, hidden costs, and, more importantly, missed deliveries. A Parcel Management System (PMS) solves these challenges by centralising operations, automating routine tasks, reducing costs, and delivering the visibility both businesses and customers need.Whether you run a small enterprise which handles a handful of parcels or a multinational brand handling thousands, the benefits of having a PMS are indeed undeniable. A PMS is a strategic investment that can help your business to stay competitive, agile, and profitable in a parcel-driven economy.FAQS About Parcel Management SystemWhat is a Parcel Management System?Parcel Management System is a software solution that centralises parcel shipping, tracking, auditing, and returns in one platform.Who needs a Parcel Management System?E-commerce brands, retailers, 3PL providers, and any business shipping parcels regularly.What are the main benefits of using a Parcel Management System?The primary benefits include savings, faster deliveries, real-time tracking, reduced RTOs, and improved customer satisfaction.What features should I look for in a Parcel Management System?Multi-carrier integration, auditing tools, analytics, automation, and scalability are essential features for effective management.

November 04, 2025

Transportation Charges GST Rate: What You Must Know

Did you know that about 70% to 75% of India's GST revenue for the year 2023-24 came from the 18% slab? Moreover, approximately 13% to 15% of India's Goods and Services Tax (GST) revenue was collected from the 28% slab. This means that a significant amount of revenue is generated from GST on transportation, and, yes, your trucking bill is a substantial contributor to this number. As the Goods and Services Tax (GST) came into effect, significant changes have been made to the taxation system for transportation, particularly for businesses. This has led to an increased need to understand the details of transportation charges GST rates. Let's look at what you must know about transportation and GST rates.What is the GST Rate on Transportation Charges?Depending on the mode of transportation, such as rail, road, air, or water, a specific GST rate applies. The rate will vary further according to the type of service provided under each mode of transportation.GST Rate on Road Transport ServicesThe GST rate is fixed for any road transportation services, firstly, based on the mode of transport and secondly, on the nature of the service. Public modes of transportation, including buses, metros, and trains, are generally exempt from GST. This ensures that public transportation is both easily accessible and affordable for passengers.When it comes to the GST rate, which will be applicable on taxis and cabs, a 5% GST is levied. Operators can opt to pay 12% GST if they intend to claim an input tax credit (ITC).Here is a table that explains the different GST rates for road services:Mode of TransportGST Rate Public Transport (for passengers)0%Transportation via metered rickshaw, e-rickshaw or cab0%Buses (Non-AC)0%Buses (AC)5%Radio taxis or similar transportation options5%Rentals (cars, buses, and coaches)18%GST on Rail Transportation ServicesEvery rail ticket that is issued contains a fixed amount of GST that is decided based on the mode and the service. However, this GST rate is subject to periodic changes.Here are the GST rates which are applicable for rail transportation services:Mode of TransportGST Rate Sleeper and general class tickets5%AC and First Class tickets5%Metro tickets or tokens12%GST on Air Transportation ServicesTransportation via air is also subject to GST rates. The GST rate will change based on the mode of transport and the service availed. Although the GST rate remains standard for all airlines, there can be certain changes.Here are the GST rates which are applicable for air transportation services:Mode of TransportGST Rate Economy class air tickets5%Chartered flight tickets for pilgrimage5%Rental services of aircraft or chartered flights (with or without operator12%Business-class air tickets12%GST on Water Transportation ServicesGST is also applicable for transportation via inland waterways. However, there is no provision for Input Tax Credit (ITC).Here are the GST rates which are applicable for water transportation services:Mode of TransportGST Rate General passenger boats5%Ferry services on rivers or canals5%Cargo transport (renting or hiring vessels)18%GST on Road Transportation Service: GTA Goods Transport Agency (GTA) is a business entity that specialises in providing transportation services exclusively for goods. It plays an important role in the logistics sector; therefore, under GST, there are compliance requirements for GTA as well. The GST rate applicable to a GTA will vary depending on factors such as the type of goods being transported and the total value of the consignment. Here is the GST on goods that are transported via GTA:SituationGST Rate If the GTA does not claim the Input Tax Credit (ITC)5%If the GTA does claim the Input Tax Credit (ITC)12%Forward Charge vs. Reverse Charge Option For GTAGoods Transport Agencies (GTAs) can choose to pay GST themselves under the forward charge rate for the transportation charges system. In this case, they charge either 5% GST without claiming an input tax credit (ITC) or 12% GST with ITC after submitting a yearly declaration.If the GTA doesn't choose this option and goes with 5% GST without ITC, then the reverse charge rate on transportation under the GST system applies. That means the person or business receiving the service must pay the GST, not the GTA.GST on Transportation: Exemptions There are various cases where exemptions are provided on the transportation GST rates, and they are listed below:Any kind of transportation services offered by public transport operators, such as buses, local trains, and metros, are exempt from GST.If transportation services are provided for passenger goods, specified essential commodities, or passengers via Indian Railways, they are exempt from GST.If any mode of transportation transports commodities such as milk, food grains and agricultural produce via road, rail or vessel, it is exempted from GST.When educational or academic institutions provide transportation services for students, staff, or faculty, they are exempt from GST.If passengers are transported via aircraft from airports located in regions such as the Northeastern regions, the Andaman and Nicobar Islands, Himachal Pradesh and Lakshadweep, they are exempt from GST.List of Goods Which are Exempted from GSTGST does not apply to specific transport services, especially those involving essential goods and activities. These exemptions are granted for the following categories:Transport of goods for unregistered individuals or through non-GTA (Goods Transport Agency) services.Movement of agricultural produce and eco-friendly inputs like organic manure.Distribution of registered newspapers and periodicals.Delivery of essential food products, including rice, flour, pulses, milk, salt, and other staples.Shipment of relief materials meant for victims of natural or man-made calamities.Transportation of military and defence-related items.Household goods moved during personal relocations.Freight services where the total charge does not exceed ₹1,500.Also check - Difference Between Transportation and LogisticsTransport Charges HSN Code and GST RateThe Harmonised System of Nomenclature (HSN code) is a classification system useful for taxation purposes. The transportation charges, HSN code, and GST rate are interrelated. Under the GST regime in India, the GST rate and the HSN code differ from one mode of transportation to another. Here is the list of HSN codes applicable to different modes of transportation:Mode of TransportationHSN CodeRoad Transportation996511Rail Transport996512Air Transport996513Water Transport996514Pipeline Transport996515Better Transportation With Shipping Solutions From WareIQWareIQ's smart shipping solution helps eCommerce brands minimise cost leakages caused by RTOs, fake delivery attempts in NDR, weight reconciliation issues, and more. Our solution also offers prompt support for handling urgent client escalations, ensuring smooth operations at all times.Our solution offers the following capabilities:Multi-carrier engine enabling fast deliveries across 24,000+ pin codesControl Tower & automated workflows to minimise NDR & RTOsSame/Next-day delivery courier optionsSeamless Integration with your WMS, ERPs and StorefrontsShipping Badges to display precise Estimated Delivery Dates (EDD)Custom-branded tracking pages and notifications to enhance customer experience.ConclusionThe GST rate on transportation charges might be confusing, but businesses need to understand it to make more informed and cost-effective decisions. Usually, the GST ranges from 0% to 18%. The GST slab will depend on the type of service, mode of transport, and whether or not you claim the ITC. However, some services, such as public transport, agricultural goods, and materials, are exempt from GST. This allows access to such services while also being affordable. On the other hand, premium services and freight movements will also be subject to increased GST rates. When it comes to good transport agencies (GTA), they are allowed to choose between the forward charge GST rate for transporters or the GST rate on transport under reverse charge as per their preference.Suggested - Top 10 Transport Companies in IndiaFAQs About Transportation Charges GST RateAre all transportation services subject to GST?No, not all services are subject to GST. Essential and public services, such as railways or non-AC buses, as well as the transportation of basic goods, are exempt from GST.What GST rates apply to GTA?GTAs can select between 5% without ITC and 12% with ITC. It depends on the chosen tax scheme and tax declaration.Is GST applicable to cab services, such as Uber?Radio taxis and AC taxis will attract 5% GST.Does transporting household goods attract GST?No, the transportation of personal household goods is exempted from GST.

November 03, 2025

How to Get an Export License in India Easily

An export license in India refers to the Import Export Code (IEC), a mandatory identification number issued by the Directorate General of Foreign Trade (DGFT). Without an IEC, neither a business nor an individual can export or import goods legally, unless specifically exempted.For service exports, IEC is not required unless the service provider wishes to claim benefits under the Foreign Trade Policy. This makes IEC crucial mainly for goods trade and policy-linked advantages.Since the introduction of GST, the IEC is equivalent to the Permanent Account Number (PAN) of the firm. However, the Directorate General of Foreign Trade (DGFT) still issues an IEC separately upon receipt of an application.Any business entity, including proprietorships, partnerships, LLPs, private or public limited companies, trusts, HUFs, and societies, can apply for an IEC. In this guide, you will learn about the prerequisites for an IEC, the step-by-step process of applying for an export license in India, the required documents, costs, and more.Pre-Requisites for Applying for IEC: Export License RequirementsTo obtain an Import Export Code (IEC), the applicant firm must fulfil certain prerequisites. IEC can be obtained by a proprietorship, partnership, LLP, private or public limited company, trust, HUF, or society.The firm must have a valid PAN, a bank account in its name, and a proper registered address. The Directorate General of Foreign Trade (DGFT) may physically verify the address after issuing the IEC.Before starting the application, it is essential to have your PAN, bank details, and firm details ready.How to Apply for an Export License in India: Step-by-Step ProcessStep 1: Apply for IECTo begin, apply for an Import Export Code (IEC). A PAN, bank account, and valid firm address are mandatory. The DGFT may physically verify the address after issuance. Keep PAN, bank, and firm details ready before applying.Step 2: Link Your Profile to IECIf you already have an IEC, link it to your user profile on the DGFT portal. A digital signature token will be required for this step.Step 3: View IEC ProfileThe IEC profile stores details of your firm as registered with DGFT. Along with the IEC number, it includes RCMC, industrial registration details, status holder details, and past export performance.Step 4. Print IEC CertificateDownload and print your IEC certificate. It contains the firm’s name, address, IEC number, date of issue, and branch details. New certificates also feature a QR code for online verification.Step 5: Update or Modify IECIf any firm details change, please modify them online through the IEC. The system allows for auto-approved updates, ensuring a quick processing time.Step 6: Surrender IECIf you no longer wish to use the IEC, submit an online surrender request. The IEC will be suspended from transactions, but can be reactivated later by revoking the suspension.Step 7: Request Removal from DELIf your IEC appears in the Denied Entity List (DEL), you can apply online for its removal and regain eligibility for DGFT benefits and schemes.Step 8: Revoke Suspension or CancellationIf the IEC has been suspended or cancelled, submit an online request to revoke the suspension or cancellation and resume transactions.Step 9. Manage Users Linked to IECMultiple users can be linked to one IEC. You can add primary or secondary users and assign them permissions to access DGFT schemes.Step 10. Request for Merger/DemergerIf your IEC has been merged or demerged with another entity, please update the system accordingly. Multiple entities can be linked together under this process.Documents Required for IEC RegistrationHere are the documents required for IEC Registration:Valid Digital Signatures TokenValid PAN Valid Mobile Number and Email IDValid Address Details of the Branch OfficeValid Bank Account in the name of the IEC HolderValid Aadhar Card matching the details with the PAN CardAlso check - Types of Export Incentive Schemes & Benefits for Indian BusinessesExport License Cost in IndiaThe primary cost of obtaining an export license in India is the government fee for the Import-Export Code (IEC). Currently, the fee is ₹500, which is a one-time payment. The IEC is valid for a lifetime and does not require renewal.Export-Import Performance: India’s Data BankHS CodeCommodity2024-2025 (IN Cr)% Share% Growth09Coffee, Tea, Mate and Spices45,433.671.226815.8117Sugars and Sugar Confectionery21,182.410.5720-22.2833Essential Oils, Resinoids, Perfumery, Cosmetic or Toilet Preparations22,862.510.6173-6.8052Cotton53,602.901.4474-4.5358Special Woven Fabrics, Tufted Fabrics, Lace, Tapestries, Trimmings, etc.3,107.360.08394.2857Carpets and Other Textile Floor Coverings17,743.680.479114.2595Toys, Games and Sports Requisites; Parts and Accessories Thereof4,820.530.130211.34Source: TradestatExport Management SystemThe Directorate General of Foreign Trade (DGFT), under the FTDR Act, notifies restrictions, quotas, or conditions on specific categories of exports from India. In such cases, exporters must obtain a license or registration before exporting.The Export Management System provides modules for applying for export licenses, quotas, and registrations. These include licenses for restricted items, SCOMET items, and licenses issued under agreements such as the Indo-US Memorandum of Understanding or Indo-EU arrangements.Restricted ExportsCertain items are restricted for export and require prior approval from DGFT. Exporters must apply for an export license through the system before shipping such goods.SCOMET ExportsExports of Special Chemicals, Organisms, Materials, Equipment, and Technologies (SCOMET) listed in Appendix 3 of Schedule 2 of ITC(HS) require a license. Exporters must submit a request online to obtain this approval.Registration Certificate (RC) for ExportFor certain products, exporters are required to obtain a Registration Certificate (RC) prior to exporting. For example, exports involving the USA’s unilateral export crime control items or regional security items require an RC.Suggested read - Import Export Code RegistrationHow WareIQ Supports Exporters in IndiaWareIQ goes beyond fulfillment to help Indian exporters streamline operations, stay compliant, and scale globally. Here’s how:Pan-India Fulfillment Network: WareIQ’s 12+ city hubs and last-mile delivery coverage across 27,000+ pin codes ensure faster domestic distribution before export dispatch.Seamless Multi-Channel Integrations: Plug-and-play integrations with Amazon, Flipkart, Nykaa, Shopify, Magento, WooCommerce, WMS, and ERPs simplify order management across domestic and international channels.Export-Ready Inventory Management: With Inventory LogIQ (AI-driven planning), exporters can avoid stockouts, automate replenishment, and maintain optimal inventory across markets.Returns & Compliance Support: A tech-enabled returns QC solution captures and stores HD media proof, reducing disputes and marketplace claim rejections—key for exporters shipping to strict compliance markets.End-to-End Seller Enablement: Services such as APOB/PPOB registrations, GST compliance, COD/NDR verification, and dedicated account managers empower exporters to focus on business growth, while WareIQ handles the backend.Suggested read - How to Export from India: A Complete Beginner’s GuideFAQsIs an IEC required for exporting samples from India?Yes, IEC is mandatory even for exporting product samples, unless exempted by DGFT.How long does it take to get an export license in India?The IEC is usually issued within 5-15 working days of a successful online application.Do exporters need separate IECs for each branch or business line?No, one IEC is valid for the entire firm and all its branches or units.Can an individual apply for an IEC without being associated with a registered company?Yes, individuals can apply for an IEC using their personal PAN and bank account details if they plan to export or import goods.What happens if an exporter fails to update IEC details?Failure to update the IEC may lead to deactivation, and exporters will be unable to process shipments until it is reactivated.

October 31, 2025

Role of IT in Supply Chain Management Explained

In today’s fast-paced business environment, the role of IT in supply chain management has become more critical than ever. Modern supply chains are no longer just about moving goods from point A to point B. They involve complex networks of suppliers, manufacturers, warehouses, and customers that require smooth coordination. Supply chain and information technology work hand in hand to bring visibility and agility to these processes. IT is transforming traditional supply chains into intelligent, data-driven systems that can respond quickly to market demands. Understanding this synergy is crucial for businesses seeking to deliver exceptional customer experiences. In this guide, you will learn about the role of IT in supply chain management.Why IT Matters in Modern Supply ChainsInformation technology in supply chain management is essential for efficiency and competitiveness. It enables real-time tracking, accurate forecasting, and better decision-making across networks.Supply chains involve suppliers, manufacturers, transporters, and customers collaborating to work together. Information and supply chain management ensure smooth coordination among these entities.Globalisation has increased competition, demanding smarter and faster operations. IT tools improve visibility, minimise delays, and help predict disruptions effectively.Traditional centralised systems are vulnerable to attacks and failures. Decentralised solutions like blockchain provide secure, transparent, and reliable data sharing.Blockchain creates immutable records that are independent of third parties. This strengthens trust, enhances performance, and supports efficient supply chain flows.Modern supply chains must adopt emerging technologies to remain competitive and survive. Information technology in supply chain management drives resilience, innovation, and long-term growth.Functions of Information Technology in Supply Chain ManagementProcurement and Supplier Management Modern procurement relies heavily on data analysis to optimise supplier relationships and enhance overall efficiency. Spend analysis provides a clear view of expenditure patterns, highlighting opportunities for cost reduction and supplier consolidation.Supplier performance analysis helps organisations assess vendors using KPIs like quality, timeliness, and reliability. This supports smarter supplier selection and builds stronger partnerships.Predictive analytics further strengthens procurement by forecasting demand and inventory needs. It reduces risks of overstock or shortages, ensuring smoother supply chain operations.Logistics, Transportation, and Last-Mile DeliveryTechnology has transformed logistics with real-time tracking and visibility. Expensive and sensitive goods are now monitored using IoT-enabled tracking devices.Cloud-based platforms integrate tracking data from multiple sources. This creates a centralised view of goods movement, improving control and responsiveness.IoT sensors form the backbone of logistics data collection. They can be simple passive tags on packages or advanced edge devices with GPS on trucks and containers.Edge devices provide precise location and long-range communication capabilities. Combined with base stations, they transmit data to the cloud for continuous monitoring.Distribution centres and warehouses benefit from these systems by gaining accurate, real-time insights into asset location and condition.Case Study – Role of IT in Supply Chain Management in ActionThe role of IT in the supply chain management case study is well illustrated by Lotus Herbals’ collaboration with WareIQ. By adopting WareIQ’s full-stack fulfilment solution, the brand streamlined its operations and achieved rapid growth.Key IT-Enabled Advantages for Lotus HerbalsPan-India Network Access: On-demand fulfillment centres, including temperature-controlled warehouses, eliminated upfront investment and supported expansion into two new locations.Smart Fulfillment Platform: Seamless integration with multiple sales channels, lightning-fast order processing, analytics-driven control, and simplified returns management.Shipping Engine: Automated courier selection across 29,000+ pin codes, optimised cost and delivery speed.AI-Powered Inventory Optimisation: Placing the right SKUs in the right quantities at the right locations reduces holding costs and accelerates deliveries.Operational Support: Skilled WareIQ teams managed inwarding, processing, packing, dispatch, returns, and SLA compliance.Marketplace Enablement: Catalogue listing, inventory transfers, pricing, and promotions for Amazon, Flipkart, Meesho, and more boosted marketplace sales.Impact Achieved by Lotus Herbals3x increase in sales across channels11 percentage point improvement in regional shipments1-day reduction in average delivery timelines (1.3x faster deliveries)7.5% lower average cost per shipment20-point reduction in product returnsSCM IT – Key Technologies Powering Supply ChainsRole of AI in Supply Chain ManagementArtificial Intelligence enables predictive insights and smarter decision-making. AI algorithms analyse historical data to forecast demand, optimise inventory, and minimise stockouts. Machine learning models improve supplier selection, delivery scheduling, and risk management. AI-powered chatbots also enhance customer service by providing real-time order updates. The role of information technology in supply chain management is strengthened by AI’s ability to learn continuously and improve accuracy over time.Role of IoT in Supply Chain ManagementThe Internet of Things connects physical assets through sensors and tracking devices. The IoT enables real-time monitoring of goods, from warehouses to the last mile of delivery. Sensors measure temperature, location, and movement, making them vital for industries handling perishable or sensitive items. IoT devices enhance visibility, minimise losses, and provide actionable data for informed decision-making. Its integration demonstrates the growing role of IT in SCM.Role of Blockchain in Supply Chain ManagementBlockchain provides an immutable and decentralised ledger, ensuring transparency and trust. It allows all stakeholders to access a single source of truth for transactions, from raw material sourcing to final delivery. This reduces fraud, improves traceability, and strengthens compliance with regulations. The role of information technology in supply chain management is amplified by blockchain’s ability to secure and validate every transaction without relying on third-party dependencies.Role of Cloud in Supply Chain ManagementCloud technology enables real-time collaboration across global supply chain networks. It centralises data storage, making information accessible to suppliers, manufacturers, logistics providers, and retailers from any location. Cloud platforms scale easily, adapt to business needs, and lower IT infrastructure costs. By providing a unified view of operations, the cloud highlights the role and importance of IT in supply chain management for agility and responsiveness.Role of Automation in Supply Chain ManagementAutomation enhances efficiency by reducing manual tasks and errors. Robotics in warehouses accelerate the processes of picking, packing, and sorting. Automated systems streamline order processing and inventory management, enhancing efficiency and accuracy. In transportation, automated scheduling tools optimise routes and lower costs. The role of IT in SCM is evident, as automation directly improves speed, accuracy, and scalability.Strategic Benefits of Information and Supply Chain ManagementIt is no longer optional to leverage modern technology in managing supply chain functions. To stay competitive in today’s fast-paced global economy, brands must rely on tools that optimise, scale, and move products efficiently around the world. Here are the top five reasons technology outperforms traditional solutions:VisibilityTechnology centralises and controls supply chain information. Operators gain complete visibility, from manufacturing and procurement to assembly, distribution, and last-mile delivery. Greater visibility enables accurate forecasting and informed decision-making based on historical data.Lower Error RatesAccuracy is crucial for global product distribution, particularly in e-commerce. Automation tools significantly reduce human errors. For instance, picking robots have near-zero error rates, whereas manual warehouse operations can have error rates of 1–3%. Fewer mistakes mean less revenue loss due to mismanaged shipments, damages, or lost items.Ease of ImplementationMany technology solutions are off-the-shelf and require little to no coding. Unlike analogue or manual procedures, which demand extensive experience and time to implement, these tools can be deployed quickly and efficiently.FlexibilityTechnology enhances organisational agility, allowing quick adaptation to dynamic market conditions. Businesses can respond to changing demands, capture new opportunities, and increase market share, revenue, and profitability.Cost EfficiencyWhile some solutions may appear expensive initially, most deliver a high return on investment. Software solutions are cost-effective to implement, and hardware costs are decreasing due to technological advances and widespread adoption. Combined with operational improvements, these tools provide exponential benefits that justify the investment.FAQsHow does IT help in risk management within supply chains?IT enables real-time monitoring of disruptions, predictive analytics for demand fluctuations, and automated alerts for delays, helping companies proactively manage risks.Can cloud-based SCM systems reduce operational costs?Yes, cloud SCM platforms reduce the need for on-premise infrastructure, minimise manual errors, and allow scalable operations, which lowers overall supply chain costs.What role does data analytics play in improving supplier performance?Data analytics tracks supplier KPIs, delivery times, and quality metrics, enabling informed decisions, fostering stronger partnerships, and optimising procurement strategies.How does IT enhance sustainability in supply chains?IT tools optimise routes, reduce excess inventory, and track carbon footprints, helping organisations minimise waste and adopt environmentally friendly practices.Can small businesses benefit from IT in supply chain management?Absolutely. Even SMEs can leverage cloud-based SCM, automation, and analytics to improve inventory control, reduce lead times, and enhance customer satisfaction.

October 30, 2025

RCMC Registration: Step-by-Step Process Explained

The Registration Cum Membership Certificate (RCMC) is a mandatory certificate for exporters in India, confirming their membership with an Export Promotion Council (EPC) or the Federation of Indian Export Organisations (FIEO). It validates that the exporter is authorised to trade specific goods under India’s Foreign Trade Policy (FTP).This registration is essential because it enables exporters to access various benefits, incentives, and government schemes. Without RCMC registration, exporters cannot avail duty exemptions, export subsidies, or participate in global trade promotions through EPCs.In this blog, we will explain what RCMC registration is, including the required documents, applicable fees, and a step-by-step procedure for online registration. This guide will help exporters understand how to obtain RCMC efficiently and stay compliant with the FTP.Why Do Exporters Need RCMC Registration?RCMC registration is important for exporters because it provides legal authorisation to trade under India’s Foreign Trade Policy. It acts as proof that the exporter is registered with a recognised Export Promotion Council or FIEO.One major benefit of RCMC registration is the ability to export or import restricted items, provided proper approval is obtained. Exporters also become eligible for various government incentives and schemes that reduce export costs and improve competitiveness.Through RCMC online registration, exporters can claim benefits under schemes like RoDTEP, RoSCTL, and SEIS. They also gain access to a Letter of Undertaking (LUT) under GST, which enables them to export goods without incurring duties.The certificate helps simplify customs procedures, reduce transaction costs, and ease compliance. Exporters can also trade in multiple product categories without restriction.Additionally, RCMC registration connects exporters with EPCs and Commodity Boards, giving them access to technical support, guidance, and global market opportunities.RCMC Registration Online Process: Step-by-Step GuideIf you are planning to apply, here is a comprehensive explanation of the RCMC registration process, step by step.Step 1: Identify the Relevant Export Promotion Council (EPC)The first step is to find out which EPC, Commodity Board, or Export Development Authority is responsible for your product category. Each restricted product comes under the jurisdiction of a specific council approved by the Directorate General of Foreign Trade (DGFT).Once identified, exporters must apply to the respective authority for their RCMC. This certificate also works as proof of membership and is necessary to avail concessions under the FTP.Step 2: Gather the Documents Required for RCMC RegistrationBefore filling out the RCMC registration form, it is important to prepare all the documents. Exporters must have an active Import Export Code (IEC), an updated IEC profile, and a linked Digital Signature Certificate (DSC) or Aadhaar e-Signature.The complete list of documents required for RCMC registration includes:IEC number issued by the regional licensing authority.Permanent Account Number (PAN) from the competent authority.Memorandum of Association (MOA) for corporate, institutional, or limited companies.Partnership Deed for partnership firms and Individuals.Trust Deed for Trusts and Institutional Entities.Certificate from the Registrar of Companies for registered office change (if applicable).Certified data on foreign exchange earnings for the last three years, issued by a chartered accountant.Board resolution or power of attorney in favour of the signing authority, if not mentioned in the IEC or MOA.GST registration certificate.Step 3: Fill Out the RCMC Registration FormAfter gathering the documents, exporters must fill out the RCMC registration form. This form can be obtained from the respective EPC or completed online via the DGFT portal.Step 4: Submit Letter of Authority for RCMC Registration (If Applicable)In certain cases, exporters may need to provide a letter of authority. This is especially relevant if the application is submitted by someone other than the official signatory of the business.The online submission can be made through DGFT’s e-RCMC portal.Step 5: Pay the RCMC Registration FeesThe RCMC registration fees vary depending on the EPC and the business type (manufacturer, merchant exporter, or service exporter). The fees are generally nominal and are paid directly during the online application.Step 6: Complete RCMC Online Registration on the DGFT PortalThe final step is to complete the RCMC registration process online via the DGFT portal. Exporters must upload scanned copies of all supporting documents, pay the fees, and digitally sign the application.RCMC Registration Fees and ValidityThe RCMC registration fees differ across Export Promotion Councils (EPCs) and Commodity Boards. The amount depends on various factors, including export turnover, product category, MSME status, and the duration of membership. For example, the Federation of Indian Export Organisations (FIEO) charges a one-time admission fee plus an annual term fee, while the Export Promotion Council for Handicrafts (EPCH) follows a fixed annual fee model.The cost ranges from a few thousand to over ten thousand rupees, with an additional 18% GST applied. Exporters should check the respective EPC’s official fee structure before applying. Some councils also offer discounts for multi-year membership payments, making long-term registration more economical.The validity of RCMC registration is usually five years. Exporters must renew their certificate before expiry to continue accessing benefits under the Foreign Trade Policy.Comparison Table: RCMC Registration Fees & Validity (Major EPCs)EPC / CouncilFee Structure HighlightsApprox. FeeEPCH (Export Promotion Council for Handicrafts)Entrance + annual membership (incl. GST).₹8,850 (₹2,500 entrance + ₹5,000 annual + GST)APEDA (Agri & Processed Food Export Authority)Govt. registration + professional fee.~₹9,400 (₹5,900 govt. + ~₹3,500 service)FIEO (Federation of Indian Export Organisations)Entrance/processing and subscription fees vary by category.~₹6,250 for new individual exporter/service provider (higher for Export House).CEPC (Carpet Export Promotion Council)One-time entrance + annual fee (based on turnover).₹2,360 entrance; annual fee ₹2,360–₹11,800 (turnover-based).AEPC (Apparel Export Promotion Council)Entrance + annual fee; MSME reimbursement available.₹10,620 (₹1,180 entrance + ₹9,440 annual, incl. GST).TEXPROCIL (Textile Export Promotion Council)Fees differ for members and registered exporters.Member: ₹20,060; Registered Exporter: ₹10,620 (incl. GST).CAPEXIL (Chemicals & Allied Products Export Promotion Council)Admission + first-year annual fee; MSME discount.Small biz: ₹3,000 admission + ₹1,000 annual; Larger: ₹5,000 admission + ₹14,500 annual (plus GST).Coffee Board of IndiaRegistration + application + service charges.~₹11,999 (incl. ₹5,000 registration + form + professional fees).ESC (Electronics & Computer Software EPC)Annual fee based on export turnover.Starts at ₹10,000 (+ GST) for exports ≤₹10 lakh; higher for larger exporters.GJEPC (Gems & Jewellery EPC)Fee based on export performance + admission fee.₹7,400 – ₹2,00,000 (depending on turnover) + ₹5,000 admission (+ GST).Tea Board of IndiaFees vary; some cite RCMC as free, others charge.~₹4,999 – ₹15,899 (depending on registration type).Note: The fees and validity mentioned above are approximate values. Exporters should always refer to the official EPC or Commodity Board website for the latest fee structure and renewal guidelines.Power Export Growth With WareIQ Beyond RCMC RegistrationOnce exporters complete their RCMC registration, the next challenge is ensuring smooth operations across the supply chain, fulfillment, and compliance. This is where WareIQ, a Y Combinator-backed e-commerce full-stack platform, comes into play. WareIQ enables multi-channel fulfillment across D2C, Marketplaces, Quick Commerce, and B2B channels, helping exporters expand globally with efficiency and scale.Key Solutions Offered by WareIQPan-India Fulfillment NetworkOperates Seller Flex & FAssured compliant centres across 12+ cities, supported by shipping partners delivering to 27,000+ pin codes.Multi-Channel Fulfillment PlatformPlug-and-play integrations with marketplaces (Amazon, Flipkart, Myntra, Nykaa), D2C platforms (Shopify, Magento, WooCommerce), WMS, and ERPs. Exporters can manage fulfillment across distributors, flagship stores, and eCommerce channels with built-in analytics.Inventory LogIQAn AI-driven inventory planning tool that minimises stockouts, automates replenishment, and ensures products are always export-ready.Tech-Enabled Returns QCCaptures and stores high-definition evidence of damaged or missing returned products, reducing disputes and preventing marketplace claims rejections.Seller Enablement & Compliance SupportServices include dedicated account management, APOB/PPOB registrations, GST registration, NDR & COD verification, and more.Seller of Record SolutionAllows exporters to go live rapidly on multiple marketplaces with premium-tier access, simplified operations, and zero compliance risks.FAQsIs RCMC mandatory for all exporters?No, RCMC is mandatory only for exporters seeking benefits under the Foreign Trade Policy (FTP). Voluntary exporters can still apply for access schemes and incentives.Can one exporter hold multiple RCMCs?Yes, an exporter dealing in products across different sectors can obtain multiple RCMCs, each from the relevant Export Promotion Council or Commodity Board.What documents are generally required for RCMC registration?Key documents include an Import Export Code (IEC), company PAN, GST registration, bank certificate, and proof of business premises. Specific requirements may vary by council.How does RCMC help in resolving trade disputes?Many Export Promotion Councils offer mediation and support services to registered members in the event of disputes with international buyers, thereby reducing risks for exporters.

October 29, 2025

E-Commerce Models: Types and How They Work

India’s e-commerce ecosystem is experiencing unprecedented growth, driven by the adoption of UPI, integration with ONDC, the availability of affordable smartphones, and increased rural internet penetration. E-commerce models define how value is created, how transactions flow, and which strategies are most effective in achieving this goal. The impact of e-commerce on business models is evident in the rise of D2C brands, the growing popularity of aggregator apps, and even in government-driven digital transactions.However, regardless of the path a business chooses, whether it’s an inventory-based e-commerce model or a value chain model, fulfillment and logistics are crucial for success. In this blog, we’ll break down five types of e-commerce models, explain how they work, highlight market trends, and share e-commerce models with examples to help you choose the right strategy for your business.Business-to-Consumer (B2C) ModelIn the Business-to-Consumer (B2C) model, businesses sell products or services directly to consumers, bypassing intermediaries such as wholesalers. For example, a clothing brand selling directly to customers online follows this model. Flipkart, Nykaa, and BigBasket are leading B2C players in India.The aggregator model in e-commerce, specifically in the B2C model, involves a platform partnering with multiple service providers or sellers, standardizing their offerings under its brand, and directly connecting them with consumers. Examples include Uber, Zomato, and Swiggy, among others.How It WorksA consumer identifies a need, explores available options, and completes the purchase. In e-commerce models, this process moves online.Consumers browse a website or app, pay digitally or via COD, and receive doorstep delivery.Market Size & TrendsThe global B2C e-commerce market was valued at USD 5.47 trillion in 2023 and is projected to reach USD 17.77 trillion by 2030, growing at a CAGR of 19.1% (2024–2030). Future OutlookB2C will continue to evolve through social commerce, D2C brands, and quick commerce (Q-commerce). With consumers demanding faster delivery, hyperlocal fulfillment, and advanced logistics, this e-commerce model will be at the core of the industry.Business-to-Business (B2B) ModelThe B2B e-commerce model involves businesses selling products or services to other businesses, rather than directly to individual consumers. Examples include SaaS providers offering productivity tools to enterprises or wholesalers supplying retailers. Some examples are: IndiaMART, Udaan, and JioMart.How It WorksIn this B2B model in e-commerce, a company employee or department purchases on behalf of the organization. The buying process is longer and more complex compared to B2CInvolves stages such as awareness, evaluation, engagement, and negotiation before a purchase. Contracts, bulk orders, and custom pricing often define these transactions.Market Size & TrendsThe global business-to-business e-commerce market was valued at USD 18,665.95 billion in 2023 and is expected to reach USD 57,578.97 billion by 2030, at a CAGR of 18.2% (2024–2030).Future OutlookThe B2B e-commerce model is expected to continue growing with the digitization of supply chains, the adoption of AI-driven procurement, and the implementation of seamless payment solutions. Platforms offering bulk B2B fulfillment, such as WareIQ, and those with transparent pricing will dominate the next phase.Consumer-to-Consumer (C2C) ModelThe Consumer-to-Consumer (C2C) model is one of the earliest e-commerce business models, where individual consumers sell goods or services directly to other consumers. In the C2C model, a third-party platform facilitates the exchange of goods and services. Examples include OLX and Meesho.How It WorksA consumer lists a product or service on a C2C platform. Other consumers browse these listings, contact the seller, and complete the transaction through the platform’s payment gateway. The platform earns revenue by charging listing fees, commissions, or transaction charges.Market Size & TrendsThe global consumer-to-consumer e-commerce market was valued at USD 1,789.58 billion in 2023 and is projected to reach USD 7.91 trillion by 2030, at a CAGR of 24.3% (2024–2030).Future OutlookC2C platforms will continue to expand further with the rise of social commerce and recommerce trends. As sustainability gains importance, second-hand and thrift platforms are expected to reshape e-commerce models in India.Consumer-to-Government (C2G) Model The Consumer-to-Government (C2G) model enables digital transactions between individual citizens and government agencies. Citizens act as customers, while the government provides services online. Examples: Income tax and GST payments, Passport Seva applications, driving license renewals, and property tax payments.How It WorksA citizen accesses a government portal or mobile app, selects the service, fills in the required details, and completes a secure payment via credit/debit card, UPI, or digital wallet. The government processes the transaction and issues a digital confirmation or receipt.Future OutlookC2G adoption will expand as digital governance strengthens, offering more services online with seamless payment and verification options, simplifying citizen-government interactions.Business-to-Government (B2G) ModelThe Business-to-Government (B2G) model refers to transactions in which businesses provide goods or services to local, state, or federal government agencies. Office supply firms, IT service providers such as TCS and Wipro, and specialized equipment manufacturers are collaborating with public sector agencies.How It WorksGovernment agencies usually release tenders or requests for proposals (RFPs). Businesses that meet the eligibility criteria participate in the bidding process by submitting proposals and pricing information. The government then reviews submissions and awards contracts to the most suitable vendor.Market Size & TrendsThe Indian government is increasingly digitizing procurement through platforms like the Government e-Marketplace (GeM), where over 60,000 buyers and 5 million sellers are already registered. This has accelerated the adoption of the B2G e-commerce model across various industries, including IT, infrastructure, and defense.Future OutlookWith initiatives like Digital India and GeM, B2G e-commerce is expected to continue expanding, offering greater transparency, faster procurement, and more opportunities for SMEs to engage with the government.Comparison Table of All Models ModelDefinitionHow It WorksExamplesFuture OutlookB2CBusinesses sell directly to consumers.The consumer browses, pays, and receives doorstep delivery.Flipkart, Nykaa, BigBasket, SwiggyGrowth via D2C, social commerce, and quick commerce.B2BBusinesses sell to other businesses.Bulk orders, contracts, and longer buying cycles.IndiaMART, Udaan, JioMartDigitized supply chains, AI-driven procurement.C2CConsumers sell to other consumers.The seller lists, the buyer pays via the platform, and the platform charges fees.OLXRise of recommerce and thrift-driven platforms.C2GCitizens transact with the government online.Pay taxes, bills, fines, or apply for services digitally.Income Tax Portal, GST, Passport SevaMore services to move online under Digital India.B2GBusinesses provide goods/services to the government.The government issues tenders, businesses bid, and contracts are awarded.TCS, Wipro, GeM sellersExpansion via GeM and SME participation.Which Model is Best for You and how WareIQ can HelpThe right e-commerce model depends on your business goals, target customers, and industry.If you’re building a D2C brand, a B2C model with quick, reliable deliveries works best.For wholesalers and distributors, the B2B model enables bulk orders and long-term partnerships.Sellers of pre-owned or thrift products benefit from the C2C model, while digital-first startups can explore B2B2C or aggregator models.Businesses and citizens interacting with the government leverage B2G and C2G models.WareIQ, a Y-Combinator-backed full-stack e-commerce platform, enables brands to scale across D2C, marketplaces, quick commerce, and B2B (general & modern trade) with ease.What WareIQ Offers:Pan-India Fulfillment Network: Seller Flex & FAssured compliant warehouses in 12+ cities, delivering to 27,000+ pin codes.Multi-Channel Fulfillment Platform: Plug-and-play integrations with leading marketplaces (Amazon, Flipkart, Myntra, Nykaa), D2C platforms (Shopify, Magento, WooCommerce), WMS, and ERPs.Smart B2B Fulfillment: From inventory transfers to picking, packing, and last-mile shipping with real-time tracking.Analytics & Visibility: Centralized dashboard to monitor operational performance and optimize costs.By combining a tech-first SaaS platform with an extensive logistics network, WareIQ has become the preferred fulfillment partner for over 400 leading Indian e-commerce brands.FAQsCan a business operate under more than one e-commerce model at the same time?Yes. Many brands use hybrid strategies. For example, a D2C brand (B2C) that also supplies to retailers (B2B) or sells through marketplaces (B2B2C).What role does logistics play across different e-commerce models?Logistics is critical in every model. In B2C and quick commerce, speed of delivery is the most important factor. In B2B, bulk shipping and warehouse efficiency are crucial for success. In C2C, platforms need reliable courier integrations.How do payment systems differ across e-commerce models?B2C and C2C focus on instant digital payments or COD, while B2B often uses credit terms, bulk invoicing, or recurring billing. Government-related models (C2G/B2G) rely on secure gateways, UPI, and compliance-based payment processes.Which e-commerce model is most suitable for startups in India?For most startups, B2C or D2C is the best entry point due to lower barriers, direct customer relationships, and scalability via marketplaces. Over time, startups may expand into B2B or B2B2C once their brand and supply chains mature.What are the common e-commerce revenue models?Common revenue models include commission-based (e.g., Flipkart, Meesho), subscription-based (e.g., Amazon Prime), freemium (e.g., SaaS tools), advertising-based (e.g., OLX, marketplaces), and inventory-based (e.g., brands selling directly).

October 28, 2025

Supply Chain Management vs Procurement: Key Differences

Supply chain management vs procurement: two distinct functions in business operations. Procurement focuses on sourcing and acquiring the goods and services a company needs. Supply chain management (SCM) oversees the entire process of moving these goods from suppliers to end customers. Understanding the difference helps businesses reduce costs, improve efficiency, and prevent disruptions.This blog breaks down the key differences, roles, processes, and metrics of procurement and SCM. You’ll learn how both functions work together and how leveraging them effectively can drive growth and operational success.Understanding Procurement vs Supply ChainProcurement is the process of sourcing and acquiring goods or services required for business operations. It covers identifying needs, evaluating suppliers, negotiating contracts, and ensuring timely delivery. Beyond purchasing, procurement focuses on securing the best value, maintaining strong supplier relationships, and aligning buying decisions with business goals.The supply chain is a broader system that connects raw material suppliers, manufacturers, distributors, logistics partners, warehouses, and other relevant stakeholders. Its role is to ensure that products move seamlessly from production to the end consumer. Procurement and supply chain are therefore closely linked, with procurement acting as one critical part of the entire network.Supply chain management (SCM) is the professional management of this entire system. The role of supply chain management is to improve efficiency, reduce excess inventory, and ensure customer demand is met without disruption. A helpful analogy is that procurement functions like an organ, while SCM operates as the body that keeps everything working together.Scope & Responsibilities Procurement is the entry point of the supply chain, responsible for acquiring the goods and services an organisation needs. Its roles include cost savings, supplier selection, contract negotiation, and ensuring that inputs meet quality and delivery standards. Effective procurement not only reduces costs but also builds strong supplier relationships that support long-term growth.Supply chain management (SCM), on the other hand, has a wider scope. It covers planning, logistics, inventory control, production scheduling, and customer delivery. The role of supply chain management is to ensure products move efficiently from raw material providers to end consumers while balancing cost, speed, and customer satisfaction.Understanding the differences in supply chain management vs procurement helps businesses see how procurement feeds into the larger SCM process.Supply Chain Management vs ProcurementAspectProcurementSupply Chain Management (SCM)DefinitionThe process of sourcing and acquiring goods or services required for business operations.Management of the entire system connecting suppliers, manufacturers, logistics, and customers.ScopeFocuses on acquiring goods/services, supplier selection, contract negotiation, and cost savings.Covers planning, sourcing, production, logistics, inventory, and customer delivery.Key ActivitiesPlanning needs, identifying suppliers, placing orders, expediting, inspecting, and making payments.Forecasting demand, sourcing, manufacturing, delivery, returns, and overall coordination.ObjectiveSecure best value, maintain supplier relationships, and ensure timely delivery.Ensure efficiency, reduce inventory, meet customer demand, and manage end-to-end flow.KPIs / MetricsCompliance rate, supplier defect rate, purchase order accuracy, supplier lead time, and price competitiveness.Cash-to-cash cycle, order cycle time, perfect order index, service rate, supply chain cycle time.ToolsE-procurement platforms (Coupa, SAP Ariba), contract management systems, and supplier portals.Inventory/Warehouse Management, Transportation Management, AI analytics, IoT & blockchain.Processes & Key ActivitiesProcurement Process StepsPlanning & Specifying NeedsDefine the products or services required, their necessary quantities, and the timing of their need, using data and forecasts.Identifying SuppliersResearch vendors, evaluate proposals, and negotiate terms to secure the best value for your organisation.Placing OrdersIssue purchase orders with details such as product specifications, price, and delivery timelines.Expediting & InspectingTrack deliveries, inspect quality and quantity, and resolve discrepancies against the purchase order.Payment & Record-KeepingComplete payments, record transactions, and maintain documentation for audits and reordering.Supply Chain Management (SCM) StepsPlanningForecast demand, balance resources, and align production with customer needs.SourcingSecure reliable suppliers that meet quality standards at competitive prices.ManufacturingConvert raw materials into finished goods through assembly, testing, and packaging.DeliveryManage logistics and distribution to ensure timely and cost-effective product delivery.Returns (Reverse Logistics)Handle product recalls or returns, providing refunds and feedback for improvement.Intersection Point: Procurement ensures the right inputs are sourced, while SCM ensures these inputs move smoothly through production, delivery, and returns. Together, procurement and supply chain management drive efficiency and customer satisfaction.Also check - Sourcing vs Procurement: Understanding Key Differences in the Supply ChainMetrics, KPIs & Success MeasuresProcurement KPIsCompliance Rate: Percentage of purchases made under approved policies.Supplier Defect Rate: Quality issues in supplier deliveries.PO & Invoice Accuracy: Error-free purchase documentation.Rate of Emergency Purchases: Unplanned buys that increase costs.Supplier Lead Time: The time it takes suppliers to fulfil orders.Price Competitiveness: How supplier pricing compares with the market.Supply Chain KPIsCash-to-Cash Cycle Time: Time between supplier payment and customer payment.Customer Order Cycle Time: Days from receiving an order to delivery.Supply Chain Cycle Time: Time to complete an order with zero inventory.Service Rate: Percentage of orders delivered on time.Perfect Order Index: Share of error-free, on-time deliveries.Case Study – WareIQ x Nasher MilesWith WareIQ, Nasher Miles achieved 13 times growth in monthly orders in two years and a 75% drop in per-order shipping costs. WareIQ’s fulfillment platform, multi-warehouse network, and Prime-like delivery badges boosted D2C conversions and expanded marketplace presence, showing how aligned KPIs drive measurable growth.Technology & ToolsWhile procurement tools focus on sourcing and compliance, SCM tools enhance end-to-end visibility and agility.Procurement ToolsE-Procurement Platforms: Automate sourcing, approvals, and purchase orders (e.g., Coupa, SAP Ariba). These tools reduce manual work, ensure compliance, and improve cost savings.Contract Management Systems: Digitally store and monitor supplier contracts, helping reduce risk and improve accountability.Supplier Portals: Centralised platforms where suppliers submit bids, invoices, and updates, enabling transparency and faster decisions.Supply Chain Management (SCM) ToolsInventory & Warehouse Management Systems (WMS): Track stock levels and optimise storage to prevent shortages or overstock. For example, Amazon uses advanced WMS for real-time order fulfillment.Transportation Management Systems (TMS): Plan and optimise delivery routes, lowering costs while improving on-time delivery.Predictive Analytics & AI: Forecast demand, simulate disruptions, and suggest contingency plans. This enhances resilience in volatile markets.IoT Sensors & Blockchain: Improve supply chain visibility and traceability, ensuring goods move securely from source to customer.Emerging Trends & The Future The landscape of procurement and supply chain is being reshaped by three major forces: sustainability, localisation strategies, and AI-driven intelligence.Green ProcurementAccording to the European Commission, Green Public Procurement (GPP) involves acquiring goods and services with reduced environmental impact across their life cycle. This approach is gaining traction globally, with initiatives such as the US Federal Buy Clean Programme and Canada’s low-carbon procurement standards demonstrating how scaling sustainable sourcing drives transformative change. The World Economic Forum highlights that public-private partnerships can accelerate these shifts, ensuring businesses align procurement with broader ESG goals.Nearshoring & ReshoringDisruptions from global crises have exposed vulnerabilities in extended supply chains. Nearshoring moves sourcing closer to demand centres, reducing shipping costs and lead times, while reshoring brings production back home to improve quality control and leverage automation. Companies adopting these strategies are building more resilient and agile supply chains, with the added benefit of reduced carbon footprints.AI & Next-Gen Procurement ToolsAI is evolving from a forecasting tool into a decision-making partner. Large Language Models (LLMs) can analyse supply chain data, explain anomalies, and provide actionable insights (e.g., identifying costly shipping trends). A 2024 Deloitte study reveals that 92% of procurement leaders are exploring GenAI, with investments in automating supplier management, risk identification, and smarter partner evaluation.About WareIQ WareIQ is a Y-Combinator–backed full-stack eCommerce fulfillment platform, built to offer Amazon Prime–like logistics for modern brands. With a pan-India network of Seller Flex and FAssured–compliant fulfillment centres across 12+ cities and last-mile delivery partners covering 27,000+ pin codes, WareIQ ensures fast, reliable, and cost-efficient delivery at scale.The platform provides multi-channel fulfillment services that cater to D2C, Marketplaces, Quick Commerce, and B2B (General Trade & Modern Trade). By combining its robust logistics infrastructure with a powerful SaaS platform, WareIQ enables brands to achieve faster deliveries, reduce costs, and streamline operations.Today, WareIQ is the preferred fulfillment partner for over 400 leading Indian e-commerce and marketplace brands. Its services are designed to help sellers seamlessly manage the stringent requirements of Amazon, Flipkart, and other marketplaces, ensuring no penalties or SLA breaches while maximising growth opportunities.In addition to core fulfillment, WareIQ offers Value-Added Services (VAS) such as order customisation and kitting, empowering brands to deliver a unique and delightful unboxing experience for their customers. With its focus on speed, scale, and customer satisfaction, WareIQ is redefining procurement and supply chain excellence for digital-first brands.Suggested - The Role of Procurement in Supply Chain Management: Strategies for SuccessFAQsWhat is the difference between procurement and supply chain management in terms of focus?Procurement focuses on acquiring the right goods and services at the best value, while supply chain management ensures these inputs flow seamlessly through production, logistics, and delivery to customers.How does technology impact procurement vs. supply chain differently?Procurement tech emphasises supplier management, contract automation, and spend visibility, while supply chain tools focus on demand forecasting, logistics optimisation, and real-time inventory tracking.Why is green procurement becoming important for businesses?Green procurement enables companies to reduce their environmental impact, comply with sustainability regulations, and enhance their brand reputation among eco-conscious customers.How do KPIs in procurement and supply chain align with business goals?Procurement KPIs, such as cost savings and compliance, improve profitability, while supply chain KPIs, including OTIF and inventory turnover, enhance customer satisfaction and resilience.Why are companies shifting to nearshoring and reshoring strategies?Nearshoring and reshoring reduce dependency on distant suppliers, cut shipping costs and lead times, and provide greater control over quality and risks.

October 27, 2025

Marginal Cost vs Average Cost: What’s the Difference?

Understanding marginal cost vs average cost is essential for making the right pricing and production decisions. Both metrics measure cost but serve different purposes, and using them correctly can impact profitability and growth.The average cost (AC) represents the per-unit expense of production by dividing the total cost by the output. Marginal cost (MC) represents the additional cost incurred when producing one more unit of a good or service. Managers and founders need both perspectives to balance short-term and long-term decisions.This guide explains the definitions, formulas, and the relationship between average cost and marginal cost in clear terms. You’ll see how the curves interact, why MC always crosses AC at its minimum, and what that means for decision-making.Definitions: Average Cost & Marginal Cost Average Cost (AC) is the total cost of production divided by the number of units produced.Formula: AC = TC ÷ Q. It shows the per-unit cost a business spends to produce each output.There are three main types: Average Fixed Cost (AFC) is the cost of producing a unit when fixed expenses, such as rent or insurance, are spread over a specified number of units.Average Variable Cost (AVC), which changes with output.Average Total Cost (ATC), which combines both (ATC = AFC + AVC).Marginal Cost (MC), or the marginal cost of production, is the extra expense incurred to produce one additional unit. Formula: MC = ΔTC ÷ ΔQ. Unlike average cost, which reflects overall spending, marginal cost focuses on the incremental change in decision-making that occurs with each additional unit produced.MC depends largely on variable costs such as materials, labor, or utilities. Fixed costs rarely influence it.Understanding the relationship between average cost and marginal cost is critical. AC gives a big-picture view of efficiency, while MC drives short-run production and pricing decisions.Graphical Intuition & the key RelationshipBoth average and marginal cost curves are typically U-shaped. The marginal cost (MC) curve slopes downward at first due to efficiencies, then rises as diminishing returns set in. The average cost (AC) curve initially falls as output spreads fixed costs, then increases when variable costs dominate.The key rule in marginal cost vs average cost is simple:If MC < AC, the average cost decreases.If MC > AC, the average cost increases.MC always intersects AC at its minimum point.This relationship makes sense in business terms. When the cost of producing one more unit is lower than the current average, it pulls the average down. When it’s higher, it pushes the average up.A simple chart of the AC and MC curves illustrates this clearly. In competitive markets, the profit-maximizing output occurs where marginal cost equals marginal revenue (MC = MR). At that point, firms produce efficiently without overshooting demand.Business Applications: When to use MC vs ACThe practical difference between marginal cost vs average cost lies in when managers apply each.Marginal cost (MC) is most valuable for short-run production decisions. It answers questions like: “Should I produce one more unit?” or “Does it make sense to take on this incremental order?” In competitive markets, firms typically set their output where the marginal cost equals the market price. It’s also useful for incremental project evaluation, such as deciding whether a promotional sale covers the extra cost of fulfillment. Managers use MC to guide tactical decisions that depend on the marginal cost of production, not the total average.Average cost (AC), by contrast, works best for long-run and strategic planning. It reflects the overall per-unit expense and is central to full-cost pricing, break-even analysis, and regulatory tariffs. For example, utilities or telecom providers may set prices using average-cost regulation to ensure recovery of both fixed and variable costs. AC helps businesses assess long-term capacity and profitability by combining fixed and variable costs into a single measure.Concrete applications show the distinction clearly:MC use cases include promotional pricing, one-off large orders, or determining whether to continue a production batch.AC use cases include evaluating economies of scale, determining sustainable price floors, and planning facility expansion.Difference Between Average Cost and Marginal CostBasisAverage Cost (AC)Marginal Cost (MC)DefinitionTotal cost divided by total units produced.Extra cost of producing one additional unit.FormulaAC = TC ÷ QMC = ΔTC ÷ ΔQFocusOverall efficiency and per-unit expense.Incremental decision-making for the next unit.ComponentsIncludes both fixed and variable costs (AFC + AVC = ATC).Depends mostly on variable costs in the short run.Curve ShapeU-shaped, minimized when MC = AC.U-shaped, drives the movement of AC.Decision UseBest for long-run planning, pricing, and capacity analysis.Best for short-run production, pricing, and project evaluation.ExamplesBreak-even analysis, regulated pricing, economies of scale.Promotional pricing, one-off large orders, incremental sales decisions.Key RelationshipFalls when MC < AC; rises when MC > AC.Crosses AC at its minimum point.Common Mistakes & Pitfalls Many managers struggle when applying average and marginal cost because the two measures appear similar but serve distinct purposes.A common mistake is treating the average cost as if it were the cost of the next unit. In reality, only the marginal cost of production reflects the expense of producing one more unit.Another pitfall is ignoring fixed costs in long-run planning. Strategies like capacity expansion or pricing for regulation require total cost visibility. Conversely, in short-run decisions, overlooking variable costs can cause businesses to overproduce or misprice.Using average cost to decide on incremental production is also risky. It can make a project look unprofitable even when the marginal cost is lower than the selling price.WareIQ: Balancing Marginal and Average Cost in Modern LogisticsBy spreading fixed warehouse, technology, and infrastructure costs across its pan-India fulfillment network, WareIQ helps brands achieve economies of scale. The result: up to 30% reduction in logistics cost and a consistent 99% on-time shipping rate.Through AI-powered inventory placement and a smart courier engine, WareIQ minimizes the incremental expense of serving each new order. Storing products closer to customers and allocating deliveries to the most efficient courier lowers the marginal cost of production and fulfillment, enabling profitable same-day or next-day delivery. This makes WareIQ a go-to solution for businesses aiming to achieve efficient average cost logistics across regions.When deciding on promotions, flash sales, or scaling into new regions, brands need both views. MC determines if each extra order is profitable, while AC reflects whether long-term logistics partnerships are sustainable. WareIQ’s end-to-end fulfillment solution ensures businesses don’t have to compromise on either.SuggestedCost of Production FormulaHow To Calculate Shipping CostsCarrying Cost FormulaFAQsHow do average and marginal cost influence supply chain decisions?Average cost helps businesses plan long-term logistics partnerships, while marginal cost guides decisions like whether to ship from a closer warehouse or split orders to reduce incremental delivery expense.Can marginal cost ever be lower than variable cost per unit?Yes. If efficiencies like bulk purchasing or optimized routes reduce the cost of an additional unit, the marginal cost can temporarily fall below the current average variable cost.Why do both AC and MC matter for pricing in subscription models?Subscription models (like meal kits or SaaS add-ons) rely on AC to set sustainable monthly fees, but MC helps decide if adding extra perks or bonus units is profitable.What happens if businesses ignore marginal cost in logistics?They risk overcommitting to discounts or bulk orders that cost more to deliver than the revenue earned. This leads to hidden losses even if average costs look stable.How does technology change the AC vs MC trade-off?AI-driven forecasting, automated routing, and smart fulfillment (like WareIQ offers) reduce both AC and MC by optimizing inventory placement and courier allocation in real time.

October 24, 2025

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