Top 10 Best Logistics Companies in India for eCommerce Shipping in 2023
Online shopping has gained massive popularity due to the immense convenience and hassle-free nature that is associated with it. Due to this, there has been a surge in the number of businesses that want to sell their product online but may not have the resources and logistical capabilities to do so independently. This is where eCommerce logistics companies can help by enabling sellers to offload their entire logistical requirements to them. What are eCommerce Logistics Companies? Demand always fuels supply, and as eCommerce firms have rapidly grown into global giants, their requirement for logistics, distribution, inventory handling, and supply-chain management has grown equally. This is where the importance of logistics companies for ecommerce shines through. To support this growing global industry – that works across borders, eCommerce logistics companies have evolved as well. They have grown to become supply-chain partners from merely being providers of last-mile logistics and delivery services. These logistics companies for ecommerce specialise in this type of service are typically called “3PLs”, i.e., third-party logistics providers. When eCommerce firms partner with the logistics companies, they outsource several key functions of their business processes to them, e.g., order fulfillment, inventory management, ecommerce warehousing, order returns, and customer support. The rapid growth of eCommerce platforms has also spawned a whole new world of brands, i.e., D2C (direct-to-consumer) brands. These brands are hugely dependent on collaborating with eCommerce logistics companies to act on their behalf as fulfillment partners since they do not operate any brick-and-mortar stores. Their only connection with their consumers (outside the eCommerce platform for receiving orders) is via such logistics companies for eCommerce. The best logistics providers for eCommerce have flexible and vast operations to service eCommerce businesses of all sizes – and it is your job to select best logistics companies in India that best match your requirements. You would do well to remember that while a good logistics companies for eCommerce will help you manage your supply chain, dropshipping and order fulfillment, the very best ones will help you optimise and improve your supply-chain operations. This enables you to service your customers as best as possiblestay competitivegrow your business profitably [contactus_lilgoodness] What are the Features Offered by Top eCommerce Logistics Companies? As is typical in all industries and ecosystems, the top logistics companies for ecommerce that compete for the best clients and command significant market shares have several key characteristics in common. That is to be expected because these companies have become forces in their respective industries by adopting the best practices, and this is what you must check to see. Given below are four top features that the top best logistics companies in India offer: Tracking facilities The logistics and distribution industry and the vast and complex supply-chain networks they operate have numerous moving parts. The top logistics firms maintain real-time, and 100% visibility across all elements of their operations and are sure to track every movement. Modern-day logistics companies for eCommerce use the latest technologies, tracking systems, and inventory trackers to maintain a holistic and detailed view of their current orders and ongoing deliveries received from various channels. Thus, you have real-time information about your inventory levels and order statuses (completed, delayed, returned and to be fulfilled, etc.) Modern technology The top eCommerce logistics companies are fully equipped with the latest technology by the natural extension of the point above. Their systems are driven by tools like data analytics, Artificial Intelligence, Machine Learning, and cloud software. All these technologies and systems are geared toward reducing the dependence on manual labour and automating cumbersome and time-intensive functions across the entire supply chain network. The good thing is that since all players within this ecosystem (at least the top ones) have adopted modern technology that is adaptable and inter-connected across various stages of the supply-chain network, the entire ecosystem functions at an incredibly high level of efficiency. Users like you can monitor it all from a centralised location. Route-optimisation for improved efficiency Leading eCommerce logistics companies are constantly striving to improve their processes, improve the reliability of their deliveries, reduce costs, and minimise delivery times (etc.). Therefore, they rely heavily on delivery management software for route optimisation. By identifying the “best route” to transport goods from the storage location to the delivery address, they can achieve a cost-effective, efficient, and reliable service. Bear in mind that the “best route” is not the shortest, cheapest, or fastest – but the one that balances out all the numerous elements to come up with the best one. This goes a long way toward improving customer loyalty, a key indicator of a sustainable, prosperous business. Top-notch customer support Satisfied and happy customers are the lifeline of any business. Here too, logistics companies for eCommerce make sure that they treat this as a final metric and operate omnichannel customer support systems. This is especially important today since customer demands have evolved. In the modern hyper-connected era, they want to be kept in the loop at all times and track their parcels across all stages of their journey in real-time (etc.) 10 Important Factors to Consider While Choosing an eCommerce Logistics Company Choosing the correct logistic company for eCommerce is important and must not be made in a hurry. Thorough due diligence is needed since several elements have to be considered when assessing your logistics partner. These range from industry-related points to those that are specific at the company level. Let’s look at the top 10 points to consider while making your decision: Cost of shipping This is a very important metric. As mentioned above, just like the “best route” considers all elements, the shipping cost determines the overall package of your shipper. A low price does not mean your overall shipping cost will be low. Therefore, you must look for the correct balance between price and services. For example, hidden costs such as additional fees for cash orders, add-on services charged separately, or discrepancies in goods tonnage, can result in a much higher overall shipping cost for you even though the rate-card price offered may appear low. Therefore, make a thorough analysis of what service you need and your cost and profit structure, and then assess which eCommerce logistics companies fit your requirements. The number of pin codes reached While a greater number of pin codes your logistics partner serves is always a good thing, you must start with your requirements. If you expect the bulk of your orders to come from a limited number of pin codes, you do not require this. You must first ensure that your logistics partner covers – with efficiency – the areas that you need to service. For example, your customers may live mostly in tier I & II towns versus metros. Therefore, select eCommerce logistics companies accordingly. Real-time visibility Everything in today’s world is now tracked in real-time. Everything is on-demand and instant. Today’s customer is unsatisfied with the good old “your order is out for delivery” – he needs to track his parcel movement in real-time and receive regular updates about its progress. This has become a critical component of creating customer satisfaction, and eCommerce logistics companies must have the power to provide it. For example, GPS-equipped delivery management software helps them to maintain this visibility. Service-level-agreements (SLAs) Given the vast array of services performed by logistics companies for eCommerce, this is a long list. Naturally, these can be core services (e.g. cash delivery, next-day delivery) or other special delivery services, including customised packing, hyper-local, specific time-window based (etc.) Each service has its price tag, terms and conditions of delivery, and rates. Negotiating a package price could work well for you in reducing your shipping costs. But for that, you first need to have a good handle on your requirements such as volume of orders, weight, value, fragility (etc.) Speed Customers, especially eCommerce customers, have rapidly evolved. Fuelled by the super-quick delivery times offered by eCommerce behemoths like Amazon, the consumers now expect this as a standard. Not only that, but they also want options, customisation, and real-time updates. However, speed of delivery – as maintained by your competitors- is something your eCommerce logistics companies must provide. If you cannot keep up, customers will go to your competitors. You should be able to eliminate some options based on delivery speeds and their associated shipping rates. Return-order management Unfortunately, an unavoidable aspect of an online business is the order returns. And while it will never go away completely, the trick is to reduce the number to its bare minimum so that it does not burn a hole in your operational expenses or create unhappy customers. Some eCommerce logistics companies pitch order-return management as part of their core strengths and are experts at managing it – from picking the parcel up to redelivery or refunding. They also efficiently handle other related issues, such as delayed shipments or failed ones. This becomes especially important if you are a large eCommerce firm or are experiencing rapid growth. Infrastructure Using modern-day infrastructures like temperature-controlled delivery trucks or specialised packaging that is hardy and moisture-proof results in fewer goods being damaged while in transit. Choosing a logistics company for eCommerce that offers such facilities may cost more than regular services but depending on the type of products you sell, the distance, and the type of roads they have to be transported over (etc.), this may be a good idea. You will see that your overall cost of operations will be lowered since the cost of breakage, pilferage, and damage during transit will come down significantly. A good track record on this front also helps in reducing your insurance premium, thereby further reducing your costs. Last-Mile Delivery software As mentioned earlier, route optimisation is a cornerstone in the logistics business. If an eCommerce logistics company can optimise the delivery routes by balancing out several elements such as number of deliveries on a route, bunching together similar deliveries of weight, destination, time etc., it results in a much lower cost of operation, including significantly reduced fuel consumption, which is one of the costliest line-items for logistics companies. Thus, not only is your customer happy due to speedy delivery, but you can also offer them competitive shipping rates. Delivery security You may want to offer your customers security and peace of mind with insured and secured deliveries. This has grown to become particularly useful for eCommerce firms and their customers. For example, specialised services like white-glove delivery, a service typically used for special cargo like heavy and bulky (e.g. large furniture sets), fragile, or high-value goods (e.g. expensive large-screen TVs), take very strict precautions while delivering these specialised goods. Customers are happy to pay a premium to ensure their goods are delivered safely, and you make a larger profit while offering your customers a choice of delivery options. It is a win-win for everyone concerned. Past performance While looking for best logistics providers, a starting point in your research should be its past performance scorecard. At the end of the day, it is the performance that matters. A logistics firm may have several important features required for good, solid performance, but it is not of much use if it cannot harness all of them and put them together. For example, they may have poor leadership. Or suffer from labor turnover. Or from union-related problems. Speak to their clients, both current and former, their vendors, suppliers, and value-chain partners. Check online reviews and eCommerce customer forums. You will immediately get a sense of whether they can walk the talk. Since the leading logistics firms have been around for a while, you should not have any problem getting the information you seek. 10 Best Logistics Companies in India for eCommerce in 2023 In 2020, the value of the logistics market in India was pegged at about $220 billion. This is expected to grow at approximately 6% CAGR over the next five years. With a vast geographical spread, limited infrastructure (roads, airports, rail connectivity, etc.), and a widely-dispersed population, logistics companies in India put in a lot of effort to make sure your parcels are being delivered safely and on time. The advent of eCommerce and its increased coverage of pin codes in the country has also meant an improved infrastructure. Several logistics companies for eCommerce, dedicated to fulfilling online orders, now operate 24/7 on a large scale. They use an elaborate network of warehouses, vehicular fleets, employees, modern technology (etc.) to manage their daily tasks. We have enlisted the top 10 best logistics companies in India. The following companies have gained popularity and acclaim due to their speedy deliveries, modern systems, and strong customer service. WareIQEcom ExpressRivigoGatiXpressBeesAramexBlueDartTrackonShadowfaxDotzot WareIQ Source WareIQ is a category-defining, best- in class full-stack eCommerce fulfillment tech platform (with inbuilt inventory planning, order management & shipping system) for modern brands to accelerate online sales/ expedite revenue growth & profits with same/next day delivery. We not only help you reduce your logistic costs but also your delivery timelines – this could be the game-changer your business needs! WareIQ offers centralised tech platform for your entire eCommerce operations ML-based prediction engine for efficient warehouse network design & smart inventory placementCentralised platform for core fulfilment & shipping operationsPost-shipping apps for a delightful experience & zero to minimum supply chain leakages Today, over 300 brands have taken charge of their logistics & fulfillment with WareIQ to unlock tremendous value in terms of revenue and customer satisfaction. WareIQ Rush is their tech platform that provides same day delivery service. Using this platform, WareIQ is aiming to help online sellers offer same day delivery in every major metropolis in India, with a plus 99% fulfillment rate through their network of fulfillment centers and micro fulfillment centers. Suggested Article in India: Top 10 Logistics Companies in Mumbai Ecom Express Source Founded in 2012 by a group of people who collectively have more than 100+ years of experience in the logistics and distribution sector, Ecom Express is an end-to-end technology enabled logistics service company and provides a plethora of eCommerce logistics services and is the best logistics provider in the country. Some of the services it offers are express delivery, fulfillment services, door step compliance and value added services. It serves leading online portals in India.It is a leading choice for companies that deliver high-value parcels since Ecom Express provides additional surveillance security options.It covers approximately 2,400 cities/towns, more than 27,000 pin codes, and 20 states across India and offers a full-coverage model for eCommerce firms.It currently employs more than 36,000 people.Their express delivery service guarantees 72 hours of order fulfillment. It also provides doorstep quality checks for their order-return facility and a 72-hour guarantee for returning the item. Rivigo Source While Rivigo only entered the eCommerce logistics business in 2014, it has quickly risen to the position of one of the most reputed and trusted logistics partners in India. It is a technology company that has emerged as a big player in the sector who's goal is to provide logistical services to a mass audience of eCommerce sellers. Rivigo is seeking to solve a tangible problem of truck driver shortages by using a breakthrough relay model. It employs more than 100,000 people and has 15,000+ delivery partners.It covers more than 4,000 cities in India across 29,000+ pin codes.It has partnered with leading firms like ITC, Maruti Suzuki, Flipkart, and Hero MotoCorp etc.It offers convenient payment options to allow you to choose from COD, UPI, prepaid orders, or payment during delivery.Their API is reputed for superfast delivery. It provides express and hyperlocal services also.It offers tools for crowdsourcing and route-optimisation to cut shipping costs for eCommerce firms.It offers relay trucking, express delivery, specialised security, FTL, LTL, and customs clearance. Gati Source Gati Ltd. is an eCommerce logistics company that is headquartered in Mumbai. It is an established player in this industry, having begun its journey more than four decades ago in 1989. It is one of the oldest logistics firms in India. It provides end-2-end logistics for eCommerce fulfillment. You can choose from the numerous service packages they offer. It offers ground level and air express logistics, supply chain and warehouse management, air freight and e-commerce services. Gati has offices in all major states of India. It lays claim to be the express delivery pioneer in India. It covers 17,000+ pin codes and 99% of states.It offers different services at various price-bundles.It serves a range of industries like B2B, B2C, and C2C.It offers services like heavyweight shipments, express delivery, EPOD (electronic proof-of-delivery), customised packaging, and time-scheduled delivery. It also offers AM-PM delivery, COD, and high-surface cargo. XpressBees Source Founded in 2015, XpressBees has risen to become a major Indian player in the logistics industry. It serves a wide range of industries and products, including pharmaceuticals and heavy-duty machinery. It maintains a wide network of fulfillment centres. It is one of the fastest growing ecommerce logistics companies in India catering to end-to-end supply chain solutions. Since our inception, they have maintained a 100% growth in revenue on a yearly basis. It has more than 100+ distribution centres.Its pin code coverage is 13,000+ kms.It employs more than 30,000 people across 2,800 offices.Solutions it offers include express delivery and cross-border customs clearances. Aramex Source Founded in 1982 and headquartered in Dubai, Aramex is an international delivery, courier service, package delivery, and warehousing company that has grown rapidly since its inception and is a preferred logistics firm in India. It is the first Arab company to be listed on NASDAQ. The company was founded in 1982 in Amman, Jordan. It offers facility management for brands that have their own warehouses.It offers warehousing facilities for smaller firms and MSEs (Medium-Small Enterprises).It offers flexible pricing on large orders (by volume).It offers online tracking for orders and dropshipping facilities BlueDart Source Founded in 1983, BlueDart is an Indian eCommerce logistics and distribution company which provides courier services and is a behemoth in the fulfillment and delivery business and has a huge network in India. It has it's headquarters in Mumbai, Maharashtra. It employs 12,200 people in India and 275,000 people internationally.It covers more than 220 countries all over the world.Its pin code coverage is 35,000+kms in IndiaIt offers special services like giving customers the ability to choose the date and time of delivery (scheduled delivery), COD, customised packaging, EPOD (electronic proof-of-delivery), and express delivery. Trackon Source From its humble beginnings in 2002 with only two locations in Mumbai and Delhi, Trackon has grown rapidly and is among the best logistics providers in India. With nearly two decades of experience, they have a topline of over Rs.240 crores, they are focused mainly in the northern part of India. They also provide services in South Asia. They offer services such as air and surface express cargo, reverse pickup solutions and cash on delivery, Its pin code coverage is 5,000 kmIt has more than 4,000 offices pan-IndiaIt has 10,000 employeesIt covers 47 citiesIts daily consignments are over 2 lakhsServices that it offers include Prime Track (launched in 2010), the flagship premium service for urgent and valuable parcels that ensures quick delivery. A free-pickup service is also offered, in addition to both air and surface modes. Also Check: List of Top 10 Warehousing and Logistics Companies In Delhi NCR Shadowfax Source Founded in 2015, Shadowfax has become one of India's premier 3PL service providers and serves a long list of companies in India and internationally. They have garnered a reputation for their speedy delivery services and can pick up parcels from warehouse locations and marketplaces. Its pin code coverage is 7,000+ kmIt has an employee count of over 150,000 peopleIt offers special services like hyperlocal delivery, COD, on-demand, express delivery, COD, and in-transit storage in the first mile and last mileIt also accepts cashless payments for doorstep deliveries Dotzot Source Launched as the logistic arm of DTDC in 2013, Dotzot says it is the first all-India delivery logistics operator that has focused on eCommerce. They aim to enhance the fulfillment experience for online customers by constantly focusing (and improving) on its processes, technology, and design. It claims to be the first Indian network that offered store pickup, order-return services, and home delivery. Its pin code coverage is 10,000+ kmsIt covers 10 leading Indian cities, has 180 offices and operates 1,000 stores It employs over 8,400 people and collaborates with 10,000 channel partners.It services 1+ million clients through pickup locations or from home pickups.It offers comprehensive order fulfillment services right from parcel pickup, shipping, and tracking through to return-order fulfillment. Conclusion: Should You Partner with eCommerce Logistics Companies? As evident from the above, there should not be any hesitation on the part of eCommerce firms to partner with suitable eCommerce logistics companies to take care of their order fulfillment. However, what is also evident is that you go through robust due diligence. This ensures that you partner up with logistics companies for eCommerce that is most suited to your requirements. As enumerated above, several eCommerce logistics companies offer a variety of services and packages, and it is incumbent upon you to assess these in context with your needs. This is where a company like WareIQ can help. WareIQ has empowered brands to sell more, sell faster & sell everywhere. WareIQ has customised offerings for merchants experiencing different order volumes as well as having different delivery speed expectations. WareIQ is probably one of the very few fulfilment tech companies in the world that have same-day delivery service for their customers under their product “WareIQ RUSH”. The success of your e-commerce business not only depends on your product quality but also on the time it takes to reach your customer. With WareIQ’s real-time data and prompt response times, you can ensure timely deliveries and greater brand reliability. This translates to satisfied customers — the most crucial success metric for DTC brands in a competitive space like India. [signup] You Can Also Check: Find Best Logistics Companies in Surat Best Logistics Companies in India for eCommerce FAQs What is e-commerce logistics?The process of manufacturing, labeling, storing, and eventually delivering a product to a customer’s doorstep once purchased is commonly known as Ecommerce Logistics. Which logistics companies in India are best for ecommerce?• WareIQ • Ecom • Express • Rivigo • Gati • XpressBees • Aramex • BlueDart • Trackon • Shadowfax • Dotzot What are different types of Logistics?• Supply, • Distribution, • Production and • Reverse logistics. How does e-commerce logistics work?Ecommerce logistics and courier companies help online stores with shipping, packaging, and picking. They also provide a variety of different shipping services that might assist a company in expanding and reaching a wider audience. Understanding how end-to-end logistics work is the only way to truly optimize logistics operations. Which logistics does Amazon sellers use?• Shipped by Amazon• WareIQ• BlueDart• FedEx• Delhivery• eCom Express• Aramex• Indian Post Service• Gati
February 07, 2023
Top 10 Best Last Mile Delivery Companies & Startups for eCommerce [Updated List of 2023]
The advent of eCommerce retail has forever changed our lives, and it continues to do so. The convenience of receiving products and services at our doorstep is now an integral part of our lives. However, you would do well to stop and consider that a significant amount of this “convenience” arises from the speed with which our orders reach us. For example, Fulfillment by Amazon's incredible same-day and next-day deliveries has revolutionized the online retail model. Consumer expectations have risen dramatically and continue to do so. We now have hyperlocal delivery and 10-minute groceries – last mile delivery companies are constantly figuring out ways to deliver faster, better, and cheaper and planning new ways for the year 2023. What is Last Mile Delivery? As the name indicates, last mile delivery is the final leg of the journey of a product from the manufacturer to its final destination, i.e., the customer. This logistics cycle has three phases - the first mile, middle, and last mile. The last mile phase starts once parcels are picked up from the warehouse (or fulfillment center) of the final destination and is completed with the successful delivery to the customer. It is executed by last mile companies that pick up the parcel, load it onto a delivery vehicle, and transport it to the customer. The last mile delivery is the most challenging and costly part of an eCommerce shipping network. These last mile companies and their handy teams are forever battling tough weather conditions, road hazards, furious and demanding consumers, supply-chain holdups, and numerous other logistical costs and issues. As you can imagine, all the above challenges operations for last mile delivery companies an extraordinarily complex and challenging task. And don’t forget, this goes on day in, day out, across continents, time zones, tax regimes, governments, and market forces. Therefore, last mile delivery companies for eCommerce firms are a critical cog in the wheel and must be assigned the due importance. Without it, you won’t achieve customer satisfaction – and no business ever survived without happy customers. [contactus_gynoveda] What Services do Last Mile Delivery Companies Offer? Last mile delivery companies offer a host of services and solutions that help eCommerce firms conduct their operations successfully. Let’s look at some of their most popular services: Dynamic routing Route optimization significantly impacts the operations of last mile delivery companies. Efficient routing shortens delivery times, reduces logistics costs, and keeps eCommerce firms competitive by achieving customer satisfaction and happy clients. By using the latest technology-led dynamic routing systems, last mile delivery startups can route and re-route on the go, thereby achieving a high level of efficiency. Automated dispatches By logical extension of the point above, using automated last mile delivery software enables last mile delivery startups to plan, analyze and monitor deliveries via a fully automatic system. This optimizes resource utilization (e.g., fewer drivers, lesser idle times for vehicles), analyzes and solves inefficiencies, and reduces shipping cost. The result is a much more transparent and simplified process. Delivery visibility Modern GPS-enabled last mile software utilized by last mile delivery companies provides fleet managers with complete visibility of the end-to-end delivery process. This results in 100% transparency and equips fleet managers to monitor, course correct, handle emergencies, stay flexible, and exert control over the entire logistics operation. Electronic Proof of Delivery (ePoD) ePOD does away with the cumbersome and time-consuming processes of the old days when signatures, paperwork, lost receipts, forgotten documents (etc.) were an everyday struggle! ePOD enables last mile delivery companies to collect, store, analyze, and extract data and documentation when required. Audit tasks, data sharing, and transaction speeds are also greatly enhanced. Best practices benchmarking Modern tech-enabled logistics systems have greatly improved the insight available to fleet managers, including the planned vs. performance analysis by comparing critical KPIs. Fleet managers now have a holistic view from a centralized window across all operation elements, such as employee performance, customer rankings, the status of delivered or pending parcels, failed deliveries, delayed deliveries, fuel consumption, and 3PL performance. Deep data-analytical capabilities track these KPIs and maintain comprehensive reports to ensure top-notch performance. Flexibility Today’s last mile delivery companies that service eCommerce retailers are nimble organizations while achieving and maintaining the benefits of scale. Their modern last mile delivery systems allow them to offer options such as self-service to customers. This provides options for the customer, but it also reduces the burden on logistics, mitigates costs, and reduces the resources needed. Options like smart lockers at convenient locations are increasingly popular with eCommerce customers today. Crowdsourcing Customers want the convenience of doorstep delivery. However, with the burgeoning growth of eCommerce retail as a business model, it has become difficult for logistics companies to keep up. For example, the number of delivery people and vehicles required to service market demand could often become unsustainable. Therefore, last mile delivery companies in India have turned to crowdsourcing to fortify their operations. These new-age platforms help pair travelers with clients that need parcels delivered in the same localities. Customer satisfaction Like any other business where customer satisfaction is the final metric for running a profitable and sustainable business, the same goes for eCommerce firms. In fact, in the uber-competitive world of online commerce, it assumes greater significance. Therefore, customer satisfaction, customer journey, and experience are invaluable. Last mile delivery companies maintain omnichannel customer support, constantly collect customer feedback for incorporation into their operations, and benchmark against competitor actions and best practices – all of this is key for eCommerce firms and their last mile delivery startups, in achieving and maintaining happy customers. Last mile delivery companies/ startups are constantly adding new services and tracking trends. Some include: Ever-faster deliveries: From same-day and 24-hour deliveries, we are now seeing the arrival of 10-minute groceries and 2-hr deliveries. Micro-fulfillment centers: Smaller satellite warehouses and micro fulfillment centers conveniently located across an elaborate geographical network provide more coverage, lower costs, and faster deliveries. Autonomous vehicles: Autonomous vehicles such as drones and driverless cars are increasingly being tested in logistics and transport. Food, medicines, and light electronic gadgets are some products delivered via these new-age vehicles. Suggested Read: List of Top 3PL 10 Warehousing Companies in India Challenges in Last-Mile Delivery That Can Impact Your Business The last-mile carriers generally work towards delivering the product from an intermediate shipping centre to the final destination. There are a lot of things that can go wrong in this phase that can impact your brand and the overall profits. Some of the major issues businesses can encounter in last-mile delivery include: Return of orders and the rising cost of logistics While order cancellations are common in e-commerce, one of the major reasons for the return of orders by customers can happen due to the mistakes occurring in the last-mile of delivery. Delayed deliveries, inability to track the packages properly, delivery of damaged goods, and misplacing orders- all of them can lead to higher returns. Most of these mishaps can happen due to the negligence of the 3PL partner or the lack of technological capabilities that can prevent these issues. Return of orders increases your logistics cost further. They also affect your market share and customer loyalty. According to a report by KPMG, up to 20% of the total e-commerce shipments are return orders. This shows the scale of the problem and how much costs can be saved by minimizing the same. Return to Origin (RTO) This is another major issue that sellers face. It simply refers to sending back the order to the seller when it cannot be delivered to the customer. This can happen due to wrong addresses mentioned in the order or when the customer is not present/denies accepting the order, etc. Such incidents can lead to additional reshipping costs. Unable to address the rising demand in tier 2 and 3 cities With better internet connectivity, e-commerce demands have been rapidly rising in tier 2 and 3 cities of India. The last-mile delivery in this case presents its own unique challenges. The fulfillment center of your 3PL partner might be far from the delivery location. The interconnectivity between them can affect delivery speeds. Flipkart and Amazon are trying to solve this by partnering with local retail owners and creating pickup points from where customers can collect their orders. Remote locations are even more difficult to handle. Not meeting customer expectations Given the benchmarks that e-commerce giants like Amazon set, customers tend to expect the same elsewhere. They expect fast deliveries and may not care about the complications that can happen in the last mile. For example, harsh weather conditions, or a local lockdown can disrupt the delivery timelines. Customers also expect durability in their deliveries. They seek flexible timings and cheaper costs at their end like Amazon prime free delivery. Such a level of service is almost impossible without optimizing the supply chain in the last-mile. Things to Keep in Mind Before Partnering with a Last Mile Delivery Startup or Company Unless you have a good handle on your business requirements and, what you need from last mile delivery companies, you won’t benefit from the collaboration. On the contrary, it could result in disaster. Consider the points mentioned below as you research and select your last mile delivery startups: Your customer expectationsYour competitors’ delivery times and their last mile delivery startups/companiesThe impact of last mile delivery startups/companies on your shipping aggregators and delivery timesAre last-mile delivery costs sustainable as a percentage of your overall operating cost? Will it prevent you from becoming profitable?The avenues of lowering last mile delivery costs while maintaining efficiency How to Choose a Last Mile Delivery Company that is Right for Your Business? Without dependable and efficient last mile delivery companies, an eCommerce retailer would be severely handicapped. However, with innumerable options available, the onus to make the correct selection is on you, i.e., identifying last mile delivery startups that best match your requirements. Include minute details like holiday lists, working days, shipping limitations, parcel weight restrictions, etc. Given below are 10 leading factors you must consider: Price Quite obviously, this is one of the essential starting points to consider. Last mile delivery companies operate out in the real world, battling the forces of nature, traffic, and several other dangers. Therefore, they charge their clients a fee, often a hefty one, for their value. You must look at your cost-to-benefit ratio, i.e., match their service fees against how important it is for your business. Coverage Last mile delivery companies should cover the critical locations needed for your business operations, i.e., as many pin codes as possible. While you may not need to ship to every location in the country as a new eCommerce firm, it is important to check their coverage. You don’t want to bottleneck your expansion if your company doesn't service those areas. Technology The operations of last mile delivery companies are a complex process with little or no margin for error. Additionally, they work under the severe pressure created by ever-changing dynamics like costs, angry customers, road dangers, weather, and fleet availability. The list is endless. Modern delivery software that is utilized by last mile delivery startups/companies is vastly advanced and manages all the above variables to optimize your last mile operations. They do it with incredible speed and can handle vast scales. Ensure the companies that you are considering, use the latest technology to manage their operations. Order-returns Order returns, reverse logistics, inventory tracking, refunds, and rescheduling deliveries of incomplete or failed orders – all these instances are an unavoidable part of the eCommerce trade. However, if your last mile delivery startups have an efficient order-return management system, it would help to reduce the loss from such situations. Notably, during this process, the consumer tends to be annoyed or apprehensive, and managing it well would help create customer satisfaction. Tracking orders This feature is a leading indicator of changing consumer demands. The old-school thought process of delivery in a week or 5 days are gone. Today’s consumers want to be kept in the loop at every point of their parcel movement. Without real-time and live order-tracking features, you will not succeed as an eCommerce firm. Last mile delivery companies must offer a convenient order-tracking tool for your customers to track their orders. Delivery speed People often confuse the hyperlocal delivery model with last mile delivery. While both traverse the same routes while completing the final distance of their delivery, they aren’t the same. As the name suggests, hyperlocal is a highly localized delivery model and typically offers much shorter delivery times, e.g. 10-minute groceries. Last mile delivery, however, is the last leg of a much longer delivery route. Now, with modern technology and logistics capabilities, last mile delivery companies are also constantly working out on ways to keep reducing their delivery times and increase delivery speed. Customer support Customer satisfaction is the defining aspect of a successful or failed business model. Without happy customers, you won’t have repeat orders or positive word-of-mouth exposure. Therefore, using a modern omnichannel customer setup for eCommerce firms is critical to their success. Payment With a plethora of payment options available these days - ranging from credit cards, digital wallets, UPI, and online transfers – today’s consumers use options that suit their needs the most. From your end, however, if you don’t make all of them available, you will see a high rate of cart abandonment and incomplete transactions. Insurance Buying shipment insurance as a protective cover is an integral part of the supply chain movement. You must conduct research and shortlist last mile delivery companies that offer suitable options via insurance tie-ups for you and your type of cargo. Customer feedback Check to see the comments of current and past customers of last mile delivery companies that you are considering partnering with. Online reviews, forums, and direct opinions are a good way of arriving at a decision. That would reveal a lot about their capabilities and performance. 10 Best Last Mile Delivery Companies/Startups for eCommerce in 2023 WareIQ Source WareIQ is a category-defining, best- in class full-stack eCommerce fulfillment tech platform (with inbuilt inventory planning, order fulfillment & shipping system) for modern brands to accelerate online sales/ expedite revenue growth & profits with same/next-day delivery. How does WareIQ help with last mile deliveries? WareIQ's platform integrates with all major national and regional shipping partnersIt also helps users generate bulk shipping labels & invoices in just a few clicksTo create a premium post-purchase experience, WareIQ also provide the option to users to create a branded tracking page onto which the users can add the logo of their brand and also marketing banners to products from their D2C website, in order to keep their customers engaged even after purchase and open new potential revenue channels The platform also helps in sending auto-alerts to customers about the status of the shipment on channels like Whatsapp, SMS, and Email. With the help of RTO shield, an application that helps in identifying & flagging high-risk customers and consequently disabling COD options for them to reduce the probability of RTO happening, online businesses can also reduce their RTO losses. If RTO occurs, WareIQ covers the forward & reverse logistics costs.eCommerce & D2C brands can also automate cases of failed delivery attempts (NDRs) by the shipping partnerIt also provides information on shipping charges for various shipping partners according to:Base WeightAdditional Weight OffsetWithin CityWithin StateMetro to metroRest of IndiaNorth-east & JKCOD ChargesCOD% You can also opt for WareIQ if you are looking for Cash on Delivery Courier Service Partners. Source FedEx Founded in 1971 in the US, FedEx is one of the leading shipping and logistics giants and needs no introduction. With a global network of fleet vehicles, warehouses, and fulfillment centers, FedEx is a leader in eCommerce supply chain management and logistics and is also emerging as one of the most successful last mile delivery companies. In 2020, FedEx launched its last mile delivery solution specifically tailored for eCommerce firms, thereby launching a formal entry into the space with other companies.It provides cold-chain services.It provides expedited shipping for rush orders and services to handle customs on arrival.It is authorized to transport dangerous items such as electronic parts and lithium batteries.It offers services such as last mile delivery, eCommerce, transportation, cold-chain management, warehouse and inventory management, dangerous goods etc. UPS Source United Parcel Service (UPS) is a global shipping and distribution company that is also one of the leading supply chain and last mile delivery companies, worldwide. It was founded in 1907 in Seattle, United States, and has emerged as a Fortune 500 company. It provides last mile delivery solutions to eCommerce firms across the US and numerous worldwide locations. It transports goods across land and sea. It operates and manages massive warehouses and vast fleets of delivery vehiclesIt started delivering last mile solutions by drawing from USPS's elaborate postal network, called UPS SurePost. However, the company has been looking to launch its last mile delivery services at cheaper rates in recent times.Its website offers a handy shipping-rate calculator. Entering details of your shipment, such as dimensions, customer address, weight, pickup (etc.), gives you an estimate of your shipping rates.It offers packing materials and pallet boxes via its website.It offers services such as freight forwarding, express courier, logistics, etc. Amazon Source Amazon Inc. is a global eCommerce and fulfillment technology company that offers services such as cloud computing, digital streaming, and artificial intelligence. It is also one of the leading last mile delivery companies. It was started in 1994 in Seattle, United States, it penetrated the expanding Indian eCommerce market in 2013. Due to its sheer size, relentless consumer focus, and constant innovation, Amazon is the lead challenger to established players (e.g., FedEx, UPS). Its 3rd-party shipping solution provides cost incentives (e.g., reduced overheads) for 3rd party contractors to start their own logistics firms to fulfill deliveries on behalf of Amazon. It amplifies its inorganic growth via acquisitions, e.g., acquiring PillPack for prescription delivery.Its “Project Wing” operation develops architecture and prototypes for autonomous drones. Its world-famous and industry-defining eCommerce fulfillment service, Amazon Prime includes benefits such as 2-day free shipping, same-day delivery, and guaranteed 1-2 hours of free deliveries via Prime Now.Its crowdsourcing delivery model, Amazon Flex, builds out its last mile and same-day capabilities that deliver orders to customers via Prime Now. This becomes a lucrative option for rideshare drivers who may not be comfortable with strangers or troublesome passengers in their cars. Anyone with a vehicle can become part of this service - if you have a valid driver’s license, car, and smartphone, you can log in to this app and make deliveries based on your availability. Packages can be scanned with a smartphone camera, and directions received via GPS. Convenient cashless payments to a digital wallet are also facilitated. Piggybee Source Starting from a crowd shipping community in Brussels in 2012, Piggybee began by servicing European locations but has grown globally since its inception. The platform enables users to search for travelers and identifies people that could transport their parcels by scanning arrivals/departures in various cities. This is the same way one would look up flights, trains, etc. Travelers/ delivery personnel can also make themselves available for delivery to a particular city/ location by posting their travel details.After a match has been made, the user/traveler can discuss fees. The remuneration doesn’t always have to be monetary; it could also be a swap for transport, accommodation, or other local payback services instead of a monetary fee. Packages can be tracked via the online platform in real-time. After completion, the deliverer can be “tipped” monetarily via Piggybee MoneySafe. A rating system is also provided for feedback. This helps travelers i.e., the deliverer, build a track record for future opportunities, much like how we rank our Uber or Airbnb interactions.Piggybee is often used for delivering cross-border packages worldwide. Hitch Source Hitch is an online delivery marketplace that uses crowdsourcing as its primary business model and allows shipping companies to partner with travelers to get their goods shipped to international locations. It is one of the up-and-coming last-mile delivery startups and one of its core propositions is that it seeks to challenge the shipping industry by utilizing unconventional means to ship cargo from the warehouses to its ultimate location. The platform pairs people with parcels to be delivered (these are the “shippers”) with travelers that are traveling to the same destinations.Shippers upload details of their packages and destinations, while the couriers upload their travel details to see if there are any overlapping requirements. The app uses GPS to optimize routing. Pictures via the traveler’s phone camera are used to provide proof of delivery.Payments are made using Stripe, a 3rd party payment vendor. Users can rank their transactions to provide performance history for future users. Postmates Source Founded in 2011 in San Francisco, Postmates is an urban logistics service that enables on-demand delivery for just about anything for anyone and has revolutionized the way consumers receive local goods, mainly within the hour. Postmates is easily used by installing the app on your phone. It is seeking to become one of the leading last-mile delivery companies. The mobile platform pairs businesses/couriers with customers to facilitate taking orders from local establishments, e.g., restaurants.Customers are paired with local couriers based on the product for delivery against its delivery address.Users can pay per delivery or opt for annual billing. Customized gift cards are also available.Communities are empowered by promoting local shopping and vendors, thereby allowing the ubiquitous small businesses to survive against larger retail chains.Postmates is currently operational in 40 metropolitan areas across the USA. Smartbox Source Smartbox is one of the fastest-growing last mile delivery startups in India that provides convenient and economic packaging units that are transparently priced. The units come in 2 sizes, 10kgs and 25 kgs, and are designed to accommodate a variety of products. Smart lockers are gaining popularity in the field of eCommerce due to the practical advantages they offer. Smart Box also offers a next-day delivery service to most locations in India. Benefits include minimizing the cost of delivery, optimization of logistics, and safety.Order-return logistics are faster with the quick processing of refunds and return order management.Smartbox is part of a new generation of last mile delivery startups in the field of last mile delivery companies. Clients can pick up packages at their convenience. Facilities and safety measures like passwords and private cards enable easy order-tracking in real-time and collection from the locker. Onfleet Source Onfleet is one of the leading last mile delivery companies and is headquartered in San Francisco. It seeks to solve logistics problems in the last mile delivery space. Some of its leading customers include HelloFresh, Kroger, and GAP. It has also been described as “Uber for delivery” by multiple publications. Other services include hyperlocal delivery, online marketplaces, carriers, inventory control systems, and websites. It is a tech-enabled platform that offers real-time tracking, automatic tracking updates and ePOD (electronic-proof-of-delivery)It offers accessible data sharing internally using APIs that enable automated and efficient delivery management. The auto-dispatch system automatically pairs urgent delivery orders with available drivers.It offers services such as route optimization, last mile delivery, logistics services, analytics, dispatch, etc. Matternet Source Founded in 2011 in California, Matternet is one of the leading last mile delivery companies that attempt to solve last mile delivery challenges by changing the mode of travel itself, i.e., by using drones. Matternet produces products that help businesses around the world to build and operate drone logistics networks for transporting deliverables by air. This is achieved using smart drones and pre-defined landing stations via a mobile app and a robust back-end cloud software system.It services the retail, healthcare, and humanitarian sector. As you can imagine, the speedy delivery of medicines via drones prevents traffic congestion and has become a popular option to get medical goods to patients on time.It currently operates in the USA and Switzerland. Conclusion: How Can WareIQ Deliver Much Better Services than the Top Last Mile Delivery Companies in India? Last mile delivery companies in India offer services that are specific to last mile delivery challenges such as delivering goods on time and cutting down on delivery logistics costs. However, some companies, such as WareIQ, provide solutions, not only for last mile delivery, but also the entire suite of fulfillment requirements, thus delivering a much more stellar experience compared to conventional last mile delivery companies. How does WareIQ achieve this? By maintaining a holistic approach to running the business, WareIQ offers cutting-edge services to eCommerce clients. Starting with a good, solid understanding of its business model and, by extension, how they add value to its clients’ businesses, supply chains, and last mile delivery requirements, WareIQ helps clients by offering specifically tailored solutions to their problems. Established in 2019, WareIQ, a Y-combinator backed startup, has rapidly grown to be the leading provider of full-stack eCommerce fulfillment services for some of the most reputed brands in India. WareIQ offers a full-stack platform for eCommerce companies to enable same-day delivery and next day delivery to customers – an Amazon Prime-like experience but accessible to everyone. WareIQ offers last-mile delivery through its shipping partners. It has customised offerings for merchants experiencing different order volumes as well as having different delivery speed expectations. WareIQ is probably one of the very few fulfillment tech companies in the world that have same-day delivery service for their customers under their product “WareIQ RUSH”. With world-class WMS functionalities, WareIQ handles the entire range of intricate operations in the eCommerce fulfillment process, and enables scalability without any hassles. When there is a surge in demand, your enterprise can upscale quickly, similarly, in the case of a slack, downscaling is effortless with WareIQ's fulfillment services. Our pay-as-you-go model allows simplified and flexible scalability. There are no redundant investments or under-utilised resources. With the world evolving as it is, scalability has proved itself to be the make-or-break factor for a large number of e-commerce businesses. At the same time, WareIQ customers realise significant cost savings and wider reach due to better negotiations with shipping partners, strategically placed warehouses, economies of scale and scope in warehousing, and data-driven decision-making. [signup] Last Mile Delivery Companies FAQs (Frequently Asked Questions) What is the meaning of last mile delivery?Last mile delivery is the last step of operations where the product is dispatched from the warehouse and is delivered at the doorstep of the end customer. Does Amazon provide last mile delivery services?The Last Mile personnel assists customers in getting packages from delivery locations to their doorstep. Amazon's Last Mile delivery initiatives have grown over the years, allowing the company to reduce consumer delivery times. What Are The Top Last Mile Delivery Companies?Few of the top last mile delivery companies of 2023 are mentioned below:1. WareIQ2. FedEx3. UPS4. Amazon Shipping5. Blue Dart6. Delhivery7. Ekart What challenges do last mile delivery companies face?• High Cost • Missing delivery timeline due to harsh weather conditions• Bad infrastructure • Customer related Issues like unacceptance of package at doorstep• High returns in case of COD orders• Returns due to unavailability of customer during delivery attempt• Wrong address or contact details How important is it to optimize the last mile delivery process?Last-mile delivery processes must be optimized to ensure timely & faster delivery of products to the end customers & for the business to be more profitable. According to studies, last-mile delivery losses result in a 26 percent annual drop in profits. Companies will continue to lose money unless last-mile delivery is optimized.
February 07, 2023
What is a Fulfillment Center? Top 10 Benefits of Using Fulfillment Warehouse for eCommerce Businesses in 2023
One of the most prominent challenges facing businesses looking to expand into the eCommerce space is identifying where to store inventory and how to implement a strategy to ensure that incoming orders are located, packed and shipped as soon as possible. While many big MNCs have tons of staff to help on this front, small businesses, oftentimes, do not have that same luxury. This is where a fulfillment center would make life tremendously easier for these companies. What is a Fulfillment Center? A fulfillment center forms a critical part of the supply-chain network and executes the entire process of order fulfillment, from receiving an order, locating it in the warehouse and processing it right through to its packing, loading, dispatch and transportation. It acts as a logistical hub, transporting goods from the seller to the customer. Fulfillment centers are used by both 1st party fulfillment services such as Amazon FBA and 3rd party fulfillment services, such as WareIQ. A Fulfillment center works efficiently to deliver orders received by online customers within the stipulated time. In doing so, it manages the fulfillment process on behalf of eCommerce firms which is critical for their success. A fulfillment center is a warehouse or distribution center that is used to store, pick, pack, and ship orders for e-commerce businesses. These centers are essential for the efficient and timely delivery of products to customers, and play a crucial role in the success of e-commerce companies. There are several types of fulfillment centers, each with their own unique features and capabilities. Some centers focus on small, lightweight items that can be easily shipped, while others specialize in handling large or fragile items. Some centers are fully automated, with robots handling the picking and packing of orders, while others rely on human labor. [contactus_lilgoodness] How Does a Fulfillment Center Operate? As mentioned above, a fulfillment center acts as a hub for all logistical activities needed to transport a seller’s goods to their customer – this is referred to as the order fulfillment process. Since numerous factors are involved in fulfilling orders and warehouse management, the minutia is often swept under the carpet and ultimately causes severe problems such as supply-chain bottlenecks.With 3PLs, the inventory is stored in its fulfillment center. Upon receiving an order from a customer, the products are selected, packed and shipped. B2C orders are delivered directly to the customer’s address, while B2B orders (large volumes, mostly) are shipped to large-sized retailers.When a seller outsources its requirements to a 3PL fulfillment company, it can focus on other critical business functions. In contrast, a 3PL handles its inventory and ecommerce logistics, including order-receiving, packing, loading, shipping, negotiating transport rates, reducing fulfillment costs, managing order returns, warehouse management and handling scale efficiently. Top 10 Benefits of Using a Fulfillment Center for eCommerce Businesses Listed below are 10 significant reasons why eCommerce businesses should use a fulfillment center: Ability to Focus on Core Business Although the tasks of order management and shipping are crucial for success, they can be easily outsourced to a 3PL fulfillment center. Not only can clients benefit from the expertise of the 3PL but they now have more time to focus on their core business tasks such as marketing, expanding their product portfolio and refining existing ones, without the burden of having to manage customer orders on their own. Benefit from 3PL Fulfillment Expertise Collaborating with a fulfillment company makes your entire process seamless – they are the experts in the field and outsourcing your inventory storage, packing, loading, dispatch (etc.) helps you gain from their expertise. Logistics and distribution, especially in today’s global markets with complex ecosystems and processes, is a challenging and, often an overwhelming task for any seller. Outsourcing this to 3PL experts that handle these complex processes efficiently on a daily basis, is the correct way to go – your business will gain immensely from their expertise and know-how. Utilize Inventory Outsourcing & Reduce Operating Costs Unless a seller operates a company of some scale, the task of managing an entire warehouse becomes expensive and cumbersome. Outsourcing this task to a fulfillment center is far more efficient. eCommerce firms almost always start small and have limited space e.g. garages, basements etc. Outsourcing your inventory to a fulfillment center helps to reduce operating costs. Online businesses get access to inventory space without any upfront investment in infrastructure. Often, the prudent time to make the shift is also once scale starts kicking in. Benefit From an Increase in Scalability 3PL company and their fulfillment centers are connected with global supply-chain networks and equipped with significant resources to manage scale. With the number of online shoppers only slated to go higher, you benefit from their international expertise and can scale your business globally. With this scale, you can also take advantage of storing your inventory in as many fulfillment centers as you require and can efficiently manage your inventory across all of them using the tools that 3PL companies often provide. Benefit From an Extensive Network of Warehouses 3PLs have an elaborate network of warehouses and fulfillment centers and often follow a hub-n-spoke model. This means they are closely located to your customers. Therefore, the lesser distance your cargo has to travel, the lesser the delivery time and cost. Don’t forget that customers today are bred on super-speed shipping, free shipping and discounted shipping. Access to a larger network of fulfillment centers means that you can strategically store your inventory closer to areas of high demand or near transport hubs for easy shipping. Access to Modern Technology Quite expectedly, 3PL companies that operate fulfillment centers invest big dollars into cutting-edge software systems to improve their efficiency. eCommerce firms benefit from this without the CapEx required or hiring resources to operate it. These advanced software solutions can track and manage inventory across platforms and selling channels, and can automate multiple processes involved in warehouse management to mitigate any errors or miscalculations that could occur. You can also read on warehouse automation technology. Utilization of Economies-of-Scale Fulfillment warehouses operate on a tremendous scale, manage hundreds of clients and work across multiple shippers and transporters. Therefore, they also benefit from economies of scale and can negotiate discounted rates across their operations including packing materials, assets, warehouse space, software and staffing, not to mention shipping rates, which account for up to 70% of fulfillment costs. Access to Bulk Discounts Since 3PLs operate on a global scale, they benefit from it - bulk delivery discounts, zone-based shipping rates and frequent pickups are just some advantages of scale. Additionally, 3PL firms like WareIQ partner with multiple shipping providers and always suggests the fastest and cheapest options so firms can consistently save money on a massive scale. This provides an incentive for firms to partner with 3PL companies and use all the advantages that come with it. Access to Professional Customer Service While customer services is an important aspect of eCommerce retail, sellers can also take advantage of better customer service when they opt for a 3PL fulfillment center. If sellers face any issues, they are just a call, message or email away from getting them resolved. Additionally, many 3PL companies offer outsourcing facilities for customer support so sellers can transfer this enhanced customer support to their customers which will result in increased satisfaction. Access to Customized Packaging eCommerce customers only experience their product when it arrives at their doorstep and a damaged or messy package isn’t going to cut it. Fulfillment centers offer customized packaging solutions that keep packages attractive and fresh - an important element in building customer satisfaction. Sellers can choose how they want their packaging to look and can highlight their brand rather than sending shipments in a bland box or package. Access to Data Analytics Modern logistics management software used by 3PLs tracks, collects and mines data that is generated across the entire fulfillment process. This results in deep insight for managers who can use this as the bedrock for decision-making, thereby leading to more efficient planning and implementation. These tracking facilities are generally available across multiple fulfillment centers and a variety of selling platforms to keep sellers well informed about their inventory at all times. Also read: Hot to choose fulfillment center for E-commerce? Fulfillment Centers vs Warehouses: Differences and Myths Busted There are innate differences between the two and the roles each plays in fulfilling customer orders. While a warehouse simply stores inventory, a fulfillment center manages the process of ordering and delivering products to customers on time to ensure customer satisfaction. Sellers stock their inventory in 3PL fulfillment centers, situated across numerous locations. This reduces delivery times and costs. Long-Term vs. Short-Term Storage The main objective of a fulfillment center is to manage the entire process from customers placing orders till the order is successfully delivered whereas a warehouse is a storage location that is just one piece of the entire gamut of operations that a 3PL conducts. Ideally, inventory should not sit in a fulfillment center for more than 30 days since this is long-term storage and attracts higher storage fees. The seller and 3PL must communicate regularly about stock levels, re-order levels, and maintain appropriate levels of inventory based on the frequency of orders and time taken to reach customers so that out-of-stock problems don’t arise. Range of Operations While a warehouse often remains inactive since it is used primarily for stocking inventory, a fulfillment center provides comprehensive solutions and is constantly abuzz with activity, including: Receiving, packing, loading and dispatching ordersReceiving and stocking inventoryPreparing order documentation and shipping labelsKitting products (if required)Processing order returns Comparatively, activity in a warehouse is limited to receipt and dispatch of inventory. Order Pickup Frequency Since a fulfillment center gets out orders immediately on receipt, they work with several shipping companies so that goods are picked up at least once a day and often more. This ensures order delivery within the time windows promised to the customer. Often, the orders have specified delivery times (e.g. same-day, 24-hr, 2-3 days etc.) and an eCommerce fulfillment center will have various cut-off times based on order details. Warehouses, however, schedule less frequent pickups regardless of the delivery speed specified by the customer since this enables them to stay cost-effective. They also use freight companies that adhere to pre-defined pickup windows. This can often cause delays and is also inflexible. Why Do You Need a Fulfillment Center for Your Business in 2023? It's difficult to provide recent statistics on fulfillment centers for ecommerce, as the industry is constantly evolving and changing. Here are some general statistics that can prove why fulfillment centers are important for your business in 2023: According to a 2021 survey by eMarketer, around 57% of global ecommerce sales were fulfilled through third-party logistics providers, such as fulfillment centers.In 2021, the global fulfillment center market was valued at around $155 billion and is expected to grow at a compound annual growth rate of around 10% through 2026.In the United States, the ecommerce fulfillment market is expected to grow at a compound annual growth rate of around 15% through 2025, driven by the increasing demand for online shopping.According to a 2021 survey by eMarketer, the most popular fulfillment method for ecommerce businesses was shipping orders from their own warehouse (used by 49% of respondents), followed by using a third-party fulfillment center (used by 32% of respondents). Few of the reasons you need an eCommerce fulfillment center are mentioned below: Speedy Delivery Since a fulfillment company works with several shippers, their shipments are picked up at least once daily, ensuring timely deliveries. Complete Automation Modern fulfillment centers use updated technology throughout the fulfillment process so that their ecommerce clients can track order processing, inventory movement (etc.) in real-time. Improved Scalability While scaling up is the goal of every business, its mismanagement can have disastrous results. Today’s fulfillment centers are modern giants with numerous resources that tackle scale comfortably and professionally. Focus Retention Managers in eCommerce firms must focus on strategic tasks that scale the business and maintain profitability e.g. product management, marketing and customer service. Tasks like order fulfillment and inventory handling can be easily outsourced to 3PLs. Best Tips for Inventory Management Using Fulfillment Centers Modern eco-systems and borderless markets exert inordinate pressure on online resellers. 3PL fulfillment warehouses are masters at optimizing inventory management. Some of the best ways you can use them are suggested below: Reduce Costs via Cross-Docking & Wave-Picking Using cross-docking decreases handling as well as storage time and enables firms to manage warehouse inventory seamlessly. Wave-picking is another method of tackling complex shipping systems. Both reduce carrying costs and shipping costs. Stay Atop Your Supply Chain Several glitches can often disrupt an otherwise smooth supply chain. While events are sometimes unavoidable, understanding your supply chain enables you to stay on top of mishaps that sometimes throw things off-kilter. Re-Modify Your Floor Plan Often overlooked due to their simplicity, efficient floor plans are still a proven strategy to increase efficiency. However, supply and demand are forever fluctuating and floor plans should be adapted according to the situation. Minimize Pilferage Employee monitoring and security measures help minimize pilferage, and the results are often highly beneficial. This enables companies to minimise inventory shrinkage and loss due to such incidents which can have a negative impact on the company. Track Product Success Optimized inventory management means you can track sales of each product. Using this data, firms gain insights into their inventory movement. For example, the bestsellers can be stored in places where it is easier to locate, replenish, and ship out. You can follow a similar method to monitor your top clients and their orders. Similarly, you can identify your laggards and minimize their stock levels or even phase them out entirely. Utilize Inventory Management Systems If you are still using legacy inventory software, you are bound to struggle. The modern, automated software systems of today, with their large data-crunching abilities, cloud connectivity, real-time data processing and insight-generation using AI and ML tools, enable you to manage your inventory quickly and efficiently. Minimize Shrinkage Shrinkage is a fancy term for breakage, damage and theft. Select a fulfillment company that offers a zero-shrinkage policy which means that once the fulfillment center confirms and records your products, all items will be accounted for. If products go missing or get damaged on their watch, they have a reimbursement policy. What Are the Top Challenges with Fulfillment Centers and How To Solve Them in 2023? Delayed Shipping With eCommerce behemoths like Amazon increasing customer expectations with their same-day delivery and free shipping, all eCommerce companies are expected to match up. If your warehouse or fulfillment center or your specific business model cannot do so, you risk customer dissatisfaction. Due to capacity constraints and labour shortages, fulfillment centers may struggle to keep up with the increased demand for storage and shipping. Solution: Partner with multiple last mile delivery companies Customers expect fast and reliable shipping, so it's important for fulfillment centers to have multiple shipping carriers and routes available to ensure timely delivery. Regularly reviewing and improving fulfillment processes can help to ensure that orders are accurately and efficiently picked, packed, and shipped, leading to a better customer experience. Limited Locations If your eCommerce company doesn’t have an elaborate network of strategically placed fulfillment centers that minimizes the distance and time taken for deliveries, it will result in extended delivery times. The resulting customer dissatisfaction would be inevitable. Solution: Partner with third-party logistics (3PL) providers Working with a 3PL fulfillment provider can help to alleviate some of the challenges that fulfillment centers face concerning slow delivery or free shipping, as they have a wide network of warehouses and fulfillment centers spread across the country that allows them to store inventory closer to the customes Complicated Fulfillment Software While using modern, automated fulfillment software is a great strength of using a fulfillment center, they can often be complex and intimidating for eCommerce companies to deal with. Poor integration will also confuse and the results are potentially disastrous. Solution: Use a fulfillment software like WareIQ that offers a unified experience WareIQ's smart fulfillment platform allows eCommerce companies to manage all logistics operations directly from a single platform. WareIQ's fulfillment software also provides easy, plug and play integrations with 200+ eCommerce softwares. Quality Control Ensuring that orders are accurately and efficiently picked, packed, and shipped can be challenging, especially for centers with high volumes of orders. Any errors or mistakes can lead to customer dissatisfaction. Solution: Focus on quality control Implementing quality control measures, such as regular training and inspections, can help to reduce errors and mistakes in the fulfillment process. Damaged Goods & Return Inefficiency For eCommerce firms without physical locations, returned or damaged items are received back at their fulfillment center. But, if your fulfillment center doesn’t efficiently manage the order-return process, the costs are tremendous e.g. irate customers, restocking expenses and inventory losses. Solution: Implement returns management processes Developing clear and efficient processes for handling returns can help to streamline the returns process and reduce the burden on fulfillment centers. Labor Shortages Fulfillment centers often rely on large numbers of workers to pick, pack, and ship orders. If there is a shortage of available labor, it can lead to delays and reduced efficiency. Solution: Invest in automation Automation can help to improve efficiency and reduce the reliance on labor, which can help to address capacity constraints and labor shortages. Inept Customer Service We live in uber-competitive times and customer satisfaction is the most important metric in building a sustainable eCommerce business. When you use a fulfillment center, they are typically responsible for your customer service. However, if they don’t handle this efficiently by deploying omni-channel options, you risk aggravating customers. Solution: Improve customer service at fulfillment centers Fulfillment centers should have knowledgeable and helpful customer support teams in place to assist with any issues or concerns. Customers also appreciate being able to track their orders, so it's important for fulfillment centers to provide accurate and up-to-date tracking information. Out-of-Stock Costs While this will probably never go away completely, the trick is to minimize it. If not, your customers will discover other options. If your fulfillment partner doesn’t deploy the best practices in inventory management along with you in projecting demand patterns, your stock-out costs could burn a deep hole in your profits. Solution: Seek out cost-saving opportunities Fulfillment centers can look for ways to reduce costs, such as negotiating better rates with carriers or implementing energy-efficient technologies and also use inventory management software like Inventory LogIQ to reduce out-of-stock and overstocking situations. Security and Loss Prevention Fulfillment centers handle large amounts of inventory, which can make them vulnerable to theft or damage. Implementing security measures and loss prevention strategies can be costly and time-consuming. Solution: Increase security Fulfillment centers can invest in security measures, such as surveillance cameras and secure storage areas, to reduce the risk of theft or damage. You can also keep a look at the challenges faced in eCommerce fulfillment in 2023 here. Conclusion: Why is it in a Business's Best Interest to Partner with a Fulfillment Center in 2023? Ultimately, the benefits are significant for sellers that partner with a fulfillment center to handle their fulfillment. A 3PL becomes your trusted business ally and supports your business growth. The business can then focus more on refining its product and promoting it rather than worry about inventory management and order fulfillment. One such company that provides fulfillment centers and a host of other products is WareIQ. WareIQ, is the leading provider of full-stack eCommerce order fulfillment services for some of the most reputed brands in India. WareIQ offers a full-stack platform for eCommerce companies to enable same-day delivery and next day delivery to customers – an Amazon Prime-like experience but accessible to everyone. WareIQ is one of the very few fulfillment tech companies in the world that have same-day delivery service for their customers under their product “WareIQ RUSH”. With a superior WMS platform, WareIQ handles the entire range of warehouse operations in the eCommerce fulfillment process, ranging from inbound and outbound logistics such as scanning and quality checks, 100% accurate pick and pack, multi-channel inventory management etc. At the same time, WareIQ customers reduce logistics costs and increase shipping speed due to better negotiations with shipping partners, economies of scale, scope in warehousing, strategically placed warehouses and data-driven decision making. WareIQ’s customers save resources that are typically spent on establishing infrastructure. We offer you the flexibility to store inventory in one of several fulfillment centers as per your business needs. Our team’s expertise in logistics and our extensive warehousing network across India enables greater influence during negotiations, resulting in volume discounts for our clients. [signup] Fulfillment Center FAQs (Frequently Asked Questions) What is a fulfillment center?A fulfillment center is a facility similar to a warehouse, where 3PL fulfillment service providers store, process and ship products owned by online & offline retail businesses. They handle the logistics that are required to complete an order to the end customer's door as well as returns. What is the difference between a warehouse & a fulfillment center?A warehouse’s function is only to store products for a longer duration, whereas a fulfillment center's role is to efficiently meet customer shipping expectations starting from storing inventory, packing, shipping, managing returns etc. Does WareIQ have its own fulfillment center?WareIQ has a pan-India network of 40+ fulfillment centers, micro-fulfillment centers, warehouses & urban dark stores located close to customers. Is a fulfillment center capable of handling all types of products?No. If you're selling perishable goods, you'll need a fulfillment center with a cold storage facility. If you're selling heavy-duty tools or industrial equipment to businesses, you'll need a fulfillment center that can meet safety requirements and offer customized packaging. WareIQ provides both cold storage facility & customised packaging to its customers in the food & beverages categories like Epigamia, lil’goodness and much more & in the pharmaceuticals category like Gynoveda. Is a fulfillment center capable of handling a big volume of orders?Yes. A fulfillment center specializes in just that. Fulfillment centers are massive facilities with automated processes and a large, skilled staff to manage the needs of many eCommerce companies. Can we get real-time updates from fulfillment centers?You certainly can! When eCommerce businesses need to provide customers with real-time updates on the status of their orders, they need the fulfillment center and shipping company to do the same. WareIQ has a branded tracking page of its own where the customers get real time updates via mails, messages, whatsapp etc. Can a fulfillment center provide 1-day and 2-day delivery?A fulfillment center is capable of providing 1-day and 2-day delivery as well as even speedier delivery options, as long as the fulfulfillment companies offer these services. Do fulfillment centers handle inventory management?Yes. Most fulfillment centers, such as the ones offered by WareIQ, use advanced Warehouse Management Software (WMS) to provide inventory management and automates many aspects of warehousing processes.
December 22, 2022
Dropshipping vs Order Fulfillment: 5 Key Differences in 2023
In this day and age, where competition in the eCommerce space is rife, online sellers have to do everything in their power to ensure that their customers have an exemplary order-to-delivery experience to ensure they return and have a favourable view of the company. In order to ensure an ultra-smooth delivery process, small to medium-sized businesses can opt between dropshipping vs fulfillment, after analysing their own capabilities and requirements. In this article, we go through the differences and pros and cons of dropshipping vs order fulfillment so that you can make a more informed decision as to what would be right for your business. What is Dropshipping Order Fulfillment? Dropshipping Order Fulfillment is a retail fulfillment process where the buyer (e.g., a retailer or an eCommerce firm) doesn’t store the products they sell. Instead, they purchase the products directly from a third party and ship order directly to the customer that has purchased them, in short they dropship products to direct customers. Therefore, the seller does not directly handle the product. As explained in greater depth below, the greatest difference between Dropshipping and order fulfillment is that the seller does not own, or even stock, any inventory. Instead, it is purchased from a third party (e.g., manufacturer or wholesaler) to fulfill the orders as required. Why does a dropshipper not show up as a stakeholder in the supply chain? The simple answer is that dropshipping order fulfillment is a service and not a role. Additionally, any of the three pillars that typically form the supply chain i.e manufacturer, wholesaler, and retailer, can play the role of a drop shipper. For example, suppose a manufacturer ships its goods directly to your customer. In that case, they are conducting dropshipping on your behalf. A retailer can also offer to do the same on your behalf. However, remember that the competitiveness of the end consumer pricing would depend on who the dropshipper is. Typically, a wholesaler or a manufacturer would hold the advantage here. [contactus_uth] What is an Order Fulfillment Company? Order Fulfillment is defined as the chain of receiving orders, processing them, and delivering those orders to the customer. By extension of the definition above, an Order Fulfillment Company is a third-party firm that executes this process on behalf of its client companies that receive orders directly from its customers. Examples of such clients for an Order Fulfillment Company include an online eCommerce portal or a chain of offline retailers dealing directly with the end customer. The starting point of this process is when a customer places an order, and the order information is delivered to the inventory storage location or a warehouse facility. The line items in the order are located, packed, and dispatched in a timely manner so that it reaches the customer’s doorstep on time, thereby completing the order fulfillment process. In cases of order returns, the return process and transactions are also managed by the Order Fulfillment Company. Although the end customer doesn’t see any of this behind-the-scenes activity, the many parts of executing order fulfillment are crucial in achieving the most critical metric of a successful business, i.e., customer satisfaction. Essential Requirements for Dropshipping vs Order Fulfillment From a Warehouse Quite naturally, each buyer has different needs for their order fulfillment based on their business requirements. Buyers are dependent on their suppliers to provide them with accurate and timely information to enable them to satisfy client expectations. Typical data points and information required include goods and item data, inventory levels, legal and financial documents, shipping details (etc). Some Common Requirements for Electronic Trading of Dropshipping Fulfillment Centers are: To have a setup to receive electronic ordersTo have comprehensive information about products to effectively sell the supplier’s (wholesaler, manufacturer) products onlineTo contain updated information about inventory and stock levelsTo possess the ability to furnish order confirmations, provide ETAsTo be able to manage order cancellationsTo be able to manage varied shipping documentation including packing slips, tags, shipping labels, retailer’s brands, logos, and information about shipment tracking.To be able to handle invoices electronicallyTo be able to handle order returns and manage financial and re-order-related transactions Some Common Requirements for Order Fulfillment to a Warehouse or Storage Facility: To have comprehensive product informationTo receive, acknowledge, manage, and process orders electronicallyTo be able to handle invoices electronically To be able to hand scale and rapidly expand operations as orders increase quickly, manage cyclical peaks, e.g., holiday season orders and promotion-led demand. Dropshipping vs Order Fulfillment Services: Key Differences [table id=6 /] Dropshipping vs Order Fulfillment Services: 4 Tips to Consider Which Option is Best Suited for Your Business in 2023 Determine the Nature of Your Products and Vendors To help you determine whether you should make use of dropshipping vs fulfillment, you should consider the nature of your products and the services offered by your supplier or manufacturer. Not all vendors offer dropshipping services so if yours doesn't provide them, it immediately disqualifies dropshipping as an option. Similarly, if you deal in goods that require special storage facilities such as cold storage facilities, not all fulfillment services would qualify. You need to make this decision based on the types of goods you offer and the requirements you need to store and transport them to the customer in the safest and fastest way possible. Identify Your Customer Base It is in every retailer's best interest to identify their customers and it should be no different for you. Depending on the products you have, the audience that will have interest and eventually convert that interest into a purchase will vary vastly. You need to identify your customer base, which regions they are located in, and which delivery option, whether dropshipping or order fulfillment, would be the best to deliver their orders swiftly and reliably. Shortlist the Technology Needed You, as an eCommerce retailer, need to make use of advanced technology in order to provide the best service to your customers and keep up with your competitors. Whether it is a WMS, advanced transportation systems, or inventory management, you need to determine your needs and which dropshipping or order fulfillment company can meet your requirements. Fulfillment companies are generally better in this regard as they have to keep up with the crowd, but different retailers will have varying technological requirements. Determine Your Profit Margins You need to determine the number of financial resources you have at your disposal. Prices vary when it comes to dropshipping vs order fulfillment, but prices charged by fulfillment companies are generally higher, due to the fees associated with storage, transportation, and technological solutions. Conversely, dropshippers mostly only charge you for the shipping of products that are already sold, so this is convenient if your sales volumes are lower and far between. You need to check how much you are willing to spend and balance it out with your requirements to make the best decision. Dropshipping vs Order Fulfillment Services: Advantages & Limitations Dropshipping vs order fulfillment companies meets different needs of eCommerce sellers. Depending on your business needs – and as they change with time – you could outsource your fulfillment to either, or both types, at different points of your business journey. Remember, one isn’t exclusive to the other, and you can use both simultaneously. For example, 3PL fulfillment centers can be used for stable products and a drop shipper for testing or launching new ones. Advantages of Dropshipping Maintenance of Broader Product Lines You could sell various lines of products with greater choice since you can tie up with numerous drop shippers. Maintaining a wider product line is more feasible since you aren’t purchasing or carrying inventory. Trying New Products Dropshipping allows you to test new products with minimal risks since your financial costs and risks are minimized. You can test out product innovations, logistics innovations, and new trends that could potentially become cash cows of the future. Lower CapEx Needed With drop shipping, the only significant investment is to get your eCommerce portal up and running since you aren’t buying or stocking inventory. This eliminates any significant CapEx needed to get you off the ground. Limitations of Dropshipping Limited Profits Using drop shipping fulfillment companies excludes you from the advantages of bulk discounts since you buy one product, or a limited number of them, in small quantities per order. Limited Control of Inventory Supply With a drop shipper partner, you are dependent on them for inventory. They may distribute their available stock based on preferences that exclude you. For example, during holiday sales, you may not get as much supply as you could potentially sell. Slower, Costlier Shipping You don’t control fulfillment locations or the speed of order processing when you partner with a drop shipping company. Delayed or failed orders could cause severe, even irreversible, damage to your company's reputation. Advantages of Order Fulfillment Centers Maintain Inventory Control Perhaps the most crucial strength of using a 3PL fulfillment company for your business is that you can track your inventory levels closely, eliminate (or at least minimize) out-of-stock opportunity losses, and maintain an optimal mix of product inventory. Get Orders Out Faster Partnering with a 3PL fulfillment company with conveniently located warehouse facilities (both central and satellite) enables your parcels to reach in 2-days (or less) since this is now the delivery standard. This keeps your fulfillment-cycle competitive with industry benchmarks. Storage Cost Becomes a Convenient Variable Expense There isn’t any need to maintain fixed storage space since you can rent out only the amount that you need. This ensures a healthy cost structure for the business. Limitations of Order Fulfillment Centers Limited by Inventory Held You are limited to selling only the inventory you have bought and stored. This burdens you with the risk of unsold inventory, increased carrying costs, sudden obsolescence, etc. Suggested Read: How to reduce Inventory Carrying Cost? Blocked Capital While this business model yields a higher ROI, it also needs a higher CapEx. It also means that your funds stay locked till you can turn it around by liquidating the current inventory. Cost of Damaged Inventory While 3PL fulfillment centers tend to have a 10% allowance for damaged or lost items, you still risk losing money on unusable items. A drop shipper always owns and maintains the stock, and therefore, damaged goods aren’t your liability. What’s the Verdict for Dropshipping vs Fulfillment? Dropshipping vs fulfillment may seem like an easy choice. However, both satisfy different client needs. They should be used judiciously to serve different product lines at different stages of a company's life-cycle and, importantly, should be used in tandem. Both can grow client businesses in different ways. Analyzing your business requirements – adjusted over changing times and scenarios – will enable you to decide on the type of fulfillment service best suited to you. Top 5 Dropshipping Companies WareIQInventory SourceOberloImportifySaleHoo Top 5 Fulfillment Companies WareIQShipBobRakuten Super LogisticsFedEx ExpressFulfillment by Amazon Dropshipping vs Order Fulfillment: Conclusion As is evident, comparing dropshipping vs order fulfillment companies is necessary, not only because they operate on different business models but also offer a different set of advantages and limitations. Depending on your business needs, company, product life-cycle and target customers, you should choose the option best suited for you. WareIQ provides a whole host of products including same-day order fulfillment, warehousing, and everything in between where customers can choose exactly what they need, which proves to be a more cost-effective option. Established in 2019, WareIQ, a Y-combinator backed startup, has rapidly grown to be the leading provider of full-stack eCommerce fulfillment services in India for some of the most reputed brands that spans more than 300 e-commerce brands such as Kama Ayurveda, Future Group, Piramal Group, Wingreens Farms and many more due to the ability to help them accelerate online sales with next day delivery and same day delivery service. WareIQ contributes to client success by not only providing 3rd Party fulfillment but also helping businesses store their inventory closer to their customers using our platform connected to a nationwide network of fulfillment centers and last-mile couriers - billed entirely on usage. We offer a comprehensive centralised platform that assists you in your eCommerce operations. In addition, we also provide an ML-based prediction engine for strategic warehouse network design, smart inventory placement, and integrated shipping apps to offer transparent ETAs, branded tracking experience, RTO risk insurance, and NDR control. We help you not only to reduce your logistic costs but also your delivery timelines – this could be the game-changer for your business needs! [signup] Dropshipping vs Order Fulfillment FAQs (Frequently Asked Questions) What are the top 3 fulfillment methods?• Merchant Fulfillment• Third-party Fulfillment • Dropshipping What should you avoid when dropshipping?• Worrying About Shipping Costs. • Keeping Too Much Faith in Vendors. • Looking for Quick Cash • Making Order Information Difficult to Access. • Not Enough Brand Display. • Not Managing Order Changes and Cancellations Properly• Mishandling Damaged or Lost Items • Return Issues What are some ways to avoid copyright dropshipping?When dropshipping, make sure to avoid any products that imitate protected brands. When you are dropshipping true branded products, you must present an authorization document from the brand supplier, or customs will refuse to let the products pass. Is dropshipping insurance required?To secure both your dropshipping business and yourself, you'll need business insurance. Business insurance is a plus as it helps to ensure that your dropshipping business continues to deliver goods to customers for years to come. Do you have to pay taxes when you drop ship?Yes, dropshipping does require payment of taxes. It's a little off-putting, because dropshipping is supposed to improve revenues. But the truth is if you don't pay taxes, you're putting your company at risk and its reputation at stake. Can I avoid the fulfillment process with an eCommerce fulfillment business?If you choose to start the ecommerce fulfillment route, it doesn't mean you have to spend hours packaging and shipping orders yourself. Various fulfillment service companies and centers are available to handle this for you, just choose a reliable one as it does add up to your overall budget. Dropshipping vs Order Fulfillment: Which one is the more common option for eCommerce retailers?Order fulfillment is generally the more widely adopted option because of the flexibility and additional services involved in it, compared to dropshipping. While each method has its own users, most eCommerce companies opt to partner with 3PL companies.
July 07, 2022
10 Best 3PL for Small Business in India in 2023
Large e-commerce companies have been enjoying the privilege of having 3PL or Third-Party Logistics companies as partners to take care of the logistics of their products, and that has helped them to focus on their core function of sales and marketing to expand their businesses. However, having the best 3PL for small businesses as partners is still a constraint for most e-commerce businesses, especially for those which are at the early stage of their growth journey. Small e-commerce businesses have been doing all their logistics by themselves owing to limited resources available at their disposal, and as such, they have been facing serious difficulties in matching the price and delivery timelines of large e-commerce businesses. Having understood this ground reality, more and more small e-commerce businesses are looking out for the best 3PL small business partners to improve their logistics framework and remain competitive in the growing market of e-commerce. What are 3PL companies? Order fulfilment is an essential and integral part of the operations of any e-commerce business. As the business grows, it may become very difficult for an eCommerce business owner to fulfil customer orders with in-house resources. 3PL or Third-Party Logistics companies act as eCommerce order fulfilment agencies for e-commerce businesses. Therefore, 3PL companies can effectively provide third-party logistics in supply chain management. They provide comprehensive ecommerce logistics services needed by e-commerce businesses to meet their commitments to their customers. 3PL companies help their e-commerce clients to focus on sales and orders received from customers through online platforms, while they take care of all the logistics operations required for the safe and timely delivery of products to customers. A 3PL company handles functions like warehousing and storage, inventory management, transportation, distribution, delivery to customers, and reverse logistics in case of rejection/return by customers and customer support 3PL fulfillment companies bring many benefits to their e-commerce clients. First and foremost, by engaging services of 3PL companies, e-commerce businesses are not required to make huge investments in infrastructures such as ecommerce warehouses, transport vehicles, and manpower among other things. A 3PL company with expertise in documentation, national and international markets, mandatory compliance, and regulations adds a lot of value in terms of reducing costly delays and cycle time. Logistics is a non-core function for an e-commerce business owner. The 3PL company helps the e-commerce business owner to focus on his core competency to manage and scale-up business instead of getting caught up in nuances of logistics management. Outsourcing of logistics to third-party also gives the flexibility to utilise services from 3PL companies based on business demand and needs. Above all, 3PL partners help improve customer satisfaction through efficient response time and timely deliveries. [contactus_gynoveda] What is the Significance of 3PL companies for Small Businesses? In today’s competitive business environment, specialisation is the key to the growth of a business enterprise. Executing all business functions in-house may not be possible without compromising on the performance of the core business activity. Outsourcing certain critical business functions to an experienced operator can be a good strategy for business growth. While large e-commerce companies are already outsourcing their logistics and order fulfilment activities to 3PL companies, small businesses are also now increasingly inclined to do the same to take advantage of the benefits that 3PL companies bring to their businesses. It may seem like a big step for a small business, but it helps small business owners to stay ahead of their competitors. Optimisation of logistics functions can entail considerable savings by reducing wastage and helping the business to improve its bottom line. A 3PL company with multiple customers creates extensive infrastructure for warehouse management and inventory management. However, small business owners need to pay only for what they use, and thus, they are insulated from fluctuating warehousing requirements and associated rates. Normally, a good 3PL company will be equipped with good technology and analytical tools to provide total visibility and transparency of its operations. It adds to the user-experience of small business owners by helping them track the journey of their products till they are delivered to the customers. Many small businesses do not have facilities or infrastructure to manage multiple functions under one roof. 3PL companies, on the other hand, offer many value-added services to ensure smooth operation. Timely delivery at a competitive cost is the biggest challenge for any e-commerce company today. The challenge becomes more demanding for small businesses as they have to compete with big e-commerce companies who have gained expertise in delivering a product to a customer at the most competitive price and within the tightest timelines. Top Expectations from 3PL Companies for Small Business Small businesses often manage their order fulfillment exercise in-house. It is manageable as long as the volumes are small. However, as the volume of orders increases, small businesses find it difficult to manage multiple activities due to limited resources and infrastructure. This is when they require the services of a 3PL company to handle their warehousing and order fulfilment requirements. While fulfilment exercise is labour-intensive, infrastructure needs are costly. 3PL companies for small businesses, which already have infrastructure and manpower in place, can easily help small businesses to meet their order fulfilment obligations. Small businesses have many expectations from 3PL companies. However, the following expectations top the list: PackagingShipmentInventory Management Regular FeedbackReverse Logistics Packaging plays an important part in giving customers a satisfactory e-commerce experience. Customers like their products to be delivered without any pilferage or damage during transit. 3PL companies for small businesses, with requisite expertise in packaging, make sure that it is done with appropriate materials, dimensions, and designs to protect products to satisfy the customers. Shipment is a critical process in a supply chain as the efficiency of this process determines the timeline for delivery of the product to the customer. The companies are expected to choose the best and the most cost-efficient shipping option for each order so that it reaches the customer in the expected time frame. The 3PL companies for small businesses are expected to manage the inventories with regular reporting on stock levels and issue alerts whenever stocks go below-predetermined levels. The best 3PL for small businesses is also expected to provide specialised storage and inventory services for perishable goods so that product owners can withdraw expired products from the inventory well in time. The 3PL companies for small businesses are expected to maintain total visibility in their operations for business owners by the use of technology and regular feedback. Any order fulfilment exercise is not complete till the product is accepted by the customer. In case the customer wants to return the product, 3PL companies are expected to efficiently manage the reverse logistics so that the product is safely returned to the product owner. How do 3PL companies differ from 4PL companies? [table id=8 /] 10 Best 3PL For Small Business in India in 2023 StockareaEkart LogisticsIndia PostBlue Dart ExpressDTDC ExpressEcom ExpressShadowfaxTCI ExpressDelhiveryGATI With the exponential growth of e-commerce in India, the need for 3PL companies for small business has also grown dramatically, and even small e-commerce businesses are now having the luxury of picking up the best 3PL companies that meet their specific requirements. We have presented here the list of 10 best 3PL for small businesses for 2023 based on their cost structure, pin code reach, visibility, terms of service, market share and quality of service. Stockarea Source The company specialises in Digital Warehousing with a wide range of automated tasks related to Fulfillment, Bonded, General warehousing, Cold Storage, Freight and other logistics-related functions. Stockarea has a presence in practically every major city in India with 100+ warehouses in its network. One of the deep pockets of Stockarea is in the storage and transportation of perishable items (via its intricate, well-positioned network of cold-chain facilities) and heavy equipment (considerable care is taken and technical instructions are strictly adhered to in the process of handling). The company provides discounted quotations to the customers from its carrier partners for all types of freight - be it Less-than Truck-Load, Full Truck-Load or Last Mile Delivery. While Stockarea reduces the hassles of documentation on behalf of its customers, such as FSSAI Certifications (for storage and movement of food items), accreditations from BIS, CWC, FCI etc., customers are charged a considerable premium for such value added services. However, these value added services have helped Stockarea establish itself as one of the preferred 3PL companies for small businesses. Ekart Logistics Source Ekart Logistics began its operations in 2009 as the in-house supply chain arm of Flipkart. The company provides end-to-end fulfillment solutions to a multitude of e-commerce businesses, ranging from hassle-free order pickups, multi-mode payment collections for COD orders, first mile and last mile coverage and effective handling of order returns. Ekart Logistics has become one of the most popular 3PL small business partners in India because of their deep penetration into Tier-2 and Tier-3 cities and remote villages, seamless API based integration with eCommerce platforms, low rate per consignment, express deliveries and efficient reverse logistics. Ekart has also improved its communication systems over time to enable businesses to share the live status of the consignments with their respective customers via SMS, email etc. India Post Source Although the adoption rate of India Post as a 3PL small business partner among small businesses is slow, India Post offers three promising services to match the logistics and fulfillment requirements of small businesses precisely: Business Post - This is meant for very small items such as stationery, gift cards etc. and is usually the most affordable alternative for delivery to customers located in any part of India. Business Post centres are conveniently located in major cities and can also be established on request at the small business or company's request if monthly order volumes are satisfactory.Logistics Post - Under this scheme, India Post integrates features such as LTL & FTL services, Logistics Post Centres for collection of consignments, Multi-modal transport, Warehousing Services, Fulfillment services and Reverse Logistics.Media Post - This is a fairly new concept introduced into the Indian market and will enable small businesses to penetrate into the less tech-savvy segments in villages and remote areas with physical promotional materials like flyers, catalogues etc. The biggest advantage of India Post is its regulated pricing due to Governmental control and logistics experience of more than five decades. It is a popular choice among small businesses serving customers at remote locations where other 3PL players charge exorbitant prices or often do not deliver. Blue Dart Express Source Blue Dart Express Ltd. is a part of the DPDHL Group's Post-eCommerce-Parcel (PeP) division and hence has access to a giant logistics network and infrastructure across the globe. The company serves more than 36000 pin codes in India and enjoys tremendous popularity among customers for its reliability, experience, and sustainability. Blue Dart has established itself as a 3PL small business leader in the domestic and international air express services, providing the entire spectrum of logistics solutions including repair and return, strategic inventory management and direct express inventory distribution. For small businesses and eCommerce enterprises, Blue Dart has launched Smart Box - Air Express and Small Box - Ground Express, which are convenient and affordable packaging units for speedy and reliable delivery to end customers. Blue Dart has also developed multiple tech-enabled platforms, which the company refers to as E-shipping Tools, to better coordinate shipping management services for small businesses. DTDC Express Source Founded in 1990, it currently caters to over 10000 customers across 17500 pin codes and 430 operating facilities across India with easy accessibility for small Indian businesses. Apart from its Domestic Division which largely handles a large variety of orders, DTDC has established a dedicated Retail Division SBU that caters to the fast-changing requirements of D2C eCommerce brands and small businesses, with economical and customised offerings. DTDC specialises in handling a wide variety of goods including high-value goods, heavyweight goods, and even hazardous materials. On the tech-front, it has pioneered in the introduction of high-tech solutions such as Image-scan of Proof Of Delivery (POD) on the web, Logistics and Warehouse Management applications, Mobile-based instant delivery update etc., which help small businesses minimise delivery-related risks while satisfying end-customers. However, DTDC's prices for certain categories are perceived by small businesses as slightly on the higher side compared to those of its competitors. Ecom Express Source Established in 2012 and headquartered in Gurugram, Ecom Express pursued a business centred around customer-centricity, scalability and sustainability. The company uses latest technology and automated solutions to provide first-mile pickup, processing, network optimization and last mile delivery to a customer base spread across multiple business-sectors. The company has two offerings - Ecom Express Services (targeted as medium and small businesses, including D2C eCommerce enterprises) and Ecom Ground Services (targeted at larger enterprises and eCommerce brands for bulky medium-weight products such as furniture, appliances etc.). Both these offerings are equipped with provisions for QC-enabled reverse logistics. Ecom Express also provides value added services such as Try & Buy, Switch Deliveries and Valuable Goods Handling, which lets it price its services with a premium. Shadowfax Source The company specialises in low-cost hyperlocal deliveries within 30 minutes with API integration and live tracking and therefore can add lot of value to logistics needs of small businesses. It provides fulfillment and logistics services for eCommerce companies and Quick Commerce brands with its feature-rich technology and a closely-knit network of delivery executives, thereby leveraging both the Brand Advantage and Rider Advantage. For small businesses, Shadowfax enables Marketplace & warehouse pick-ups, End-to-end shipment tracking, COD/UPI doorstep payments on the Forward Logistics front and Air/surface transportation, Seller & warehouse pick-ups, Single integration for all deliveries on the Reverse Logistics front. Live imaging for quality check and instant refund issues to customer help small businesses keep their end customers satisfied while minimising risks of fraud. These tech features have enabled Shadowfax to make its mark among the top 3PL companies for small business. TCI Express Source It is a division of the Transport Corporation of India (TCI). While TCI Express specialises in cold chain (for perishable items) and bulky materials transport, it has a variety of offerings for small businesses as well. These include Surface Express, Domestic Air Express, Rail Express and Ecommerce Express. With 28 sorting stations, 51 air gateways and other allied infrastructure, TCI Express serve 40,000+ locations covering 7500 districts across India. The biggest strength of the company as a 3PL small business service provider lies in its completely owned network infrastructure such as warehouses, GPS enabled vehicles, packaging facilities etc., which provides it the flexibility to stretch to the best possible limits to delight customers and become a trusted 3PL small business partner. Delhivery Source Delhivery is a key player in the Indian small business order fulfillment sector. With 70+ fulfillment centres around the country, having a total storage and processing space of over 6 million square feet, it serves over 6000 small businesses across India. All the major demand channels and courier partners are integrated with their own warehouse management system. Delhivery is equipped to support efficient multi-tenant, multi-location warehousing, allowing small businesses to expand operations across India rapidly and flexibly with no fixed expenses. By combining warehousing and freight solutions, Delhivery can provide small businesses with integrated distribution solutions. This allows Delhivery to be one of the best 3PL for small business customers with quick and cost-effective offline delivery. Their services include: Same-day/Next-day DeliveryTime-defined/Slot-based DeliveryPerson Specific/Address Specific DeliveryReturns ManagementProduct Replacement/Exchange ServicesLarge/Oversize Order DeliveryHigh-value Product DeliveryHAZMAT/Dangerous Goods DeliveryReal-time Monitoring and ControlConsignee Address ValidationFraud DetectionFlexible Payment on Delivery GATI Source Founded in 1989, it is one of the leading express distribution and supply chain management firms in India, dedicated to providing smooth and end-to-end solutions to customers, supported by cutting-edge digital tools and technology. It has world-class warehouses and fulfilment centres at strategic locations around the country. Gati helps small businesses in their fulfillment endeavour with its Surface Lite and Premium Flexilite offerings. Gati has also developed a unique niche in its customer base by being a 3PL small business partner for firms selling Art Products (fragile and antique items such as sculptures, canvas paintings, pottery etc) with its premium offering, Art Express. It has capabilities for handling all logistics-related documentation on behalf of the small business owners, thereby helping them focus on their core business. 5 Factors to be Considered for Choosing the Right 3PL Small Business Partner Small businesses aspiring to scale up their businesses can derive a range of benefits by partnering with the right 3PL companies. The challenge is to identify which 3PL partner is best suited to fulfil the specific needs of the business owner. Several factors are considered for selecting the right 3PL company. However, the following five factors are the most important factors considered by business owners while finalising 3PL service providers: Experience & Track Record: It is very important to know about the business experience and track record of a 3PL company concerning its performance and relationship with its principal stakeholders like customers and employees. The 3PL company should be reliable in terms of financial stability, and business ethics and should have a proven track record of handling disruptions. Customer Service: The service provider should have an exclusive and sustainable customer service mechanism in place that is professional and responsive to customer needs and grievances. The service provider needs to have robust warehousing and inventory management facility to ensure safe storage and delivery of the consignments and also for the safe return of consignments in case of non-acceptance by the customers. Flexibility & Cost: The service provider needs to have the ability to be flexible in scaling up operations as per business demands and provide services at a competitive cost by optimising its resources. Geographical Locations: The 3PL company should have a network of fulfilment centers to serve customers across the country and across the world to reduce last-mile delivery costs by maximising delivery speed and efficiency. Technology & Integration: The service provider should have access to the latest logistics software that is user-friendly and can be easily integrated with systems on different technology platforms for real-time information gathering and updates. Demerits of 3PL Companies for Small Business As we have seen so far, there are many merits of 3PL companies for small businesses. However, 3PL companies also bring some demerits for business owners, and they need to be considered while engaging 3PL service providers. Loss of Control Over Goods: The biggest demerit is that the business owner does not have control over the process of delivery of his products to his customers as the whole process is independently handled by the 3PL company. The business owner can only check inventory levels, incoming shipments, and deliveries in real-time by co-ordinating with the 3PL service provider.Finding a Trustworthy 3PL Service Provider: The growth of e-commerce in India has given rise to mushrooming of many 3PL service providers, and many of them may not be of the desired level of competency that is expected of a 3PL service provider. In such a situation, it is difficult to choose the right 3PL partner, and it can be a stressful exercise as the wrong 3PL partner can do a lot of damage to the business.Impact of Bad Service On Business: Despite engaging a 3PL small business service provider, the business owner is solely accountable to his customers for the service provided by the 3PL service provider, and therefore bad service by the 3PL service provider can adversely impact the business of the business owner. Why Should You Choose WareIQ as 3PL Partner in 2023? While most of the 3PL companies for small businesses that we have discussed so far, take care of only the logistics operations, WareIQ offers a full-stack platform that integrates a series of operations essential for fulfillment, such as warehousing, an easily integrable tech platform for centralised monitoring, last-mile delivery/ 3PL and post-shipping experience. So, if your small business is facing numerous problems on the fulfillment front, you should seriously consider outsourcing fulfillment, and choosing WareIQ as your partner can help you save both time and money. Established in 2019, WareIQ, a Y-combinator backed startup, has rapidly grown to be the leading provider of full-stack eCommerce order fulfillment tech solutions for some of the most reputed brands in India. WareIQ offers a full-stack platform for eCommerce companies to enable same day delivery and next day delivery to customers – an Amazon Prime-like experience but accessible to everyone. WareIQ has empowered brands to sell more, sell faster & sell everywhere due to the: Access to WareIQ’s strong nationwide network of fulfillment centers & urban dark stores near their customersAccess to all major national & hyperlocal last mile couriers at discounted rates for making same/next day deliveries possibleEasy integration across multiple online platforms & marketplacesHorizontal marketplaces: Flipkart, Amazon etc.Vertical marketplaces: Nykaa, Myntra etc.D2C platforms: Shopify, Magento, WooCommerce etc.Social commerce platforms: BikayiAccess to a superior centralised tech platform for eCommerce operationsML-based prediction engine for efficient warehouse network design & smart inventory placementCentralised platform for core fulfilment & shipping operationsPost-shipping apps for delightful experience & zero to minimum supply chain leakages (Branded tracking page with smart marketing placements; Trigger-based updates & smart communication platform) WareIQ has customised offerings for merchants experiencing different order volumes as well as having different delivery speed expectations. WareIQ is probably one of the very few fulfillment tech companies in the world that have same day delivery offering for their customers under their product “WareIQ RUSH”. With world-class WMS functionalities, WareIQ handles the entire range of intricate operations in the eCommerce fulfilment process, ranging from Inbound Operations such as scanning and quality check, through 100% accurate Pick and Pack, to Inventory Management across all channels. WareIQ’s next day delivery and same day delivery services are helping eCommerce businesses set new standards with respect to setting customer expectations and fulfilling them with high efficacy. At the same time, WareIQ customers realize significant cost savings and wider reach due to better negotiations with shipping partners, strategically placed warehouses, economies of scale and scope in warehousing, and data-driven decision making. WareIQ’s WMS, a centralised tech platform, is its core offering, with the following functionalities: Shipping Management Integration to all major national couriers and same-day courier partners through WareIQ platform with discounted ratesGeneration of bulk shipping labels & invoices in a few clicksOffering a branded tracking page and sending auto-alerts to inform customers of their shipment statusReduction in RTO % (Return to origin) by automating cases of failed delivery attempts (NDRs) by the shipping partnerPreemption of COD frauds through integrated AI engine flagging risky ordersOrders managementTracking of orders across the channels Filtering of orders by statusSearching for specific ordersA quick timeline view of where the order is in the fulfillment process (e.g. when an order is picked, packed, or shipped)Shipping-related information (e.g., weights, dimensions, or carrier service) A quick snapshot of any orders that require actionSyncing WareIQ’s out-of-the-box integrations with sales channels to eliminate manual importing of data and trigger all the necessary notifications to the end-customersInventory managementTracking of inventory levels across multiple locations & sales channels – the website and marketplacesUsing WareIQ platform to distribute inventory to multiple locations optimizing for speed & cost/orderSetting reminders to proactively replenish inventory, bundle products for promotions, make inventory transfer requests, and much moreWarehouse managementManaging multiple warehouses and offline stores on WareIQ platform100% inventory accuracy with scan-based operationsAutomated reconciliation tool helps to keep track of returns and unsettled invoicesIntegrations with all major ERP & Accounting systemsFulfilled By Amazon and Prime StatusAssured tag on Flipkart without physically dedicating inventory to them The central platform helps to better manage undelivered orders by reducing NDR processing time by 12 hours – a multifunctional NDR dashboard helps to track and take immediate action for undelivered orders in real-time, thereby reducing RTO by up to 10%. Automatic replenishment recommendations and easy purchase order creation capabilities on the WareIQ platform further empower eCommerce companies to leverage all possible ways of increasing their ROI. Best 3PL for Small Business FAQs (Frequently Asked Questions) What are the three types of 3pl company? • Asset Based• Management Based• Integrated Providers What are the benefits of a 3PL provider for small business? • Time Efficient• Drive Cost Savings• Ensures Good Customer Service• Gains Flexibility and Scalability• Enables Business Growth and Market Expansion How does 3PL charge money?3PL procurement companies either charge per-project fees or account retainer fees depending on the complexity and frequency of business needs. What is 3PL procurement?Third Party Logistics Services, also known as 3PL are anything that involves management of one or more aspects of procurement and fulfillment activities. In the ecommerce business, 3PL refers to any service contract that involves storing or shipment of goods.
May 28, 2022
10 Best Small Business Fulfillment Companies In 2023
The e-commerce industry is experiencing the same surreal growth as the Indian economy as a whole. Small businesses fulfillment companies have arrived to help them flourish, as they have tended to be the slowest to adopt the growing trend of online ordering and fulfillment. Many of them lack the necessary finances and resources to make it big in this business. In this article, we take a look at the disadvantages small businesses may face, the benefits of small business fulfillment companies, and why it would make sense for them to partner with a fulfillment center for small businesses to be successful. Why Use Small Business Fulfillment Companies? You may wonder why small businesses (e.g., eCommerce startups) would want the hassle of working with a fulfillment company in India. Wouldn’t it be a lot easier – and more efficient – in doing it themselves? The answer is easy: While self-fulfillment may appear cheaper and more hassle-free in the beginning, a small business quickly realizes the time, effort, resources, and expertise required in managing the logistics and distribution involved in a successful business. It quickly dawns upon them that they’re better off outsourcing this task to an expert. It saves money, brings best-in-class expertise, and saves real estate. Therefore, the benefits of small business fulfillment services are endless! Some Leading Advantages of Fulfillment Centers for Small Businesses Inventory managementWarehouse outsourcingBenefit from 3PL economies-of-scaleBest in class technology, software systems & data analyticsReduced number of employeesOrder processingReturn-order processing [contactus_lilgoodness] But Why do Fulfillment Companies Reject Small Business Clients? The barrier that new clients (e.g., eCommerce startups, D2Cs) face in finding a fulfillment center for small businesses is primarily related to order volume. Fulfillment is a high-volume business with low margins. And, unless clients promise a MOQ (Minimum Order Quantity), the fulfillment companies simply won’t find it profitable. Therefore, while the benefits are evident, small businesses must also carefully select the type of small business fulfillment companies to partner with. Weighing all the factors carefully in choosing the right fulfillment center for your businesses ensures a suitable match for both sides. Are There Any Exceptions? The timing of tying up with a fulfillment center for small businesses is an important one. You may want to get off the ground first and then partner with one, or if you are entirely cash-crunched, you’d like to wait till you have sufficient funds. Also, outsourcing may be unfeasible for manufacturing firms that use a JIT (just-in-time) supply chain. However, these are more of an exception than the norm and in most cases, using small business fulfillment companies brings immense value to those businesses. Significance of Small Business Fulfillment Services Small businesses, eCommerce startups, newly launched offline companies, and rapidly growing fledgling businesses are consumed with a host of frenetic daily business activities to manage their operations. And, when these companies are trying to achieve scale rapidly, such activities become greatly amplified. Under such a scenario, a small business is much better off focusing its efforts on business growth and customer-satisfaction-related activities against spending the time and effort needed to execute the logistics and distribution function. That’s not to say that the logistics process isn’t an essential part of managing the business – in fact, quite the contrary! In today’s times of global and borderless marketplaces, managing your delivery and logistics is an even more vital tool to achieve customer satisfaction. Often, a company’s differential advantage arises from this aspect. Therefore, all the more reason why the team is better off outsourcing this function to experts - like a fulfillment center for small businesses - is so that they can be reassured that it is in good hands. How do Small Business Fulfillment Companies Deal with Minimum Order Requirements for Fulfillment Services? A fulfillment center for small businesses manages your inventory, processes, and dispatches your orders on your behalf. Since they have several clients (online & offline), they need to know the order volumes they can expect from each platform to plan their operations, invest in resources, and create workforces accordingly. As a result, they set limits, both minimum and maximum. This enables them to plan their resources and provide the best possible service to their clients. It also helps them calculate their critical internal metrics such as the number of vehicles, loaders, suppliers, storage space, MIS, full-time and part-time employees, drivers, slab-based pricing for various clients, etc. Read on to know more in detail about how order fulfillment services for small business here. Typically, small business fulfillment services use the following metrics to bracket clients: Minimum Monthly-Order-Quantity (MOQ), e.g., less than 500, 500-1000, 1000+Minimum Monthly-Order-Value (MOV)Minimum monthly-fulfillment fees. If your bill doesn’t hit the minimum (e.g., Rs.50,000), you would still be billed that amount.A minimum number of trucks/ pallets/ tonnage (etc.) is sent out every month. New or growing businesses like eCommerce startups must carefully calculate their requirements while negotiating with a fulfillment center for small businesses. This helps them to get the best rates and service from 3PLs. Given below are essential metrics for small-business clients to consider while committing to MOQs: Forecasting demand: Start with demand forecasting, i.e., the recorded demand for your products. Provide for scale, cyclical demand, seasonality, competitors, etc.Calculate your break-even point: This requires a solid understanding of your business model, including: Number of units sold to make a profit that covers operating-costNumber of units sold to make a profitOther costs, e.g., inventory carrying costs, overheadsUse MOV (Minimum Order Value): If you sell a basket of products, you could commit to a monthly MOV to your small business fulfillment company, i.e., you may not meet the MOQ for each product, but if you achieve a combined MOV, they would still give you reasonable rates and service. Collaborate with other same-space players: Combining with other companies in your ecosystem that use similar supply-chain, raw materials, etc., will help you reduce your operating costs. This allows you to earn more profit, grow your business faster, etc.Leverage the new business angle: Explain to your small business fulfillment company that you are still setting up and testing market conditions, demand, etc. And after gauging the results, you would gradually increase the quantity. Often, small business fulfillment services will be agreeable. Benefits of Using a Fulfillment Center for Small Businesses 1. Rapid growth: Small-business owners and teams must rapidly focus on growing their businesses by logical extension of the section above. And, you certainly wouldn’t want this growth to be restrained due to poor fulfillment. Partnering with a 3PL with a vast range of resources ensures your fulfillment partner matches your speed and enhances it. 2. Seamless integration of eCommerce platforms: Instead of grappling with integrating various individual systems, you’re better off using an experienced 3PL to integrate all your eCommerce platforms for a unified, comprehensive solution. This setup is guaranteed to reduce cost and time. 3. 3PL discounted rates: Small business fulfillment companies serve numerous clients and operate at a tremendous scale. Therefore, they can command bulk discounts from shippers like UPS, BlueDart, & FedEx on rates and get better terms of service. Thus, when you use 3PLs, you can avail of these bulk-discount rates and facilities – despite not reaching that scale yourself. 4. Own warehouse not needed: Using a fulfillment center for small businesses means you don’t need to own and manage your warehouse. This is very expensive, but it also requires massive resources and adherence to stringent practices to be effective. 5. Ease of selling internationally: When you sell across borders, dealing with various tax regimes, travel zones, international laws, customs, duties, and documentation becomes a significant challenge. It is common knowledge that a significant bottleneck of expanding internationally is dealing with global fulfillment. Using an order fulfillment service for startups reduces that burden. 6. Leverage 3PL expertise: Experts are good at what they do. And small business fulfillment companies are experts in providing 3PL fulfillment services. So, it is in your interest to outsource all your inventory and fulfillment activities to them, leaving you to concentrate on your company's growth. Related Article: 3PL Warehousing Companies Top 10 Small Businesses Fulfillment Companies and Startups in 2023 WareIQShopify Fulfillment NetworkRed Stag FulfillmentShipMonkeFulfillment ServiceShipBobFedEx FulfillmentWhitebox ShipheroSaltbox The following 3PLs have a reputation of being conducive to small businesses, can work without minimum order quantities or even with small amounts, and have received positive reviews from small-businesses owners. Source WareIQ Established in 2019, WareIQ, a Y-combinator backed startup, has rapidly grown to be the leading provider of full-stack eCommerce fulfilment services for some of the most reputed brands in India. WareIQ offers a full-stack platform for eCommerce companies to enable same-day delivery and next day delivery to customers – an Amazon Prime-like experience but accessible to everyone. WareIQ has empowered brands to sell more, sell faster & sell everywhere due to: Access to WareIQ’s strong nationwide network of fulfilment centres, micro-fulfillment centers & urban dark stores near their customersAccess to all major national & hyperlocal last-mile couriers at discounted rates for making same/next day deliveries possibleEasy integration across multiple online platforms & marketplaces enhancing multi-channel sellingHorizontal marketplaces: Flipkart, Amazon etc.Vertical marketplaces: Nykaa, Myntra etc.D2C platforms: Shopify, Magento, WooCommerce etc.Social commerce platforms: BikayiAccess to a superior centralised tech platform for eCommerce operationsML-based prediction engine for efficient warehouse network design & smart inventory placementCentralised platform for core fulfilment & shipping operationsPost-shipping apps for delightful experience & zero to minimum supply chain leakages (Branded tracking page with smart marketing placements; Trigger-based updates & smart communication platform) WareIQ has customised offerings for merchants experiencing different order volumes as well as having different delivery speed expectations. WareIQ is probably one of the very few fulfilment tech companies in the world that have same-day delivery service for their customers under their product WareIQ RUSH. With world-class WMS functionalities, WareIQ handles the entire range of intricate operations in the eCommerce fulfilment process, ranging from Inbound Operations such as scanning and quality check, through 100% accurate Pick and Pack, to Inventory Management across all channels. WareIQ’s next day delivery and same-day delivery services are helping eCommerce businesses set new standards with respect to setting customer expectations and fulfilling them with high efficacy. At the same time, WareIQ customers realise significant cost savings and wider reach due to better negotiations with shipping partners, strategically placed warehouses (there are different types of warehouses for different requirements), economies of scale and scope in warehousing and data-driven decision making. WareIQ’s WMS, a centralised tech platform, helps to better manage undelivered orders by reducing NDR processing time by 12 hours – a multifunctional NDR dashboard helps to track and take immediate action for undelivered orders in real time, thereby reducing RTO by up to 10%. Automatic replenishment recommendations and easy purchase order creation capabilities on the WareIQ platform further empower eCommerce companies to leverage all possible ways of increasing their ROI. 300+ brands, such as The Man Company, Future Group, Kama Ayurveda and Wingreens Farms, have trusted WareIQ as a reliable partner in their growth journeys. No minimum order quantity requirements make it suitable even for eCommerce firms having low order quantities to take advantage of the latest trends such as next day delivery and same day delivery. The onboarding process is simple, convenient and less time consuming, while the pricing policy is clear and transparent. WareIQ also undertakes strict safety precautions at its warehouses and complete ownership of the operations, thereby minimising the risk exposure of WareIQ customers. Source Shopify Fulfillment Network It was launched in 2006 in Ottawa, Canada and was specifically targeted at small-business clients. It is an excellent option for small businesses but still provides ample space for clients to expand into enterprises. Its platform is utilised by over 1.7 million businesses in over 175 countries. Clients can ship fewer than 10 orders or exceed a 1000 orders, daily. It suggests locations for inventory storage. Locations are vetted by Shopify and facilitated by a panel of fulfillment services across Canada and the USA. They have flexible contracts and customized pricing. They offer a custom API to track order progress and insights. Some features offered by Shopify are: Mobile commerce ready: Online Shopify stores contain an in-built, mobile commerce shopping cart. Customers can shop from the seller's store digitally, through a smartphone or tablet. Automatic carrier shipping rates: Shipping rates can be received automatically through major shipping carriers like UPS, USPS, and FedEx. Flexible shipping rates: Shipping rates can be set up according to fixed-price, tiered pricing, weight-based, and location-based rates. Customer profiles: Sellers can get more information about their customers and their preferences. Their personal information such as contact info and order history can be found in one place. Digital products: Customers can order and download digital products right from the seller's online store. Red Stag Fulfillment Source It is conducive for small businesses and maintains numerous fulfillment centers. Hence, it offers quick delivery times and reduced costs. A 30-day trial is also offered. The company has tie-ups with market leaders like WooCommerce and Shopify. As per statistics, 100% of orders are shipped on time and to an accurate location. Typically, the MOQ is set at 200 orders per month, but fewer orders can be shipped. It works with Amazon Prime and ships internationally. Some features offered by Red Stag Fulfillment are: Warehousing: 3 existing warehouses in the US are available for inventory storage and 3 more warehouses are expected to be added to their fulfillment network in the near future. Order fulfillment: Red Stag's fulfillment process consists of specialized training, handling, packaging, and shipping deals and makes it a unique proposition for merchandise that requires special handling. Same-day fulfillment with quick cutoff times, and heavy-duty packaging are also available. Shipping: Red Stag partners with the biggest names in distribution - UPS, USPS, FedEx, Amazon, and OnTrac - most of which offer discounted rates. Integrations: Red Stag offers integrations with eCommerce shopping carts and seller marketplaces. Special services: Unique services offered by Red Stag include kitting, custom packaging, bundling, reverse logistics, international shipping, and more. Source Shipmonk It offers services to all eCommerce firms. Fees are based on monthly order volumes, and no MOQ is set. Inventory storage fees are fixed depending on the size and scale. Provide discounted rates from all leading shippers. Picking fees gradually reduce as your order pickups increase. In addition to Amazon Seller fulfillment, it also fulfills orders from non-conventional marketplaces like Groupon and Etsy. Some features offered by Shipmonk are: Multiple Warehouses: Shipmonk offers multiple warehouses, located all across the country. Free Integrations: Shipmonk has over 100 shopping cart and marketplace integrations, usually with free setup. Transparent Billing: Their billing process offers a precise breakdown of costs in the portal so customers can maximise on budgeting efficiency. Freight Management: A specialised engineer can help in case you need to import inventory by guiding you through the process of filing the correct documentation and coordinating freight. Returns Management: Shipping labels for customers can be created directly in your account and alerts are sounded when a return enters back into the warehouse. Source eFulfillment Service You don’t need any long-term contracts. There are no MOQ requirements or setup costs for initiation. The company offers competitive pricing and an efficient cross-docking facility, i.e., orders shipped out upon arrival, cutting out any holding or storage costs. It is a good option for crowd-funded firms to test the market fit for new products by shipping them to promoters and backers. Some features offered by eFulfillment Service are: Simple, affordable pricing: There are no setup fees, long-term contracts, minimum order requirements, hidden fees, or fine print. Friendly terms for e-commerce startups: They provide outsourced fulfillment that is specifically targeted at startups. Integration with global distributors: They have integrations with every big name in distribution services such as DHL, Fedex etc. Order Fulfillment technology: They offer things like custom tracking software and customisable alerts to keep customers updated about the fulfillment status of their order. Best-in-class security: Their secure technology infrastructure ensures that your data is kept safe and protected. Source ShipBob Ship Bob is popular with eCommerce firms and is used by more than 5,000 online businesses. There are no MOQ requirements and its pricing plans are simple and transparent. It offers a growth plan service that suits fledgling start-ups with less than 400 orders per month. There are zero onboarding charges, payment is as per usage and it implements a self-service model. It is useful for flash sales and is integrated with BigCommerce, Amazon and Shopify. It offers a global shipment network and claims an impressive on-time delivery and accuracy rate of 99+%. Some features offered by ShipBob are: Large fulfillment network: ShipBob has multiple warehouses and fulfillment centers that enable sellers to manage their inventory by keeping a certain amount of stock in multiple warehouses. Web-based platform: ShipBob’s web-based platform helps you to keep an eye on logistics, manage, edit, and customize orders, track real-time stock levels from any location, and receive notifications whenever inventory needs to be restocked. Guaranteed 2-day shipping: ShipBob offers a 95% plus 2 day shipping fulfillment plan, regardless of where the order has to be delivered. Omnifulfillment: ShipBob fulfills orders for both online and offline channels to help provide a consistent customer experience, regardless of where people buy your products. B2B fulfillment: With ShipBob, you can easily connect to retailers for EDI-automated wholesale and retail workflows, and print retailer-compliant packing slips. Source FedEx Fulfillment It is a fulfillment company that is attractive for small businesses due to its one-stop fulfillment. It is a reputed, credible brand that is now hugely popular with start-ups because of its comprehensive one-stop solution. There are no onboarding charges. Their services include fulfillment, inventory storage, shipping, and packing. Clients benefit from its scale (like receiving significant shipping discounts) since its 3PL business is tied with its parent company. They do have a MOQ of 400 orders, but many benefits are offered in return. Some features offered by FedEx Fulfillment are: Warehousing: FedEx consists of 13 warehouses in the US and 1 international fulfillment center, that are all connected to FedEx's comprehensive transportation network. Order fulfillment: Through automation and process streamlining, FedEx Fulfillment ensures a reduction in the number of people handling each order, which increases efficiency and reduces the scope of errors. Shipping: FedEx Fulfillment only supports FedEx shipping services, but the offers worldwide fulfillment in over 200 countries. Reverse logistics: FedEx Fulfillment is a just a tiny portion of all services offered by FedEx’s extensive logistics business, so users have access to all of FedEx’s other services, including industry-leading return management services. Integrations: Integrations are offered with Shopify, WooCommerce, Magento, eBay, Walmart, Etsy, and a many more. Source Whitebox It is popular with sellers on Amazon as well as other B2C sellers. It offers several services to facilitate sellers operating on Amazon. It differentiates itself from it’s competitors since it offers marketing services in addition to order-fulfillment, making it convenient for clients. There is a flat monthly fee for using its platform which includes inventory storage, software, account handling, shipping, receiving, and processing. It does have a MOQ of 1,000 orders but has several success stories of small businesses that started with them and grew to become much larger firms. Some features offered by Whitebox are: eCommerce software: Whitebox uses its proprietary technology, Omnifi™ throughout the entire lifecycle of order fulfillment. This gives sellers access to insights and metrics about their customers and order fulfilment process. Marketplace management: Sellers can access tools to automate and simplify the management of online marketplaces, including review alerts, order tracking, reseller tracking and more. Warehouse and Inventory Management: Whitebox offers a flexible warehouse management system that gives brands valuable live insights into inventory. Optimised packaging and shipping: They offer recommendations about the best type of packaging for different types of products to help reduce damage and maintain a great customer experience. National and international coverage: Strategically located warehouses result in cost-effective shipping wherever the customer is located. Source Shiphero It has zero setup charges and offers two solutions – fulfillment and warehouse software. These are very helpful for eCommerce firms and start-ups. The order-fulfillment service is completely automated and runs across hundreds of company-owned warehouses. It is a very popular small business fulfillment company and is used by over 5,000 brands. Some features offered by Shiphero are: Order fulfillment: They smartly distribute and store your inventory across a country-wide network of warehouses, which offers faster delivery at a lower cost. Diverse Integrations: They are integrated with leading eCommerce, marketplace, shipping and robotics platforms. Mobile pick & pack: The order pickers are sent into the warehouse with mobile tech that makes picking faster and more efficient and cuts error rates by 99.99%. Rate Shopping: Using ShipHero’s real-time ship rate shopping enables you to save on postage. The cheapest carrier will always be suggested. Reporting: Built-in reporting features cover everything from COGS to Picker/Packer Efficiency to Replenishment. Custom reports are available as well. Source Saltbox It is a fulfillment company that is suitably designed for start-ups and small-business clients. There are no MOQ requirements. The company provides discounted shipping rates from leading shippers like FedEx, DHL, & UPS. It offers warehousing and workspaces, which is unique and helpful and is integrated with WooCommerce, Shopify and Etsy, among others. Some features offered by Saltbox are: Reduced transit time: They offer local drop-off which results in a reduction in both time taken to deliver the order and cost. Guaranteed inventory replenishment: They offer 24-hour guaranteed dock-to-stock on inventory Same-day fulfillment: They offer same-day shipping fulfillment for orders received by 3 PM Free packaging: They offer standard packaging at no additional cost. No penalty fees: There are no setup, onboarding or any other type of penalty fee that is applicable. Top 5 Factors to Consider While Selecting Your Small Business Fulfillment Company Firstly, select a small business fulfillment company that suits your business requirements. Just like players in any industry have their focus areas, so do 3PLs. Some are specialized, while others offer general logistics. Typically, 3PLs are classified into two categories: General Purpose 3PL: Services range from transportation to storage. Generally handle cargo that doesn’t need any special care, packing, etc., and is fairly inexpensive.Niche-Specific 3PL: Serve specific markets and categories, e.g., eCommerce, certified 3PLs for special products, perishable goods, etc. Also, Consider the Following Points to Analyze which 3PL Suits Your Small Business Requirements Technology Only through modern technology like cloud storage, AI, ML, IoT, Data Analytics (etc.) can a 3PL provide you with real-time, transparent, and efficient services. Scalability While you still may be a small business, you would undoubtedly be looking to scale. Unless a 3PL has resources that can serve you as you expand, it isn’t the correct one for you. Financial Strength Select a financially stable 3PL since you will be dependent on them for an essential function of your business – you certainly don’t want customer packages held up because your 3PL is facing cash-flow issues or is going out of business! Industry Expertise This is a critical consideration. When a 3PL is experienced in your industry, they bring knowledge and experience. Since a small business is only just starting, this expertise is valuable. Transparent Rate Structure While various 3PLs have their rates and tariff structure, you must select one whose tariff card is easy to calculate and understand. This is important for estimating your operating costs, breakeven points, and profitability. Typical cost-heads include storage, shipping, onboarding, order processing, etc. Additionally, consider points like a 3PL’s management skills, warehouse locations and maintenance, work culture, and disaster preparedness. Finally, look for 3PLs that typically don’t ask small businesses to commit to long-term contracts or command hefty fees upfront. Limitations and Challenges in Dealing with Small Business Fulfillment Services Small businesses that partner with 3PLs may likely have to opt for those willing to work with small businesses in the first place. This could mean using a second-rung small business fulfillment company or accepting that the fulfillment center for small businesses will not immediately assign their best resources to you since you aren’t a cash cow for them (at least not immediately). As a result, several challenges exist in the working relationship between small businesses and their small-business fulfillment company. Some areas of possible friction or inefficiency are mentioned below: 1. Limited warehouses and shipping locations: With increasing Ecommerce competition, delivering customer parcels at the earliest (and cheapest) is now a critical function. The location of your 3PLs fulfillment centers directly determines your delivery times. Unless your 3PL has an elaborate network of warehouses and fulfillment locations, both central and satellite, they will not be able to achieve optimized delivery times. 2. Complicated fulfillment systems: 3PLs use the latest and modern technologies to manage their logistics and distribution operations. These elaborate back-end platforms power their businesses and seamlessly integrate with clients’ MIS. However, given that such fulfillment systems are vast in their scope, a small business may find it overly complicated and difficult to understand or negotiate. Remember, small businesses like eCommerce sellers are still boot-strapping or only just finding their feet. Therefore, assigning precious resources to a task that is outsourced for its convenience in the first place is counter-productive. 3. Inefficient handling of order returns: Order returns are omnipresent in eCommerce – they will be a part of your daily operations. When you use a 3PL, your logistics are set up for order returns to reach their warehouse directly. However, suppose your 3PL isn’t set up to handle this efficiently and to the customer's satisfaction, including replacements, refunds, discounts on future orders, credit notes, restocking, returns to the manufacturer, etc., you will not only bleed profits but also create irate customers that will probably never return! You May Read: Contract Logistics vs 3PL Logistics 4. Customer Service: It is much more difficult to retain a customer than get a new one. Unfortunately, eCommerce firms lose billions of dollars every year due to poor customer relations and processes handling. With new firms trying to sell to the same audience, you must provide good – if not excellent - customer service. 5. Stock-out problems: This occurs when an item isn’t available because demand is outstripping supply. Again, while this is never a pleasant situation, it is something that the supply-side will have to deal with forever – the solution is to minimize its occurrence and, therefore, mitigate its damage. For that, suppliers and 3PLs need to understand historical order patterns across products, customer segments, high and low demand periods (etc.) and use this to predict future buying trends. Conclusion: Should you use a Small Business Fulfillment Companies for Your Fulfillment Needs? The benefits of using a fulfillment center for small businesses like an eCommerce startup are evident. The trick, however, is for the small business to understand their business model and consumers comprehensively so that they can make well-calculated projections and commitments to the 3PL while entering into a contract and negotiating terms and conditions. This will benefit the 3PL by getting the best rates, but it will also help them plan and implement their small business fulfillment services in the best possible way. One such company that offers small business fulfillment services is WareIQ. WareIQ is a category-defining, best-in-class full-stack eCommerce fulfillment tech platform (with inbuilt inventory planning, order management & shipping system) for modern brands to accelerate online sales/ expedite revenue growth & profits with same/next day delivery. We not only help you reduce your logistic costs but also your delivery timelines – this could be the game-changer your business needs! WareIQ offers a centralized tech platform for your entire eCommerce operations. ML-based prediction engine for efficient warehouse network design & smart inventory placementCentralized platform for core fulfillment & shipping operationsPost-shipping apps for a delightful experience & zero to minimum supply chain leakages [signup] Small Business Fulfillment Companies FAQs (Frequently Asked Questions) Which are the 5 best fulfillment companies for small business?• WareIQ• Shopify Fulfillment Network• Red Stag Fulfillment• ShipMonk• eFulfillment Service Why is the right time to hire order fulfillment companies for small businesses?Each owner decides at a different time and often for different dominant reasons as every business is unique. Generally the need for a fulfillment company arrives when one’s ecommerce business is booming and they want to expand their capacity without adding warehouse space or personnel. Startups/small businesses should make sure if they have a running website, and their business is well-documented and has a regulated structure. What are the main factors to look for in the Best Fulfillment services for small businesses and startups?• Location of the warehouse• Fulfillment service software used• Affordability • Security management system • Order Damages and Insurance Which location is best for fulfillment options?Deciding on the location for fulfillment services is crucial and is a major task. For instance if your inventory is based out of the country then you should make sure that your warehouse choice is placed nearby your business center.
May 28, 2022