P&L Playbook for eCommerce by ex-SUGAR & Raymond Leader
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eCommerce Logistics

First Mile Delivery: A Detailed Guide Including Definition, Importance, Challenges and Tips for Optimising First Mile Logistics in 2025

First Mile Delivery: A Detailed Guide Including Definition, Importance, Challenges and Tips for Optimising First Mile Logistics in 2025

Many rapidly expanding online merchants struggle with the ongoing balancing act of providing clients with a great delivery experience. In the process of offering smooth and hassle-free deliveries, if a business is paying too much in shipping costs, it can majorly reduce profit margins. What if it was possible to enhance the delivery experience at a more early stage of the eCommerce supply chain? It turns out that your shipping experience is directly impacted by the first mile delivery stage and optimizing it will result in significant downstream gains. In the article, we will learn the advantages and challenges of first mile delivery, its importance and tactics to improve it. What is First Mile Delivery? First mile delivery refers to the transportation of goods from a merchant’s premises or warehouse in the supply chain to the next location where the goods are stored and distributed from there. But for various supply chains and businesses, the first mile delivery could signify different things. For a retailer, this can entail shipping goods from a local distribution center or storefronts to a regional warehouse. For logistics companies, this could be a service of picking up goods. First mile delivery is used by eCommerce businesses where products are picked up from a merchant and then passed to third-party logistics or courier service to be delivered to the end-user (Buyer). [contactus_gynoveda] Importance of First Mile Logistics in eCommerce First mile delivery, which is the first step in the supply chain, has a significant influence on how a company handles retail fulfillment. Ineffective first mile delivery can slow down last-mile delivery by affecting the supply chain throughout the fulfillment stage. Some of these inefficiencies frequently have their origins in incorrect purchase order decisions. If production is delayed or an incorrect amount of inventory is delivered, it is enough to throw off the remainder of your supply chain, especially if you are receiving orders that depend on the arrival of the upcoming shipment of stock. By identifying ways to increase visibility, diversify your supplier network and implement a robust warehouse receiving process, many problems that arise during first mile logistics can be resolved. Tactics to Optimise First Mile Delivery Processes source Choose a Tech-Enabled Fulfillment Company There is always the option of handling first mile logistics on your own but if you're ordering a lot of products and handling a lot of orders, you're going to need the room and the assistance of a professional. You can choose which parts of a 3PL's warehouse network to keep products in when you first begin working with them. You can request direct delivery of merchandise from your supplier to the fulfillment center, where logistics professionals will carry out a careful inventory check to make sure the purchased items match the paperwork. WMS software is built to make sure you have the information you need so everything is accounted for and correctly stored, in order to guarantee the completion of flawless first mile delivery. After receiving inventory, you can monitor the flow of it in real-time on the dashboard. You can access inventory records, calculate the best time to replenish inventory and create automation reorder notifications when inventory is running low because all inventory and order data is consolidated in one location. Analyze the Supply Chain Process Making a map of your supply chain starting with first mile delivery is a good method to improve it. You may find the inefficiencies in your current supply chain and the measures required to optimize and improve processes by carefully looking over each step of it. The manual process is labour-intensive and subject to human mistakes. If you are at this stage, you should think about automation and other supply chain technologies to lessen the human factor involved in reordering goods and also to reduce errors. Make a Warehousing Strategy Creating a thorough warehouse receiving process is another first mile delivery must. This process specifies how you or your warehouse team will receive inventory shipments delivered by your supplier and is crucial for proper inventory tracking. Before that, you should establish the quantity of each item that will be transported in each container as well as the packaging specifications for every product. Then meet with the shipper, unload the required cargo, and double-check the received inventory against your inventory records. Organise the Data You must have a system in place to gather data and present critical distribution metrics in order to properly enhance your first mile delivery process. Data and information on the supply chain can be recorded in a variety of ways. You can assess the effectiveness of the first mile logistics process using different metrics like shipping timing, purchase accuracy, manufacturing cost, number of days your supplier needs to supply stock after receiving an order, the time period needed to disassemble pallet loads and stock ready-to-ship merchandise inventory and the proportion of your supplier's items that are harmed while being transported. By using inventory management software or a warehouse management system, much of this can be monitored or you can also just outsource fulfillment to increase your visibility of these metrics.  Create a Packaging Process with a Scanning and Labeling System The majority of your products will be damaged regardless of how quickly it gets to your warehouse if it is not wrapped properly for transportation. The quality of the packaging used for your inventory is one factor to consider when choosing a supplier for your company, some even provide custom packaging services. There needs to be a proper scanning and labeling process in place to ensure that the right products are packaged and in the appropriate manner. You can read more about shipping labels. Challenges of First Mile Delivery in 2025 First mile delivery is a complex supply-chain process. There are several difficulties, but we will concentrate on the top four first mile delivery challenges likely to be faced in 2025: Lack of Visibility Poor visibility is a major challenge of first mile logistics that ultimately impacts not just mid-mile operations but also last-mile processes along with the experience of the end-buyer. Poor handling, en-route delays and ineffective tracking of freight movement from a warehouse to a hub, among other things are important impact areas of poor visibility. Lack of Focus on First Mile Experience For the past several years, businesses have come to understand the value of last-mile delivery in terms of offering a better customer experience. Due to the fact that this process has fewer stakeholders and is not customer-facing, first mile delivery has been conveniently overlooked as a result. First mile operations should be given the same attention as other aspects of the supply chain, such as the requirement to give customers complete transparency of the delivery process and to reduce logistics costs. Due to this, businesses must use reliable first mile tracking systems that reduce expenses and guarantee complete visibility of delivery operations. Improper Packaging Packaging frequently suffers as a result of the rush to supply quickly. Regardless of the type of item, businesses frequently employ standard packaging materials. This delays the entire freight transportation procedure and frequently results in material damage during first mile delivery. Branded packaging is the most sophisticated packaging method. It not only saves money and better safeguards products but also helps in marketing your brand. Ineffective Labeling Methods Labeling is a small but crucial component of first-mile delivery. Many companies still manually label packages to this day. As a result, not all the required fields are mentioned in packages, which causes dispatching to be ineffective and prone to delays. This problem is rapidly solved by automating dispatching, a crucial component of last-mile tracking technology. Top 4 Differences Between First Mile Delivery and Last Mile Delivery [table id=43 /] Suggested Read: List of Delivery Partners for Ecommerce & Last Mile Delivery Companies Conclusion: Integrating First Mile Delivery with WareIQ Now it is clear that good last-mile delivery has a direct impact on customer satisfaction and profitability. Customer satisfaction can be drastically decreased if a shipment is delayed or a customer receives an incorrect item. The first mile delivery procedure is largely manual for many logistics service providers, if not entirely. Moving all operations and supply chain data online is the first step to cutting costs and improving efficiency. Remember that you need applications that provide visibility and control to all parties involved including dispatchers, drivers, operations managers and shippers. Using WareIQ’s smart technology, businesses can customize logistics management systems to better suit their requirements and make smarter automation decisions. WareIQ, a complete logistics management system, guarantees a decrease in delivery costs and time. The end-to-end visibility and tracking capabilities that results from moving the entire delivery process to a digital platform are increased. Companies can use the best transport management system with optimal route management by partnering with WareIQ. Features like real-time intercity tracking, dynamic detention and delay alerts, delivery route planning and route optimization can improve linehaul tracking. Together, these capabilities greatly simplify the processes involved in first mile delivery. Customer satisfaction can be considerably raised by an effective tracking system and a prompt delivery system. WareIQ takes care of the following guidelines while sending freight: To appropriately spread the weight of your shipments when they are piled one on top of the other, we use top and bottom load protectors. Stretch wrapping is used to support the shipment during transit and avoid load movement. Enough bubble wrap is included in each box in the shipment to guard against breakage. As you develop connections with suppliers, we make sure to hold them accountable for their output and delivery quality. We increase vertical stacking strength, avoid damage to corner edges and balance the load by using corner/edge boards. First Mile Delivery: FAQs

August 04, 2022

What is Demand Forecasting? Definition, Types, Benefits of Forecasting Customer Demands for Ecommerce in 2025

What is Demand Forecasting? Definition, Types, Benefits of Forecasting Customer Demands for Ecommerce in 2025

Running an eCommerce logistics business is filled with challenges. These challenges are aggravated when businesses operate in a cutthroat environment where new competitions emerge daily. Organizations, therefore, try to forecast the upcoming market conditions, trends and requirement patterns to achieve sustainable growth.  As a business owner, you might have pondered on some or all of the questions below: What are the products you should produce to mitigate market demand? How many products do you need to store in distribution centres? What should be the exact closing inventory level to run the business successfully? What strategies do you need to adapt to deliver products in the shortest time? The best way to get the answers to these questions is to understand demand forecasting.  This is the technique to understand future requirements and utilize them to improve your customer deliveries without compromising profit margins. Demand forecasting uses different factors to analyze customer behaviours, current and future trends, product acceptance, etc., to provide the best possible visibility for the future.  This article will walk you through the in-depth definition of demand planning & forecasting, the different types of demand forecasting and the reasons you should use it. What is Demand Forecasting? Demand forecasting is the process of making close-to-perfect predictions of the future requirements of all customers. This could be related to existing products you have been selling for years or any new item you plan to launch. Businesses usually deal with stock-keeping units (SKUs), which may vary from hundreds to lakhs, depending on the type of business. The number of customers can also vary at a similar level.  Combining all the SKUs and customer demand for any short or long-term period creates a massive combination. Moreover, many more variables like the geographic location, specific time period and even specific projects make it more complicated. Demand forecasting combines all these variables and projects the best possible understanding of the demand pattern in the supply chain. Demand forecasting, also known as sales forecasting, has different factors such as quarterly forecasts, monthly demand planning, weekly sales forecasts and even daily demand plans. In the case of highly perishable goods like food items, you can even see hourly supply and demand planning. The more accurate your demand planning & analysis is, the more it helps to boost your supply chain efficiency. This is because your overall supply-chain planning depends on the accuracy of your demand analysis.  Based on the demand pattern, the supply team plans the inventory strategy and estimates the in-house capacity, materials, ordering pattern, stocking policy, etc. These are the critical factors of an efficient supply chain. [contactus_uth] 6 Types of Demand Forecasting Based on different business models, experts have created different demand forecasting techniques: Passive Demand Forecasting The passive demand forecast model is one of the simplest forms of demand analysis in the supply chain. Here, the historical data is analyzed and used to predict the future requirements of customers.  In the case of seasonal demand, this forecasting method is useful. For instance, an umbrella manufacturing company can assume whether the same quantity of products will be required in the next year as the previous year.  In this scenario, some thumb rules are used along with the past sales data. For example, simply assuming a 10% increase from last year's sales will be the forecast for the following year.  It is that simple. But in this planning methodology, you need to have in-depth historical data for a more extended period to reach a higher level of forecast accuracy.  Active Demand Forecasting The active model is more scientific and data-driven. It not only relies on historical data but also considers external factors to conduct demand forecasting.  For example, deep market research, marketing campaigns, economic growth, government notifications, budget plans and local and global political conditions all are considered during the demand analysis.  In most cases, startups and organizations entering a new market perform this type of demand analysis. However, there is very little historical data available in these cases and demand planners rely on market surveys and research to generate sales forecasting in the supply chain.  Therefore, this type of demand planning needs more analysis to avoid any assumptions. Nowadays, organizations use advanced software to perform qualitative and quantitative analyses to get accurate information about every product.  Short-Term Demand Forecasting Demand forecasting is also done based on the time horizon. Short-term demand analysis usually considers a time frame of the next three to twelve months. This enables a more accurate percentage.  Usually, the demand analysis is made based on short-term predictions of future demand. This benefits the organization by reducing the required inventory, improving turn-around time, lessening lead time and enhancing flexibility in response to any fluctuations.  Even during the in-house capacity planning, considering the short-term requirement forecast is the smartest method. It helps avoid unnecessary change over time and provides better visibility on your short-term decision making.  Long-Term Demand Forecasting Long-term demand forecasting is more like a strategic plan for business growth and development. Usually, organizations consider a five-year horizon for this type of planning.  When the marketing team considers penetrating new geographical areas to expand the business, they need to try to capture new customers, frame plans to launch new products, etc., the long-term demand analysis captures all the reports and data to populate the forecast. Using this technique, you can plan your future roadmap and budget for different verticals. For example, based on the five-year plan, you can consider a significant capital investment, increase your marketing budget, create a robust plan to enhance your supply chain performance, etc. This long-term demand forecasting allows you to prepare your business for the future.  External Macro Level Forecasting In this type of forecasting, the broader economic aspects are considered. For example, future economic trends may affect your business growth or give you a new opportunity.  Your organization may think of leveraging low commodity prices and rethink developing with a new supplier. In any case, you need a forecast on which you can rely and make decisions. This is the importance of external macro-level forecasting.  Internal Business Level Forecasting Your internal demand forecast is used to identify the operation's bottleneck and for you to take necessary action to remove it. Do you have enough in-house capacity to mitigate the high demand? Or do you need to enhance your production capacity?  Do you have a robust upstream (supplier side) that can meet timely requirements? You will get the answers to all these questions once you perform the internal business level forecasting. Suggested Read: How to handle stock-outs? Suggested Read: What is Inventory replenishment? What are the Benefits of Sales/Demand Forecasting for eCommerce? Sales forecasting has much broader advantages than just managing optimum inventory or how much to order. Though the advantages are diverse, we have mentioned the most significant ones below: Reduces Financial Risks If robust data backs up financial decision-making, there is little chance of slippage. Demand forecasting provides evidence to craft an accurate budget. When you get a better idea of the demand of your customer base, it helps you improve your financial budgeting decisions. For instance, when demand analysis tells you that the demand curve of any specific product is in a declining trend, you can decide to reduce the inventory levels of that SKU and its components.  This helps to reduce the risk of high amounts of obsolete and ending inventory. Similarly, if the forecast of a new product shows that its sales figures will take some time to shoot up, you can better manage your resource allocation.  Improves On-Time Delivery Modern customers are highly demanding. They know their choices, and there are a wide array of options available. Oftentimes, buyers want the product right away. And if you fail to deliver, there are dozens of competitors who will do the same.  With the increase in customers' expectations, businesses face a massive challenge in delivering products on time. Sales forecasting offers you the opportunity to reduce the lead time.  If you know the market demand of the specific product well ahead of time, you get the time to prepare your supply chain and thus, increase the shipping speed.  Increasing inventory levels, allocating in-house production capacity and keeping your distribution centres (DCs) ready with products, are key strategic actions to improve on-time delivery. This is not possible without smart demand planning & demand analysis. Reduces Inventory Expenses Inventory is the function of variation and is often called a necessary evil. An optimum inventory level helps the business capture competitive advantages by offering quick deliveries.  On the other hand, excess and obsolete inventory can drastically consume your profit. Accurate demand forecasting supports your inventory reduction approach. Your warehouse only has the required materials, which means less money is blocked.  Moreover, do not forget the inventory carrying cost. It comprises almost 25-30% of your total inventory. In-depth demand analysis helps the warehouse and fulfillment centers run efficiently by optimizing the space, resources, and utility charges.  Helps to Create a Pricing Strategy Demand planning greatly supports you in strategically framing the pricing of your products. For instance, customers are ready to pay a reasonable price for products that are in high demand. Then, following the trends, you can tweak the pricing strategy of in-demand products.  Enables Better Negotiation A demand pattern allows you to save a lot of money by helping in negotiation with suppliers and service providers. For example, you can manage to get a good discount on bulk purchases if you know that the demand will rise.  Moreover, for commodities that have fluctuating price trends and high forecasts, you can negotiate with the vendor to keep safety stock with them. This will help you get a better price and avoid inventory carrying costs.  Examples of Demand Forecasting Projecting Trends Imagine that there is a business operated by 2 partners that sell toys, clothes and other items for kids and they have been operating for around 10 years. They have reached their goals in terms of revenue and profitability and are comfortable with operating at this pace instead of expanding. To project trends for next year, they take the average of the last 3 years of historical sales data. This data shows them that they are the most successful in July and October and that they perform at their lowest levels in January and February. They can utilize these analytics to project future trends so that they can accurately place orders, hire temporary staff in seasons of high demand and create plans for promotions during slower months to generate more hype. Conducting Market Research Suppose that a new company has researched and developed advanced wireless headphones and the brand was launched through the crowdfunding platform Kickstarter. While they were able to get decent exposure, they have the objective of expanding their target audience in order to meet their targets. They encourage customers to take part in a survey and using the responses and details such as age, income, location, etc. they identify the current customer base of the company and realise that their product is most popular amongst people who commute via public transport. Based on this information, they create a marketing plan that focuses on ad campaigns targeting at people who ride on buses and trains. They highlight how their product would be helpful in these situations and are able to forecast the upcoming future demand. Using Sales Force Composite Imagine that a brand sells high-quality office chairs targeted at both B2B and B2C customers. In the past, they have primarily had high demand from the B2B sector and have received huge orders from other organizations but for the past quarter, business has been slow. The members of the sales team share the feedback that they have received from customers which helps them identify a market trend. Because more people are working from home and businesses no longer require large office spaces, they have no requirement for office furnishings. The company then forecasted demand for the next quarter with reduced sales and also decreased its production capacity. This gave them time to restructure its marketing strategies to meet the change in demand. How Does Demand Forecasting Affect Your Supply Chain and Fulfillment? In this modern era, eCommerce fulfillment businesses can only sustain themselves if they have an agile and resilient supply chain. If they don't have visibility on customer requirements, all the business processes will run on assumptions.  You may have products that are not required, a pile of stationery inventory that will become obsolete soon, a production line with frequent changes and much more. All these activities trigger inefficiency in fulfillment centers.  Poor demand forecasting will affect the internal business operations and your upstream (vendors and service providers) will also face colossal disruption. Due to the bullwhip effect, suppliers will face high volatility in ordering patterns, inventory planning, stocking policy and other SLA items in the supply chain. These unwanted disruptions will hamper your long-term business relationship. There will be overstocking at every stage, even at the supplier's end.  The most impacted area will be your downstream (the customers' side). The disruption in the supply chain will increase the lead time. As a result, customers will need to wait longer for deliveries which will make them move to competitors and never recommend your products to others. This is definitely not good for your brand reputation. Suggested Read: Why is Supply Chain Agility Crucial to eCommerce in 2025? Latest Trends of Demand Planning & Forecasting in 2025 Seasonality of Demand Seasonality is a factor where the demand and supply increase or decrease due to a particular event or time of the year. For instance, during holidays like Christmas or New Year, the sale of household products and gift items increases. Similarly, you can observe increased sales of umbrellas or raincoats during the rainy season.  Dependency on Global Phenomenons The global economy is more interconnected than ever before. This has been made more apparent by the onset of the global pandemic and the ongoing war in Ukraine, which have had a severe impact on manufacturing, transportation of products and materials and the supply chain as a whole. You may think that events that happen in distant countries have no effect on you receiving your orders on time, if at all, but alas, they definitely do because most manufacturers import at least some of their materials from countries like China. This is why demand planning is important because it can preemptively determine whether these global events will have any impact on your business or not and can easily ascertain what those impacts could be. Requirements to Increase Sustainability Companies the world over are succumbing to growing awareness about the environmental impact that certain manufacturing and supply chain processes have on the planet. Companies are under increased pressure to use sustainable materials in their packaging and to reduce their carbon footprint as much as possible. However, these factors can have a drastic increase in logistics costs so companies need to find the right balance between being environmentally friendly and maintaining their bottom line and this is where demand forecasting can help them get to that balance. Multi-Functioning of Demand Forecasting In the past, demand forecasting, while still an important business process, was usually contained within certain departments. However, this is becoming the exception because most companies now understand the value of sales forecasting and how it can have a positive effect on the entire business. Teams are now striving to find ways to integrate the process of demand analysis with every sector of the business to achieve the best results. Diminishing Importance of Spreadsheets While spreadsheets will always have their importance for maintaining data and an easy-to-understand way, many companies are adopting more advanced methods to demand planning by relying on automation, software solutions and AI to be able to predict varying demand levels for different products in various markets for a specified time period in the future. This helps in mitigating any manual errors or confusion that could occur due to maintaining hundreds of different spreadsheets Conclusion Businesses need to understand their customers and the best way is to use demand forecasting. It helps make smart decisions based on future visibility. Many organizations have realized its benefits and have already implemented this process.  Demand analysis cannot always be 100% accurate but a proper demand analysis and market research can come close. It considers historical data, sales data, market research and economic factors to perform permutation combinations to keep your business strong, agile and prepared for the future. WareIQ is an eCommerce fulfillment company that effectively predicts demand beforehand for its eCommerce partners using its superior WMS (Warehouse Management Software) platform & enables efficient inventory planning & placement. How WareIQ Helps in Forecasting Demand For Its Partners Supply Chain Management Systems (SCMS) is used by WareIQ to forecast supply chains. Our supply chain managers are also educated to predict demand using various approaches. A variety of things can have an impact on a firm and no two sectors are alike. While some of these demand forecasting methods do not require SCMS, the majority of them work well with it to provide an effective supply chain from top to bottom. You can also Read : Inventory Forecasting in Supply Chain Buyer Trend Analysis Everything goes out of style and it frequently happens without warning. Buyer trends are tough to follow but doing so may be quite profitable. To fulfill consumers' fluctuating wants, your supply chain must be adaptable enough to add large quantities of an item in a short period of time. At the same time, being aware of buyer trends may save you from having static inventory and keep your supply chain's operating expenses low. Fortunately, logistics allows for achieving the required amount of inventory. Demand Forecasting Management Demand forecasting wouldn't be necessary if trends were similar year after year. All demand fluctuations, like any other metric, include exceptions. When a projected shift in demand does not occur, having an effective demand exception management strategy could help you manage inventory more effectively. WareIQ identifies and tracks any deviations in projected demand in this sales forecasting model. If it seems that an exception may arise, the supply chain will be prepared to respond immediately, avoiding hidden costs or missed opportunities. Intuitive Planning When you suspect that anything is threatening your supply chain, the best solution is to rely on your D2C fulfillment partner's statistics and instincts. Trust WareIQ as your retail fulfillment partner since we forecast based on our own experiences. By sensing prospective fluctuations in customer demand, our seasoned supply chain specialists can identify them. This is known as intuitive planning. Intuitive planning considers everything you cannot comprehend manually. For example, an eCommerce business may intend to acquire a competitor in the future. Of course, you were unaware of this news at the beginning. However, our popular wisdom suggests that this will result in more consumers, implying increased buyer demand. Intuitive planning is not as sophisticated as the other demand forecasting approaches, yet it is still effective. [signup] Demand Forecasting & Planning FAQs

August 04, 2022
10 Tips to Prepare Your Fulfillment and Logistics Strategy for the Holiday Season in 2025

10 Tips to Prepare Your Fulfillment and Logistics Strategy for the Holiday Season in 2025

The holiday season marks a significant increase in the amount of demand and sales that eCommerce retailers can generate. Capturing interest from customers and ultimately converting that interest into a purchase is only a small part of the entire spectrum of fulfillment services in order to successfully complete the entire supply cycle of ensuring that the customer receives their order on the promised date and time. Performing these tasks accurately can become an even more challenging prospect due to the skyrocketing volume of orders that are brought about by the festive season. To ensure that all orders are delivered quickly and error-free to avoid dissatisfaction from customers, lost sales and RTO initiations, companies need to have an effective logistics strategy to tackle the ever-growing influx of orders. Read further as we discuss what logistics strategies are, the impact the holiday season can have on it, the importance of framing an effective logistics strategy and 10 tips to help retailers assemble one for the festive season. What is the Meaning of Logistics Strategy? Logistics generally encompasses all the processes that are involved in efficiently transporting an order from the manufacturer to the fulfillment center it will be stored in and ultimately to the end customer. A logistics strategy is the implementation of a predetermined set of rules and guidelines so that orders can be delivered smoothly and cost-effectively. Having a comprehensive logistics strategy is essential for eCommerce retailers to run their logistics processes smoothly so that the time taken to fulfill each order is reduced and errors or mistakes can be mitigated. This is especially vital during the holiday season as firms will have to fulfill a much larger number of orders compared to seasons of conventional demand. Not paying attention to adopting a logistical strategy can lead to firms not being able to fulfill orders at their full capacity and will also result in unhappy customers, negative feedback and lower sales volumes. [contactus_lilgoodness] Influence of the Holiday Season on Your Logistics Strategy Higher Demand Retailers often expect and anticipate higher demand and sales volumes than usual due to customers being more prepared to make purchases, either for themselves, family, and friends, and in many cases, all of the above. Thus, the onus is on eCommerce companies to develop their logistics strategies to cope with this higher demand so that they are able to fulfill every order that comes their way and are not put in the position of needing to turn away paying customers. Impatient Customers Due to customers being on a tight deadline in order to receive their orders in time for the holiday season, they are often more impatient than usual, which can result in increased agitation and frustration if they do not receive their orders on time. If an order doesn’t get delivered on time, their negative perceptions of the delay and ultimately the firm, maybe more pronounced due to their enhanced anticipation of receiving their goods in a timely manner and on the promised date. Retailers need to make sure that their logistics strategy is efficient so that every order can be delivered according to the ETA that is mentioned to customers. Extra Pressure on Manufacturers Increased demand on the part of retailers during the holiday season means that manufacturers also need to step up their game so that goods, especially the best-selling items, will be available to fulfill orders when they come in. Retailers need to take the initiative of having a logistics strategy in place at least 2 to 3 months before the festive season which includes communicating with their manufacturers on the expected inventory levels that are needed from them. This will help them take the necessary steps in advance and will avoid pushing out finished goods in a hurry at the last minute, which can lead to decreased levels of quality, higher costs, delayed production and other negative impacts. Added Workload on Every Department eCommerce retail, especially the logistics aspect of it, is not a one-man show. Instead, there are many different departments and external companies and manufacturers that have to come together as one, well-oiled unit. A company’s logistics strategy should clearly lay out the goals that are expected from each department and specify guidelines to streamline each process so that they can be performed efficiently. Importance of Framing an Effective Logistics Strategy for the Holiday Season in 2025 Reduced Travel Times When an eCommerce company has an effective logistics strategy in place, travel times get drastically cut as each process along the supply chain would be operating at its most efficient capacity. Firms can be prepared for unforeseen delays and other circumstances that could disrupt the delivery process so workarounds can be implemented.  Increased Sales Due to the increased demand during the holiday season and reduced travel timelines of each order, retailers that have framed a logistics strategy will be able to fulfill more orders in a shorter period of time, leading to more sales, higher revenue, and larger profit margins. If firms put themselves in a position to capitalize on the excess demand, the entire company will be benefited. Enhanced Customer Satisfaction If companies implement a sound logistics strategy, the entire process of delivering an order to the end customer will be streamlined, resulting in a favourable customer experience and in turn, positive feedback and reviews on their websites or other online forums. Customers generally value the feedback of other customers who have experienced the fulfillment process first-hand and will be more willing to purchase from that company. This allows the firm to generate more sales which will have positive results on the overall objectives of the business. Accounted Expenses By accounting for all the expenses and variables that take place in the logistical process, companies can budget themselves more efficiently which ultimately leads to reduced operational and logistical costs. If an accurate logistics strategy is planned, all the costs involved will be mentioned so that retailers can choose which costs are too high and it gives them the jeopardy to remove or streamline various processes. 10 Important Tips to Help Prepare Your Logistics Strategy for the Festive Season in India in 2025 Implement Accurate Demand Forecasting Demand forecasting is a key element that is needed to assemble an efficient logistics strategy. By analysing historical data of business performance during prior holiday seasons, businesses are able to ascertain which processes worked and which didn’t and can successfully determine demand levels in the current year, which allows them to store accurate amounts of inventory to avoid stockouts and wastage which will also reduce storage and ordering costs.  Prepare Inventory According to Demand After retailers have gauged the estimations of consumer demand for the current holiday season, inventory can be prepared accordingly. The best-selling and highest-demand products for that particular season can be stocked in high amounts while low-demand products can be stored in lower numbers. This helps businesses alleviate risks that stem from overordering and underordering and can also reduce costs associated with inventory management. This also makes the sorting and picking of products easier and faster to increase fulfillment speeds. Store Products Closer to Customers While many retailers who have limited resources don’t have access to fulfillment centers across the country, others, especially those that have partnered with 3PL fulfillment companies, can make use of nationwide networks of fulfillment centers and warehouses so they can choose where they want to store certain products according to their demand. These products can be stored in close proximity to the customers that are purchasing the most in order to reduce travel distance and time to those customers. Note Important Deadlines Important deadlines pertaining to the logistics strategy should be noted by retailers so that they can be reminded to make the necessary arrangements for those deadlines. Important events in the logistical process for the holiday season include picking, packing and shipping customer orders, reordering inventory to avoid stockouts, adding and removing discounts depending on the length of various promotions and receiving orders from manufacturers, among many others. Planning in advance is imperative for the success of the logistics strategy. Pay Attention to Returns Management A big factor in the logistics process, especially during the festive season is returns management, also known as reverse logistics. eCommerce companies need to include provisions for returns management in their logistics strategy because customers are extremely choosy these days and if a small aspect of their purchase experience isn’t as per their preference, there will be a risk of them initiating an RTO. Because of the increased demand of the holiday season, there are bound to be increased returns as well which retailers need to account for so that they can maintain customer satisfaction while also preventing costs from skyrocketing. Partner With a 3PL 3PL companies can be a very useful tool for most retailers to frame their logistics strategy, especially during the holiday season and especially for small and mid-sized businesses that don’t have access to their own resources and technology. These companies come armed with a host of advanced facilities and technology that will enable eCommerce sellers to enhance the experience they are able to deliver to their customers, while also obtaining a competitive edge in certain areas such as providing same-day delivery, assessing their inventory data through a WMS and much more. Use Custom Packaging By Using custom packaging, orders can be packed into containers that are made precisely for them instead of trying to fit them in generic containers that can either be too loose so that they can wobble around and receive damage or too tight so that they constantly rub against the container and can warrant concern from customers when they open it. Custom packaging not only enhances the brand's image but also ensures that the product is secure during transit until it is delivered to the customer, which can increase satisfaction and delivery speed and reduce the rate of returns. Provide Ultra-Fast Delivery Ultra-fast delivery is a must for retailers that want to compete in an ever-expanding eCommerce space. It is perceived more as a right than a privilege by consumers so sellers that don’t offer it are constantly subject to cart abandonments and negative feedback. By including ultra-fast delivery in their logistics strategy, firms not only provide a positive fulfillment experience to their customers but can also fulfill more orders in a shorter period of time thanks to the reduced delivery time of each order. Offer Premium Customer Support Logistics is important for delivering orders to customers but is also the phase where many things can go wrong such as delays, breakages and theft. Therefore, an efficient logistics strategy necessitates the provision of premium customer support and order tracking facilities so that customers will always be informed about the whereabouts of their order and can inquire and get answers seamlessly and quickly so that they can be reassured.  Create a Budget By creating a budget while planning their logistics strategy, retailers can discern what processes are essential and where they can cut down costs. Budgeting is crucial, especially during the holiday season when costs can easily increase without much knowledge. Having a budget in place means that every process will have a cap on how much is allotted to it so if there is a risk of any operation going over budget, a call can be taken as to how to reduce it. Conclusion: Take Advantage of WareIQ’s Fulfillment and Logistics Services Logistics is extremely important as it is the means by which eCommerce business are able to order, deliver and transport goods from one location to another until it is finally delivered to the customer. For this reason, it is essential that firms come up with an effective logistics strategy as per their business objectives and requirements. It greatly helps in speeding up and streamlining processes and reducing costs. If you are an eCommerce retailer and need assistance with the logistical aspect of your business or any other eCommerce-related service, you can consider employing WareIQ’s offerings. WareIQ is a rapidly-growing eCommerce company that is based in India and provides solutions for all things eCommerce. We make use of an advanced technology platform to provide a seamless experience to our users and their customers. By offering unique features such as a custom WMS that can provide real-time inventory updates across multiple fulfillment centers and 20 plus eCommerce marketplaces, an app store that has a catalogue of multiple apps to increase productivity in different areas, an RTO shield that provides insurance and protects retailers from returns-related costs, a pan-India network of fulfillment centers and dark stores with intelligent inventory placement to store your products closer to your customers and a partnership with more than 12 of the largest shipping companies in the country to assign the fastest and most economical option for every order, WareIQ can help you frame and implement your logistics strategy as per your goals and requirements. Fulfillment and Logistics Strategy: FAQs

July 28, 2022
An Ultimate Guide To Monitor Supply Chain Metrics & KPIs And Effective Ways On How To Improve Supply Chain Performance in 2025

An Ultimate Guide To Monitor Supply Chain Metrics & KPIs And Effective Ways On How To Improve Supply Chain Performance in 2025

The supply chain, an ever-evolving ecosystem that ensures that goods or services are delivered from a supplier to a client or consumer smoothly, efficiently, and consistently, is the foundation of any contemporary organization. Your business will struggle to expand if your supply chain is disorganized, unfocused, or inefficient. Because of this, it's crucial to carefully track and improve the essential supply chain metrics and key performance indicators(KPIs). You may establish reliable standards for a variety of crucial procedures and actions with the aid of supply chain metrics. Additionally, by utilizing the appropriate KPIs, you may increase the productivity, intelligence, and eventually profitability of your company. In this article, we will cover essential supply chain performance metrics that you should track for improved logistics processes also how to improve supply chain performance while maximizing the value of your business. But first, let's start with the basic definition. What are Supply Chain Metrics? Supply chain metrics are developed by creating specified characteristics to quantify and characterize supply chain performance. For example, the measurements may be applied to the inventory-to-sales ratio, inventory accuracy, and turnover measures. Supply chain metrics are essential resources at your disposal for ensuring the ongoing expansion, evolution, success, and growth of your company's supply, fulfilment, and delivery activities. You will be able to identify inefficiencies within your ecosystem, capitalize on your present strengths, and set goals that will help your supply chain expand with the success of your business by gathering, curating, and analyzing critical supply chain metrics. What Should You be Looking for in Supply Chain KPIs? Even though there are many distinct metrics you may monitor and measure, you'll often be focusing on one of three things: Time Measuring how long something takes or the efficiency of a process in a time context is simple. For example, you may track lead times, the proportion of on-time deliveries, or the typical time it takes your accounts payable personnel to fulfil a purchase order. Quality The definition of quality can vary. But once you've established a baseline, it's simple to gauge. For instance, you may track your return rate, customer satisfaction levels, or the frequency with which customers report receiving defective items. ‍Cost For most of us, measuring things in terms of price is typical. But in a supply chain setting, financial supply chain KPIs go beyond the price of the products your procurement team is sourcing. For example, you may track your cash flow, expenditures associated with your inventory levels, cost of products sold to excess inventory on hand, and many other things. How to Define Effective Supply Chain KPIs? A decent performance metric is to improve your supply chain performance. Therefore, all of your KPIs should be: Simple To Comprehend Your manager and the procurement team should be able to grasp your measurement goals and the data's implications. Quantitative Measuring something has little value if you can't quantify it with a number or another metric. Metrics That Matters To You What significant metrics can you utilize to enhance your supply chain? Try to resist being sucked into data analysis just for the sake of it. Instead, analyze and focus on metrics important for your business from the growth point of view. Directive To Improve Supply Chain Performance The best KPIs clarify what action you need to take, which is a directive toward optimal practice. However, it would help if you ensured that improving one area doesn't harm another. For instance, you could desire to shorten lead times, but could this affect the accuracy of your deliveries or the calibre of your goods? Ensure that your goal metrics are interconnected so you can constantly see the effects of your activities. Convenient To Collect Simple metrics are the best ones to gather since they are the easiest. And it's much better if you can see things in real-time using a computerized dashboard or other comparable software. Obtain Clear Understandings of Your Objectives   Establish your goals before selecting your metrics. What particular results do you want to get from monitoring your supply chain KPIs?‍ Say you want to, for instance, Optimize supply chain systems  Boost your client satisfaction Reduce delivery times  Maximize productivity throughout your supply chain. Decrease unsatisfactory orders to boost revenue growth‍ You choose what to concentrate on to determine the relevant KPIs to measure; to achieve these, you must first put together a number of headline targets.‍ Also, remember that you may select goals and metrics that concentrate on the efficiency of your whole supply chain or a particular node. [contactus_lilgoodness] Why are Supply Chain Performance Metrics Important? For various reasons, your business's essential fulfilment and logistics strategy must consider supply chain metrics. First, studies predict that the supply chain analytics market will grow to $16.82 billion by 2027. This is because using analytics to supply chain decision-making enables organizations to boost their tactical, strategic, and operational effectiveness. The key advantages of tracking supply chain metrics for improving management are listed below: Enhanced Communications Communication is essential to a successful supply chain. Every gear in the supply chain machine will become smoother, more efficient, and more dependable if everyone participating in the process has a greater awareness of their position and access to the metrics needed to optimize their potential. Supply chain metrics offer uniform access to essential data. This type will enhance coordination, foster teamwork, and guarantee that your inventory is efficiently handled as each item successfully makes its way from your warehouse to the intended recipient. Targeted Data & Supply Chain Insights  Fulfilment procedures may become unnecessarily complex in the information age since many sources, platforms, and touchpoints exist. When you are in charge of busy supply chains, sorting through a never-ending mountain of data soon becomes a battle. However, supply chain KPIs will enable you to narrow your attention to the data that matters. Supply chain-based analytics present what matters in an easily consumable visual style from a single central place. Working with supply chain metrics will not only help you run your logistical operations more effectively but will also allow you to spot hidden trends that will significantly enhance your business or identify any looming problems (gaps in inventory, a lack of inventory, bottlenecks in your delivery processes, etc.) before they become serious problems. Adaptability & Responsiveness Supply chain metrics are essential since they will provide you with all the information you need to be flexible and adaptive constantly. Supply chain management requires complete adaptation in any circumstance. Therefore, you need to be able to correct problems right away. Keep an eye on supply chain metrics to ensure your supply chain is strong as customer needs and the business landscape change. This will help you stand out from the competition. In addition, with the help of target data visualizations you can quickly and confidently assess, supply chain-focused metrics will offer you the knowledge and confidence to make meaningful strategic adjustments to your operations, depending on your environment. You can optimize your supply chain for sustained performance in a cutthroat commercial environment by developing estimates that provide value and making wise decisions under pressure. As a result, your development and profitability will be maximized. 18 Supply Chain Performance Metrics You Should Be Monitoring in 2025 For your firm to thrive in the cutthroat business world of today and boost sales, you need an efficient supply chain. A Deloitte survey found that 79% of businesses with high-performing supply chains have higher revenue growth than the industry average. Monitoring your supply chain metrics (or KPIs), a set of indicators used in quantifying and characterizing the performance of your supply chain, is one technique to assess whether your supply chain performance is sufficient. The following list of 10 essential performance indicators will help you manage your supply chain more effectively in 2025. Delivery Time Delivery time is a key performance indicator (KPI) for supply chains that focuses on enhancing customer service. It calculates how long it takes from when an item is dispatched to when it is delivered to the customer's door. First, the order must be accurately created and returned to its destination at an acceptable time. If not, your clients may negatively view you because nobody likes to wait to receive their supplied items. It makes sense to lower this supply chain management KPI and improve the accuracy of the delivery information provided to customers. For example, saying that the delivery will arrive in 2-3 business days is preferable to 5-8 business days. Additionally, it would be much better for your service if you could indicate the time. You may also provide customized delivery services to speed up delivery and assess how this affects customer satisfaction over time. Even better, track it more carefully by including supply delivery indicators in your supply chain-focused performance dashboard. Cash to Cash Time Cycle  This invaluable supply chain metric will enable you to determine how long it will take to convert your resources into actual cash flows. The cash-to-cash time cycle uses three key ratios: days of inventory (DOI), days of payables (DOP), and days of receivables (DOR). KPI depicts the time needed between when a company pays its suppliers and when it gets cash from its clients. The shorter the conversion cycle, the better, and this invaluable supply chain data can help you decide how to run your business with less money dedicated to operations. Inventory Movement The number of times a company's whole inventory has been sold over a specific time period is one of the most beneficial supply chain KPIs accessible today. This is an excellent sign of effective production planning, process strategy, fulfilment skills, and marketing and sales management. You can develop a straightforward management reporting practice, understand where you stand, and take the necessary action to improve it over time by calculating your on-time shipping rate and comparing it to other companies in your industry. This will result in an increased bottom line as well as a boost to your brand authority. Gross Margin Return On Investment (GMROI) Even though GMROI is one of the most crucial metrics you can utilize in your shop, it may be a little scary. It reveals how hard your inventory is working to generate revenues for you. A crucial statistic for safeguarding your cash flow is GMROI. Many shops safeguard their margins, which is crucial, but keep in mind that you can survive without earnings for a time. Without financial flow, you cannot survive. Although some of your merchandise turns slowly, it generates excellent profits. Some businesses will flip swiftly but with minimal profitability. These two scenarios will result in decent to high GMROI. A product's low GMROI indicates whether it moves too slowly, has inadequate margin, or both. Fortunately, you can evaluate product performance using the GMROI calculation. Absolute Order Rate This specific information is one of the most crucial supply chain KPIs for companies across various industries. The capacity to fulfil orders without incident is measured by your perfect order rate, which will eventually assist you in resolving problems like errors, damages, delays, and inventory losses. The ideal order rate is a KPI that should be increased as it directly affects your customer loyalty and retention rates. Day's Sales Outstanding (DSO) The day's outstanding sales KPI gauges how quickly you can collect money from consumers or make money. A low or healthy DSO figure indicates that a company collects its accounts receivable in fewer days. A greater DSO level means a business sells its goods to clients on credit and takes longer to get paid, which can impede cash flow and reduce overall earnings. Calculating this often will enable you to collect income more quickly and effectively, ultimately helping to increase your bottom line. Cycle Time for the Supply Chain The time it would take to complete a customer's order if all inventory levels were zero when the order was made is measured by the supply chain cycle time, a comprehensive statistic. The total of the longest lag times for each phase of the supply chain cycle makes up this measure. This statistic is an excellent gauge of how well your supply chain works. A shorter cycle indicates greater adaptability, agility, and responsiveness to external changes in the process. In addition, supply chain cycle time tracking reveals current or anticipated issues, allowing your company to take appropriate action. Customer Order Cycle Time The period of time between when a client puts order and when they get it is known as the customer order cycle time. A short wait time excites clients and shows that your supply chain is highly effective; thus, your company should strive to maintain the customer order cycle time as low as feasible. Customer order cycle time may be significantly decreased by automatically sending each order to the fulfilment facility closest to its final destination. Shortening the cycle could also be achieved by accelerating backend processes, simplifying SOPs for warehouse management and reviewing shipping carrier performance. Fill Rate The percentage of client demand satisfied through stock availability, without backorders or missed sales, is known as the fill rate or demand satisfaction rate. Understanding your fill rate is crucial because it indicates the sales that, with improved inventory efficiency, you may provide better service. Access to inventory data is one way to improve. You and your sales staff will be better equipped to ship accurate, complete, and on-time orders, increasing customer satisfaction along the way, the better informed you are about the inventory that is now available. According to research, strengthening the bond between a store and a supplier may increase fill rates by 80%. Enhancing reactions to demand spikes, speeding up price-change discussions, simplifying order management procedures, and altering motivations for sales. Warehousing Costs The cost of storage is the next element on our list of supply chain metrics. Building a solid supply chain requires careful cost distribution and managing your inventory's time and space. Even if these prices vary from warehouse to warehouse, it's crucial to track this indication and examine it frequently to spot possibilities and cut unnecessary expenses. Managing the warehouse facility involves paying for various expenses, including personnel, warehouse rent, electricity, equipment, material, information processing system, and procuring and keeping the items. Being well-informed about all the operations at the warehouse facility and how precisely it runs is the first step in keeping costs as low as possible. In this manner, you will have a more significant opportunity to cut back on needless expenses, implement measures to manage operations more effectively and make required adjustments. Additionally, you will be able to depend on your reports and make quicker, more accurate business decisions if you regularly gather your information with a professional online reporting tool. Cost of Shipping per Unit Freight cost per unit is evidence that metrics in supply chain management are essential for achieving long-term gains. Freight cost per unit, one of the most crucial supply chain KPIs for any expanding organization, will provide you with a clear understanding of how cheaply you can send your goods. This specific feature to the supply chain metrics dashboard will calculate your total freight expenses and split them by the number of products transported. This measure can be computed using any suitable unit for your company. However, any drawn-out or ill-thought-out procedures will cost you time, money, and client loyalty. This KPI will assist you in avoiding such challenges. Average delivery Time The number of days from the moment an item is dispatched out of your fulfilment centre and the time it reaches a customer's doorstep is known as the average delivery time. This is a crucial indicator to monitor since it reveals the shipment speed of a company. Online buyers increasingly demand a speedy turnaround time on their goods due to the growth of 2-day delivery. Although expedited shipping reduces the time between orders, it might be too expensive for smaller firms to rely on over the long run. As a result, many e-commerce companies decide to cut the average delivery time by carefully positioning some of their inventory near the final consumers. Cycle Time For Pick and Pack By breaking down your supply chain cycle into individual lines, this supply chain performance assessment will provide you with a precise indication of how effective (or ineffective) the overall supply chain cycle is. For example, the duration between when an employee takes an item from the shelf and when the picking and packaging procedure is finished is measured by each KPI. It will be obvious where delays or vulnerabilities exist in your supply chain once you've established your goals and begun monitoring the progress of your supply chain cycle. Consequently, you may take focused action to stop these problems in their tracks, reducing your total cycle durations. Ratio Of Inventory To Sales Since inventory is one of the most crucial tools in your supply chain, the inventory to sales ratio is one of the essential supply chain metrics that must be monitored. This statistic calculates a balance between the amount of merchandise available for sale and the actual amount sold. It will also let you know how successful your business handles unforeseen circumstances and assist you in adjusting your goods to achieve high margins. Here, the key idea is that maintaining a healthy ratio requires understanding how to balance it correctly. Since it could affect your inventory turnover rates, limiting the proportion from being too high would make sense. Finding the right balance in this situation is crucial. You may create an interactive inventory KPI with a contemporary dashboard builder, which will refresh the data automatically and allow you to track performance in real-time. Additionally, you can modify your future initiatives and guarantee that the ratio is ideal for your particular firm. Inventory Velocity Inventory velocity is among the most crucial supply chain KPIs that visually represents the proportion of inventory anticipated for consumption over the following month or quarter. Inventory Velocity is a supply chain metric that will assist you in optimizing your inventory levels, increase your likelihood of satisfying customer demand, and save you from losing money on overstock levels of stock. It is computed by subtracting the opening stock from the anticipated sales for the next period. Return Ground The return reason supply chain metrics provide a keen understanding of the numerous factors that influence your consumers and clients to return their products, which is vital knowledge for an eCommerce fulfilment company's continued success. You will be able to assess your areas of weakness, evaluate the quality of crucial supply chain process areas, and make the kinds of improvements that will significantly improve not only your reputation but also your overall level of service thanks to the information being presented in an easily digestible pie chart-style format with a key showcasing the main reasons for return. Furthermore, you have a significant probability of lowering returns, increasing profits, and enhancing cash flow due to attaining this degree of information. Supply Chain Costs One of the key performance indicators for the supply chain is cost, which displays pertinent expenses related to supply chain management. These expenses, which reflect how various productive departments of the business are, might include those for planning, managing teams, sourcing, delivering, etc. Of course, any firm must find ways to boost profits, and cutting expenses is one tactic that is frequently used. In this method, the business may determine if there is room for progress without also needing to boost sales.  However, it's crucial to consider how the cost decrease would affect the whole supply chain. Supply Chain Costs vs Sales Additional cost analysis related to sales is included in our list of KPIs and indicators for the supply chain. Essentially, this indicator will show you how much you are spending in relation to your overall spending by calculating your supply chain expenses as a percentage of sales. These supply chain management indicators will enable you to conduct a thorough expenditure analysis and set up procedures for possible cost reductions. Of course, cost reduction is a critical component of supply chain optimization. Still, as we've already discussed, it's crucial to make cost reductions where they make sense rather than just doing it to lower the numbers. The explanation is straightforward: the entire procedure is useless if you reduce costs only to see them rise in another area of your supply chain. 4 Effective Ways To Improve Supply Chain Performance Understanding how to improve supply chain performance has become essential for ensuring the effectiveness of diverse operations in today's fast-paced organizations and industries. Since businesses and industries need a lot of raw materials and supplies to make a wide range of goods, it is crucial to maintain a stable supply chain to keep everything going smoothly. Maximal profitability and faster processing and production times are guaranteed by tracking the most efficient supply chain metrics. In addition, you would be able to identify the ideal ways to raise the effectiveness of your operations while discovering fresh approaches to innovation and creating new tactics and procedures for future advancement. In the context of this, here is the following practical advice that will help to improve supply chain performance. Keep Track Of All Your Supplies An essential component of supply chain management is inventory management, which enables you to keep track of all the materials entering your business or sector. This is crucial, especially when controlling all the required materials' supply costs, delivery dates, and logistical needs. Since most inventory management systems today are not fully automated, there is an opportunity for a more elaborate and thorough approach that would allow you to keep track of everything and give customers additional details about the products you have on hand. You can guarantee that everything will be handled correctly and on schedule by creating a system that maintains track of all your supplies. Utilize Automated Systems Automation is currently used in procedures like inventory management to increase overall efficiency; therefore, applying this technology to other processes may also be quite advantageous. Automation has emerged as one of the best options for many firms and sectors. Offering the essential equipments for quick production may expedite procedures and activities. In addition, utilizing automated digital platforms for supply chain management can increase productivity and let you create fresh approaches and solutions. Automation has been used in many organizations to simplify the work completed, eliminating the need for repetitive chores and allowing more staff to concentrate on doing more essential tasks. Expand and Improve Distribution Network Growing your distribution networks may also enhance your supply chain performance efficiency. Partnerships with suppliers and distributors have considerably helped supply chain and logistics organizations, offering improved delivery procedures and additional transportation possibilities. Optimizing your supply chain networks is also crucial; it enhances employee teamwork and communication, monitors automated systems, and ensures that everything runs according to schedule. In addition, solutions would be helpful in the long run because your distribution network is essential for developing a successful supply chain management system. You can read more on how to keep track of distribution metrics for eCommerce growth. Utilize Your Supply Chain Metrics Since information is the foundation of all future discoveries and improvements, data has emerged as one of the most crucial resources in every business or sector. Because this information may be utilized to enhance supply chain performance, data analytics is an essential component. For example, this information may track the number of goods you need to supply and receive, examine your spending and budget, and keep tabs on overall performance. Numerous platforms give comprehensive data analytics solutions, so you might apply these apps within your business to have a complete supply chain metrics framework that lets you access data from anywhere. Over the past several years, businesses and industries have become more data-centric; thus, using these technologies to offer the finest solutions and strategies for long-term success is ideal. Conclusion Maintaining your supply chain's effectiveness is essential for maintaining customer happiness and gaining a competitive edge. However, tracking many supply chain metrics may rapidly become unmanageable, so focus on a handful that is important to your business's bottom line. Partner with a third-party logistics provider if you lack the time or resources to manage and evaluate your supply chain metrics. 3PL offers the equipment and know-how required to track your supply chain KPIs and enhance your business operations. Utilizing WareIQ's Services Helps Improve Supply Chain Performance As a partner in tech-enabled logistics, WareIQ possesses the infrastructure and technology required for companies to monitor and enhance supply chain KPIs throughout their entire supply chain. With the aid of WareIQ's inventory management software, you can remotely manage inventory, keep an eye on essential data, and have inventory control without the hassle of self-storage. You can manage inventory levels and turnover using WareIQ's dashboard, trace your inventory through supply chain metrics, and get the data you need to compute GMROI. WareIQ's quick and precise order fulfilment services expedite the supply chain without compromising quality when orders come in. This enhances the fill rate, perfect order rate, and order cycle time, which can be tracked through your analytics dashboard. Our network enables businesses to provide services comparable to Amazon Prime. In addition, WareIQ's 2-Days express delivery network and fulfilment services help you to decrease your average delivery time while increasing your on-time and damage-free delivery rates when it comes time to send goods. It is now simpler than ever for your company to measure, evaluate, and fulfil your KPIs thanks to WareIQ's software and support capabilities, which also assist eCommerce organizations in reducing supply chain expenses and increasing efficiency. [signup] Frequently Asked Questions

July 27, 2022
Fill Rate in Supply Chain: A Comprehensive Guide Including Types, Calculation, Importance and Tactics to Maintain the Fill Rate in 2025

Fill Rate in Supply Chain: A Comprehensive Guide Including Types, Calculation, Importance and Tactics to Maintain the Fill Rate in 2025

Running an eCommerce business has been very competitive since the majority of people now have access to the internet. Each and every website claims to give you a variety of products in the shortest period of time. Due to this, customer expectations have increased in recent years. Any eCommerce firm must have an effective fulfillment process to succeed in a world where customers expect their products to arrive quickly. You cannot afford to have delivery delays brought on by backorders and stockouts if your eCommerce firm is expanding. In order to increase order fulfillment and improve delivery times, the order filling process needs to be carefully watched and successfully optimized. For this reason, fulfillment rate is a crucial metric that eCommerce companies should monitor. The fill rate is directly proportional to the deal an eCommerce company makes with a customer and the revenue it generates from it.  In this blog, we will go into detail about the fill rates in supply chain management, how to calculate it, the importance of maintaining a good fulfillment rate and why choosing a 3PL logistics company is important. What is Fill Rate? Fill rate or order fulfillment rate, is the rate of orders a seller can ship from their available inventory without missing out on purchases due to stockouts, backorders, lost sales, etc. It shows the level of eCommerce management a seller is versed with and whether they are able to meet the demand or fail to fulfill orders. It also helps sellers gauge the demand for various SKUs in their inventory and plan item procurement accordingly. [contactus_gynoveda] Types of Fill Rate While the order fill rate is frequently the metric that most businesses track, there are other fulfillment rates in supply chain management that might provide useful information about how effectively a business' supply chain management is working. They are as follows: Order Fill Rate The order fill rate is frequently tracked because it shows how effectively businesses can meet their buyers' needs. High order fulfillment rates are a sign of a company's ability to fulfill placed orders effectively and on time. Case Fill Rate The percentage of product cases a seller initially ships out of all the product cases the company orders is known as the case fill rate. It is mostly applicable to distributors and wholesalers. Line Fill Rate The percentage of order lines that a company fills out on the bill compared to the total number of order lines is known as the line fulfillment rate. On an order bill, companies keep track of sales made from customer orders as line items.  Vendor Fill Rate Companies that buy products from vendors in wholesale quantities calculate vendor fill rate. This metric identifies the proportion of vendors who have shipped out orders out of all the vendors a company receives orders from. Warehouse Fill Rate The order fill rate is measured using the same metric as the warehouse fill rate. Managers of supply chains determine what portion of all customer orders are filled and shipped from their company's warehouse, which is known as the warehouse fulfillment rate. Importance of Fill Rate The key to optimizing your wholesale inventory management, fulfillment procedures and enhancing customer satisfaction is knowing how well you can satisfy demand. Helps in Brand Positioning When your business consistently completes customer orders and maintains a high fill rate, it enhances its reputation, builds market trust and ultimately leads to positive positioning. This is due to the likelihood that clients will believe they can depend on your business to rapidly process and ship their orders. When first-time clients enjoy the ordering and delivery experience with your business, they are also more inclined to make subsequent purchases. Affects Customer Relations Do you meet and take care of your customers' requirements right away or do you make them wait? Or have you established yourself as a dependable partner prepared to meet the demands of the market? Your credibility and the accessibility of your goods are important determinants of the development of enduring relationships with your partners and clients and result in increased levels of loyalty. The relationship of trust in a business is built by fulfilling what you claim to. Provides Operational Insight Your business may assess how well the supply chain processes are doing by monitoring order, warehouse, and vendor fulfillment rates. Lower fill rates can provide more information about the areas of the process that need improvement and when a seller is aware of this indicator, it can build plans more effectively. You need to examine the strategies you employ to deliver your products to customers by measuring the fulfillment rate. Enhances Inventory and Labour Management If your fill rate is constantly low, then make sure you are keeping ideal stock levels by searching for other suppliers or reviewing your reorder point. It helps you to scrutinize your fulfillment process and the team managing it. Having adequate inventory means that, although you face a consistently low fulfillment rate in a certain location, it may be a problem with the management and so you can check and resolve it.  Upgrades Fulfillment Processes Your capacity to complete orders on schedule may be significantly impacted by an ineffective packing or shipping process. If your fill rate is poor because of packing or shipping problems, you should look into ways you can streamline your fulfillment processes. How is the Fill Rate Calculated? The steps below show you, how to find the fill rate of your company: Calculate the Total Number of Orders That Have Been Shipped Choose the time period for the fill rate measurement before using the below formula. This calculation, which you may perform on a monthly, weekly, quarterly or even annual basis, allows you to assess how well your company completes customer orders at various points of the year. Consider the situation where you wish to calculate the fill rate for the most recent quarter. Find out how many orders in total your business shipped to customers during that time. If during that quarter, clients placed 1,500 orders, use this number in the formula: Hence, the fill rate is calculated as; Fill Rate = (1,500 Shipped Orders) / (Total Orders) x 100. Divide Shipped Orders By the Total Number of Filled Orders Find out how many orders customers made overall during the period. Using the example value of 1,500 total fulfilled orders, assume that customers placed a total of 1,700 orders. Put the values in the given formula: Fill Rate = (1,500 Orders Shipped) / (1,700) x 100 = (0.88) x 100 = 88 Multiply Your Result by 100 You will get a value in a decimal after dividing. To convert this value from decimal to percentage form, multiply it by 100. The fill rate is always represented by a percentage. The fill rate would be as follows using the example numbers of 1,500 completed orders out of 1,700 total client orders for the quarter. Fill Rate = (0.88) x 100 = 88% The fill rate in the above case is 88%. Depending on the business, this can be a good fill rate. For instance, a company would have improved its fulfillment rate over their past rates if it increased it to 88% from a lower percentage. Your company's customer satisfaction rate will be as high as your fill rate and should be close to 100%. What is a Standard Fill Rate and How to Increase it? A standard fill rate varies for each seller depending upon the offered product, selling platform, fulfillment type and company fulfilling it, in addition to location, demand, season, etc. 85-95% is generally considered as a good fulfillment rate. There are a few ways to increase and maintain it: Choose a Trustable and Capable Fulfillment Partner To increase the fill rate, fulfillment partners are one of the more crucial elements to rely on. An incompetent fulfillment system can never achieve a good fill rate. It is robust work to perform without any delays and needs to be fully accurate. A third-party fulfillment company ensures competent fulfillment under the guidance of experts, technologies and many more factors running the market.  Provide an Option of Alternative Products It is difficult to offer an alternative if you sell a product that is too specialized. However, in many cases, you can provide options based on your customer's choices and the resources available to you. Your customers will likely choose to try an alternative if they have to wait for you to ship their intended order. Ask Your Sales Representatives Not to Sell Out-of-Stock Products Your team should check the inventory levels and avoid listing and selling such products that are not available, and concentrate on other options if a buyer is looking for similar products. You can add a timer to notify the buyer when it could be available to buy the product again. Invest in Tools for Inventory Optimization and Demand Forecasts SaaS tools created for the purpose of inventory management and increasing your fill rate are not a luxury but rather, a must that adds useful data to your products and accompanies you on your way toward efficient data management. It automatically reorders products by optimizing your data, forecasting demand, defining inventory space, etc. It knows which of your products sell more quickly and easily. It helps you choose the best time to place fresh orders with your suppliers and make up for any shortfalls. Conclusion: The Role of WareIQ in Maintaining Your Fill Rate Why Choose a Third-Party Fulfillment Company Customer expectations are constantly increasing in the eCommerce segment. It is not easy, especially for small and medium-scale sellers. They have problems running their business or tackling other related problems. A seller may struggle to manage a store on multiple selling channels and a vast supply chain. This is only possible through 3PL fulfillment companies. By partnering with these companies, a seller can avail of different types of fulfillment and can easily maintain their fulfillment rate of over 90%. Sellers only have to take care of the selling and marketing aspects of their products. Post getting an order, all the fulfillment processes like sending an order confirmation message or mail, picking, packing, inventory management, assigning a delivery partner, collecting the payment, re-ordering and many more procedures are taken care of by the 3PL. The quickest approach to increase your order fulfillment rate is to work with a 3PL that makes good use of technology. The majority of your eCommerce fulfillment procedures can be automated using advanced software, which interacts with your online store and gives you superior visibility into your inventory management and warehouse operations. Getting a 90% Plus Fill Rate With WareIQ WareIQ is a pioneer fulfillment company that can give customers a fill rate of more than 90% to our customers.  With WareIQ, you get a decentralized multi-warehouse layout that can easily fulfill your orders within the least time and with the least freight expenses. With its AI and ML-based warehouse management system software, you can optimize your sales data, forecast future demand, maintain inventory across multiple fulfillment centers and eCommerce selling platforms, and keep track of each and every item through a single dashboard. Orders are automatically processed by WareIQ so they are swiftly sent to the fulfillment queue, where products are quickly chosen, packed and prepared for shipping. It eliminates the human input, which reduces the possibility of errors and improves order accuracy. All of these elements greatly quicken the order filling process and let you fill more orders at once, resulting in an increased fill rate. Fill Rate Frequently Asked Questions ( FAQs )

July 20, 2022
10 Best 3PL for Small Business in India in 2025

10 Best 3PL for Small Business in India in 2025

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:  Packaging Shipment Inventory Management  Regular Feedback Reverse 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 2025 Stockarea Ekart Logistics India Post Blue Dart Express DTDC Express Ecom Express Shadowfax TCI Express Delhivery GATI 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 2025 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 Delivery Time-defined/Slot-based Delivery Person Specific/Address Specific Delivery Returns Management Product Replacement/Exchange Services Large/Oversize Order Delivery High-value Product Delivery HAZMAT/Dangerous Goods Delivery Real-time Monitoring and Control Consignee Address Validation Fraud Detection Flexible 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 2025? 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 customers Access to all major national & hyperlocal last mile couriers at discounted rates for making same/next day deliveries possible Easy integration across multiple online platforms & marketplaces Horizontal marketplaces: Flipkart, Amazon etc. Vertical marketplaces: Nykaa, Myntra etc. D2C platforms: Shopify, Magento, WooCommerce etc. Social commerce platforms: Bikayi Access to a superior centralised tech platform for eCommerce operations ML-based prediction engine for efficient warehouse network design & smart inventory placement Centralised platform for core fulfilment & shipping operations Post-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 rates Generation of bulk shipping labels & invoices in a few clicks Offering a branded tracking page and sending auto-alerts to inform customers of their shipment status Reduction in RTO % (Return to origin) by automating cases of failed delivery attempts (NDRs) by the shipping partner Preemption of COD frauds through integrated AI engine flagging risky orders Orders management Tracking of orders across the channels Filtering of orders by status Searching for specific orders A 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 action Syncing 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-customers Inventory management Tracking of inventory levels across multiple locations & sales channels – the website and marketplaces Using WareIQ platform to distribute inventory to multiple locations optimizing for speed & cost/order Setting reminders to proactively replenish inventory, bundle products for promotions, make inventory transfer requests, and much more Warehouse management Managing multiple warehouses and offline stores on WareIQ platform 100% inventory accuracy ​​​with scan-based operations Automated reconciliation tool helps to keep track of returns and unsettled invoices Integrations with all major ERP & Accounting systems Fulfilled By Amazon and Prime Status Assured 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)

May 28, 2022
Dropshipping vs 3PL: What is Right for Your Business in 2025?

Dropshipping vs 3PL: What is Right for Your Business in 2025?

As a business owner, it takes a lot more than having the right products and a seamless ordering experience to be successful. The real task begins when the customer makes a purchase. How will the order fulfillment be carried out? In the interest of answering this question, we delve deeper into the top differences between dropshipping vs 3PL fulfillment, in 2025. To make sure that the brand's visibility increases, revenues get generated and more sales take place, SMEs and startups need to ensure that they make the right choice between dropshipping and 3PL fulfillment, for their requirements and ensure that customers experience a quick and smooth delivery process. To make that magic happen, it's important to have a strategy and process in place for order fulfillment. What is Dropshipping Fulfillment and How Does It Work? Dropshipping, also known as consumer direct fulfillment, is a business strategy in which online retailers collaborate with manufacturers or suppliers to distribute products directly to customers (also known as dropshipping products). An eCommerce merchant does not purchase or store an inventory of the products for sale in this arrangement. They offer it on their websites and get it delivered directly to the buyer from their supplier or manufacturing network. The Dropshipping Fulfillment Process eCommerce sellers add products to their online stores Customer orders a product from the online platform of choice where the store is located The customer is invoiced for the product and an additional shipping fee The seller now replicates the order with the manufacturer or supplier network The supplier/manufacturer packages the order and ships it directly to the customer While the seller is responsible for product marketing and customer service, the inventory management, warehouse management, and eCommerce logistics are handled by the manufacturer or wholesale supplier. Dropshipping fulfillment allows retailers and distributors to extend their product offerings without having to increase the amount of inventory they keep on hand. [contactus_lilgoodness] Common Misconceptions about Dropshipping Fulfillment Dropshipping is an order fulfillment model that has gained popularity over the years and has a successful business model. But it is a bit different from order fulfillment & there are some common misconceptions about this fulfillment method that causes sellers to shy away from leveraging it and utilising it to the fullest potential. Some of the common misconceptions of dropshipping are: 1. Dropshipping fulfillment is quick and easy to start No. Dropshipping as a fulfillment model is smart and simple, but it requires a lot of research and networking to enter the competitive market and thrive. Entering the eCommerce business, especially as a new player, requires patience, research, planning, and continuous improvement to stay relevant in the market and earn profits. Before stepping into the dropshipping business, sellers need to: Pick a niche. Investigate the products of competitors. Look for reliable dropshipping companies and build a network. Create an online store and get onto eCommerce platforms like Amazon. Promote the business. Analyze and improve the store's performance. 2. Dropshipping fulfillment does not have any upfront costs To have a successful dropshipping business, it is important to have a great online store and a good online marketing strategy. While the investment may seem lower than setting up a store that requires inventory and storage, there are still significant costs involved to get business visibility and attract customers.  Purchasing a domain and setting up the online store with attractive product pages, browser and device compatibility, responsiveness and live chat support are all key elements to building the brand and improving customer experience. Apart from this, advertising efforts on social media platforms and having good SEO content marketing are also regular expenses that businesses need to account for. Dropshipping fulfillment is only suitable for small-scale businesses. This is not true. Businesses of any scale can follow a dropshipping fulfillment model. SMEs and startups can easily scale their business and have a more streamlined order fulfillment process with dropshipping, but will need a bit more capital to purchase the right products from the supplier network inventory 3. Dropshipping businesses need to be located in the same location as their suppliers No. While many think that the business needs to be located in the same country as their suppliers, dropshipping can be completed from any part of the world. This is an order fulfillment method where global retailers can have an extensive supplier network and serve global customers from any corner of the world. The key here is visibility to the customers and having a reliable manufacturer and supplier network that can fulfill orders efficiently. Dropshipping is a great way for quick and easy sales and profits The eCommerce space is a highly competitive one, especially with all of the digitization taking place. Finding a niche and building a supplier network takes time and effort and business owners need to go through a lot of trial and error to find the right products for the target audience. Research and quality checks are also needed before products are listed in the store and it is important to make sure that there are no fallouts or delayed delivery times. What is 3PL Fulfillment? 3PL Fulfillment companies handle inventories, process orders, and ship items on behalf of other businesses. Business owners can partner with 3PL fulfillment companies to store, package, and ship their products to customers. Outsourcing fulfillment services to a third-party fulfillment logistics company, such as inventory management, monitoring SKU sales performance, forecasting customer demand, packaging and shipping orders, and so on, allows businesses to concentrate on product manufacturing, quality assurance, and customer satisfaction. 3PL Fulfillment Process Businesses manufacture the products or source them from their supplier network Products are sent to the order fulfillment center for storage Customers place an order from an online store or preferred platform Customers are invoiced and order details are shared with the 3PL partner The fulfillment partner processes the order, packages it, and ships it directly to the customer Pros and Cons of 3PL Fulfillment Order fulfillment setbacks for startups and SMEs can harm their business and operational efficiency. As the company grows and attracts customers from all around the world, creating an order fulfillment system in-house gets more difficult. Customer satisfaction and revenues can suffer if the order fulfillment process is inefficient. As a result, the company's reputation is also affected. A third-party order fulfillment partner can assist with inventory management and the end-to-end process of delivering the order to the customer. Pros of 3PL Fulfillment Experts and experienced partners take care of the heavy lifting of order fulfillment. Simplified logistics help business owners concentrate on creating more impactful business outcomes. Scalability and flexible service options to help manage the business and better maintain customer satisfaction. Less expensive shipping with the ability of 3PL partners to manage labour and transportation. Faster delivery to improve customer satisfaction and generate recurring sales. Inventory is stored and managed at fulfillment centers, freeing up the need for additional storage space and inventory management in-house.  Greater connectivity with fulfillment centers being available in multiple locations. This helps improve efficiency, and costs and provides quicker order delivery. Cons of 3PL Fulfillment Inventory is limited to what the business owns. This means monitoring the stock levels, analysing trends, and restocking inventory to avoid shortage. Inventory delivery is the business's responsibility. Third-party logistics partners will not be responsible for replenishing stocks without the business owner having them ready to be inventoried at the fulfillment center. Requires upfront investment to pay for the 3PL services like eCommerce warehousing and 3PL distribution. Bad service from the 3PL partner can affect brand reputation. Not providing a good tracking and delivery experience to the customer can impact sales and customer loyalty. Dropshipping vs 3PL Fulfillment: Why are These Models Important? The dynamics of customer order fulfillment have changed. The days of shopping in stores are long gone. The majority of orders are now placed online. As a result, businesses have had to alter their order management procedures. While some fulfill orders from their stores, offer in-store pickup, or have suppliers ship directly to the consumer, others continue to fulfill orders through their distribution centers (DCs). It is critical to use the correct order fulfillment strategy to boost sales, maintain a positive brand image, and cultivate a loyal client base. Dropshipping vs 3PL Fulfillment: Top Differences [table id=11 /] Dropshipping vs 3PL Fulfillment: Benefits Compared The main advantage of third party fulfillment is that it saves the business a significant amount of time. By outsourcing the order fulfillment process, business owners can invest time in critical business operations like marketing, sales, product design, and so on. Furthermore, businesses can scale by integrating third-party order fulfillment services with platforms such as Shopify, Meesho, Amazon, Flipkart and more. This in turn reduces the order fulfillment time as the eCommerce logistics partner detects and processes new incoming orders. Dropshipping fulfillment allows entrepreneurs to start a business quickly and easily. Since the cost for inventory or storage is limited, the investment required can be focused on improving brand visibility and customer attraction. Dropshipping also provides access to a diverse choice of products as business owners research and build their vendor and supplier network.  Dropshipping vs 3PL Fulfillment: What is Right for Your Business in 2025? The costs of dropshipping fulfillment are low enough for startups and SMEs to begin their eCommerce journey. This can play an important factor when businesses lack the infrastructure for storage and shipment. Dropshipping is a great order fulfillment option for new businesses that Have limited financial resources. The desire to try out new products, markets, or marketing tactics. Do not want to invest in their own warehouse space or employees. For eCommerce stores that sell their own unique products, third party fulfillment is ideal. As long as product customisations are not needed for each consumer, all the business needs to do is send batches to the logistics partner, who will take care of the inventory management, packing, shipping, and delivery. 3PL fulfillment is a great option for businesses that are scaling up and have large daily order volumes. don't have the labour or resources to finish the order fulfillment process in-house. have the sufficient upfront capital to partner with a 3PL provider In most cases, the benefits of 3PL logistics outweigh the cons. Why is WareIQ the Best 3PL Partner in India for eCommerce Sellers? When evaluating order fulfillment approaches, cost, quality, and control should all be considered. The good news is that changing the fulfillment process to meet business requirements is simple for startups and SMEs. Businesses can choose a procedure they trust and work towards developing their brand and consumer base after careful deliberation and assessing the advantages and downsides. After going through the entire article, you would have understood the benefits of outsourcing your fulfillment needs to a 3PL partner over dropshipping. WareIQ with its full-stack eCommerce fulfillment solution can not only help you with the last-mile delivery requirements but also with the entire end-to-end business operations. 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. 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 fulfillment centers, micro fulfillment centers & urban dark stores near their customers Access to all major national & hyperlocal last-mile couriers at discounted rates for making same/next day deliveries possible Easy integration across multiple online platforms & marketplaces Horizontal marketplaces: Flipkart, Amazon, etc. Vertical marketplaces: Nykaa, Myntra, etc. D2C platforms: Shopify, Magento, WooCommerce, etc. Social commerce platforms: Bikayi Access to a superior centralised tech platform for eCommerce operations ML-based prediction engine for efficient warehouse network design & smart inventory placement Centralised platform for core fulfillment & shipping operations Post-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 offerings 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, 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 service 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, 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. [signup] Dropshipping vs 3PL FAQs (Frequently Asked Questions)

May 28, 2022
14 Best Ways to Reduce RTO Charges in eCommerce in 2025

14 Best Ways to Reduce RTO Charges in eCommerce in 2025

Businesses these days are involved in cut-throat competition, mainly on online selling platforms. They try to offer all the services they can to create a better online purchasing experience for their customers. One of them is the return option for buyers. One of the painful realities that online retailers must accept is that there will be customers that seek to return their orders. In order to reduce RTO frequencies, sellers employ a variety of tactics. If a retailer wants to be profitable in the eCommerce space, they need to reduce RTO costs. If not, their profit margins will fall or it may also start creating difficult scenarios. It is widely known that it’s impossible to reduce RTO requests to zero but taking care of a few things can optimize and reduce RTO charges to a certain extent. To achieve significant RTO reduction, you need to first understand it in detail. What is RTO or Return to Origin? The term return-to-origin or RTO is often used in the eCommerce industry. The initiation of the return of a product and its return to the seller's warehouse is referred to as RTO. A package may be returned to the vendor for various reasons. An eCommerce business will incur more costs as a result of this. Setting strategies to reduce RTO costs is vital for the business to maintain its profit margins and not incur extra costs. [contactus_lilgoodness] What is RTO Related Costs? When an online seller or selling channel provides the facility of free shipping, they add the shipping charges to the final selling price of the product. In certain cases where the sale is done but the product is in the process of being returned, all costs associated with the returns process are known as RTO-related costs. For a seller, RTO reduction equals higher profitability. Let us understand the different RTO related costs and how to achieve RTO reduction. Charges for the Shipment to be Delivered and Returned Product delivery is chargeable for sellers, which they account for in the final selling price. If an RTO is initiated, it costs the seller twice the amount which they will not make back during the sale. Therefore, sellers need to find ways to reduce RTO costs. Costs for Repackaging Products are packed after picking them from the shelves of a warehouse, godown, or fulfillment center. Products are customized with multi-layer packaging and the invoices are posted on the outer packet which includes the receiver's address, barcodes, order number, etc. In the event of an RTO, this packaging needs to be removed and put back in the inventory. Later when the same item is ordered again by another customer the seller needs to pack it again. Thus, sellers need to find ways to reduce RTO packaging costs. Cost Incurred due to Product Damage Through online selling, order fulfillment is done by achieved by traveling large distances. These products are picked up and kept with hundreds of other products, which could cause damage if they are not placed in a proper manner. This could result in an initiation of RTO because of product damage before it has even reached the buyer. Companies need to analyse how to reduce RTO caused by product damage. Costs During Handling of Recalled Inventory Storing and managing inventory carrying costs a huge amount of money to a seller. Holding a product for a while can proportionately increase the cost, to the amount of time and addition of new products being added. Sellers seek to reduce RTO storage costs by investing in better inventory management facilities. Costs Incurred due to Expiration The passing time makes a lot of products redundant. Christmas trees are mostly sold during the Christmas season. It applies for most festive seasons so if the product is delayed in transit, it may lose its importance and value due to which a seller will have to store it for a long period which may result in it becoming old-fashioned and irrelevant. Practices That Can Help Sellers for RTO Reduction You can have the best products and most efficient eCommerce fulfillment strategy but you will still get RTO requests. RTO reduction can be achieved but it can never be entirely mitigated. To reduce RTO charges, sellers can keep a few things in mind: Store Inventory Near High Traffic Order Placement Locations: It will not only help a seller in saving shipment charges but also reduce RTO costs as distances to fulfill orders will decrease. Covering less distance is also effective in terms of limiting product damage. Choose Logistics Partners with Competitive Freight Rates: Freight rates in the supply chain matter a lot. Dynamic increases in fuel prices, and not using optimized vehicles can double the freight rate. If your logistics partner offers cost-effective rates, it can reduce RTO charges. Opt for RTO Insurance: This is a recent concept where eCommerce logistics companies and fulfillment companies give sellers an option of RTO insurance. If an RTO occurs, these fulfillment companies will bear the cost instead of the retailer, resulting in an RTO reduction. Choose a Third-party Fulfillment Partner: Third Party fulfillment companies give all-in-one solutions to a seller. It stores your inventory at the best location with high order traffic at the cheapest freight rates, provides individual buyer RTO rates, gives the option of RTO insurance, and provides facilities like RTO shields. All these factors can reduce RTO costs. How to Reduce RTO Charges & Frequency in eCommerce? 14 Proven Ways in 2025 To make your business more profitable, you can apply some tricks to reduce RTO charges. These tested tricks will help you reduce RTO in the year 2025: Optimize Product Descriptions In online selling, people always complain about the difference between a product’s appearance on the website versus reality. When a customer buys a product, they read the product descriptions to get an exact idea of the product. So try to write a good description of the products with accurate facts and figures about their features and dimensions. Provide Order Tracking Many times, ordered products are not received by a buyer because the buyer is not present at the location. If the seller provides order tracking and order scheduling facilities, the buyer can plan and receive it accordingly. Offer Multiple Modes of Payment These days, people are more reliant on UPI or card payments. So if the placed order is COD and the receiving person does not have cash (higher chance in the case of expensive products), the delivery partner should have multiple options of payment available. Convert Returns/Refunds into Exchanges If the seller turns the returns into exchanges, a buyer who often requests for RTOs will have to receive the parcel or they will not get the paid amount. In the case of COD, they can be noted and deprived of the COD option in the future. Check Customer Availability Before Attempting Delivery Most of the time, last mile delivery partners deliver products during the day which may be working hours for the buyer and they may not be present at the given location. So for the delivery, the delivery partner can first check the availability of the customer and schedule a time or change location after verifying the details. This will reduce RTO frequencies significantly. Alert for Consumers with High Initiation of RTOs These days with the help of technology and software, sellers have options to get the numbers of RTO frequency of individual buyers. If a person has a high rate of RTO requests, a seller could ban or restrict them from placing certain orders. Locations are also blacklisted by a few selling platforms as per bad fulfillment experiences. Offer Faster Shipping (Same/Next-Day Shipping) When a buyer orders a product, they expect to get it as soon as possible. They may find some other way to obtain it sooner or buy it from an offline market and when the order finally arrives, an RTO request gets sent. So, a seller should ensure to deliver products on the same day or the next day after the order has been confirmed to reduce RTO requests. Offer a Branded Post-Shipping Experience When a buyer reads the feedback about certain products and brands, they invariably find some feedback related to a bad delivery experience. Chances are that many customers may not have received their orders due to similar problems. The solution to reducing these kinds of RTO requests is to provide a branded shipping experience to your customers. Pick and pack it nicely, send confirmation messages, Message them the tracking ID/number, allow buyers to choose a favorable time to receive it and finally ask them to write a review. Reduce Cash on Delivery Losses Data shows COD orders are mostly converted to RTO requests and from a customer's point of view, they don’t want to pay before they get the product. In this scenario, a seller has multiple options to reduce RTO requests: Verification of Shipping Address A seller can verify the shipping address before dispatching the product to a logistics company. In case it is incorrect, which can turn into an RTO request, the seller or the logistics company can instruct the buyer to correct the eCommerce shipping address to achieve a successful delivery. The address can be verified with a address proof documents of the buyer. Profiling of Risky Orders Make a database of risky fulfillment and mark them according to different parameters. Then choose whether you want to give them an option for COD or ask them to pay before the order delivery. Providing Dashboard Analytics Discover indications that contribute to your RTO losses by getting RTO information at a state/city/pincode level. To better understand delinquent behavior and implement the learnings into your business plan, get full-order review reports. This will reduce RTO requests that are fraudulent. Customization of Business Model Learn algorithms, evolve, and localize the learnings over time to continually increase accuracy based on your company's demands. To make it even more flexible, you can create your own flagging rules. Furthermore, blacklist specific persons based on email addresses, phone numbers, and other factors to reduce RTO costs. Automation of Important Processes As your eCommerce firm expands, automation becomes increasingly important. Set up automated workflows to automatically accept or reject red-flagged orders based on risk factors, saving time and money in the process. To maximize your business and decrease operating expenses and reduce RTO charges, automate order confirmations, payment collections, and other operations. Conversion of Risky COD Orders to Prepaid Orders: If there are higher chances of RTO requests with an individual customer, only give them the option to pay before order placement. Prepaid orders result in RTO reduction and if an RTO request still occurs, allow an exchange instead of a refund. Optimizing Website Experiences in 5 Ways to Reduce RTO in eCommerce You may have observed that brand appearance matters a lot in its positioning. In online selling, the appearance of a brand depends upon its website. Websites increase brand value and with good brand value, RTO reduction of a product can be achieved: These are some ways to make your website more effective:   Implement a Return Policy For eCommerce businesses, return policies should be a set of rules created by a retailer or a selling platform to manage returns and exchange unwanted merchandise that a customer has purchased. It should tell the buyers what items can be returned and for what reasons, according to a timeframe over which returns could be initiated. Enhance Product Illumination When a product fails to meet the standards set out on the business’ website, it is a key contributor to product returns. It's disheartening to receive a shipment after waiting weeks for it, just to open it and discover it's not what you expected or required. Ways to reduce RTO requests in this regard are: Create an attention-grabbing headline summary. Summarize the product definition with a bulleted list of key characteristics and features. Use a paragraph to expand on what makes the product unique. Instead of focusing on describing benefits, focus on giving a solution. To persuade the consumer to buy, end with trust, social truths, urgency, and a call to action. Value Consumer Reviews If you have a high number of RTOs then there must be some reason why the majority of customers are not accepting the delivery. You can try to get feedback from the buyer who didn’t accept the delivery or read reviews of buyers who have written about their post-order experience. Read all and then try to provide a solution. Introduce Product Videos If customers are returning items because they don't meet the product description's expectations, you might want to consider adding a video function to your product detail page. Brand films are now a highly effective technique for increasing conversion rates, and reducing RTO requests and more individuals determine that after watching a product commercial, they can better imagine themselves using the product. Provide a Post-Purchase Confirmation Message Sending a post-purchase message(mail) to your customers can be a very effective way to reduce returns. Reduce objections that lead to refunds and keep customers enthused about what they just ordered by informing consumers about the product between order and shipment. Strategies to Decrease RTOs in eCommerce with WareIQ According to a recent study by KPMG, return shipments can make up to 20% of total shipments in e-commerce. This rate climbs to 40% in the case of Cash on delivery (COD) orders. Return to Origin (RTO) is a nightmare for sellers as it significantly increases the logistic costs. RTOs rates are expected to increase even further in India with demand surges in tier 2 and 3 cities. Given the situation, reverse logistics has become an integral part of a business plan. Given the convenience of online shopping and the lack of risk, buyers can frequently return items without second thoughts. RTO logistics become extremely important to decrease this trend as well as the costs involved. The sheer amount of revenue lost by companies through return items is about 20% of the sale, and that’s exactly where WareIQ pitches in to help you save the costs. We optimize your return order logistics and improve overall efficiency with the help of insights derived from customer data, customer retention metrics and return policies. How Does WareIQ Help eCommerce Businesses in Reducing RTOs in 5 Ways? Quick TAT (Turn around time): Logistic partners provide an estimated delivery timeline based on which the customers anticipate the delivery. If it fails to reach them as per this expectation, there is a risk of an RTO and the customer opting to order from a competitor. This also affects the customer retention rate. With WareIQ’s Prime-like shipping, data-driven insights, PAN-India network of warehouses, and excellent supply chain management system, orders reach the customers on time as promised. This ensures a higher rate of First attempt delivery, thus reducing the breach of TAT. Higher and Efficient First Attempt Strike Rate (FASR): Delivery success in the first attempt ensures happy customers and helps in their retention. This is an important metric since lower returns imply lower logistics costs on RTO. With WareIQ’s structured incentive plans, delivery partners are encouraged to deliver maximum shipments in the first attempt thereby increasing the FASR. Improved Non-delivery Report (NDR) conversion: Knowing the customer’s intent before performing the last mile delivery can save a lot of time and costs related to RTOs. This can be achieved by validating the attempted shipments by directly communicating with customers via phone calls, SMS, e-mail, WhatsApp, etc. Any change of preference or cancellation or order can be recorded and shared with the shipping partner in real-time to decide whether to “Reattempt the delivery” or “Make RTO”. Performing this manually at scale is almost impossible. With WareIQ’s innovative solutions, most of it can be automated via IVR (Interactive voice response) calling, auto-SMS, auto-mailer, WhatsApp alerts, etc. This also keeps the customer well informed and creates an impact on improving the delivery conversion percentage. In the auto NDR process, the customer will get an IVR call immediately after a failed delivery or when the NDR remark is updated by the delivery personnel. Automation makes the entire process quick and efficient. Wrong or Incomplete Address: Amidst the huge traffic across the supply chain and sometimes because of consumer ignorance, deliveries often end up attached with wrong or incomplete addresses. This is also one of the major reasons for RTO. Address validation becomes important in this context. WareIQ ensures this authenticity with various checks on the same. This increases the chances of successful delivery. In case of an incorrect address, shipping is cancelled prior to dispatch. It allows not only for lower RTO but also avoids wasteful shipping costs. Automated Partner Pin Code Allocations: With WareIQ’s cutting-edge technology, pin code allocation is automated. This altogether eliminates the hassles of manual allocations thus reducing logistics costs & shipping costs & RTO as well as increasing fulfillment serviceability and speed of delivery. Making changes in allocations is complex and takes a good amount of time. The system analyzes historic RTO percentages and cost per shipment (forward + RTO) to optimize the allocation and ensure that the courier with the lowest possible cost is chosen for the given pin codes. Such efficiency and cost reductions are not possible with manual processes. This also saves a lot of time in processing and shipping the orders. RTO Shield WareIQ's RTO Shield provides eCommerce/D2C firms with a comprehensive checkout strategy to reduce RTO losses and increase revenue. Why WareIQ’s RTO Shield? Request a refund for any RTO order that was predicted to be safe by the company. Smart COD checkout option based on technology to detect problematic customers and save on shipping costs Disable COD for untrustworthy and blacklisted customers automatically. Identification and deletion of duplicate orders Verification of shipping addresses and intelligent shipping selections based on address completeness Benefits of RTO Shield Increase conversions and decrease cart abandonment. The quickest checkout time is under 10 seconds. Identify high RTO risk consumers using data sets from telecom, banks, hyperlocal, and OTT providers. Identify scammers using previous data on their past purchasing behavior and win over them. How Does it Work? Integrate the website/application with WareIQ 3 months of historical data will be needed to train the model to predict accurately. Go live in 3 to 5 days [signup] Reduce RTO FAQs

May 16, 2022
eCommerce Logistics Guide: Definition, Processes, Factors to Evaluate and the 10 Latest Trends of Logistics in eCommerce in 2025

eCommerce Logistics Guide: Definition, Processes, Factors to Evaluate and the 10 Latest Trends of Logistics in eCommerce in 2025

A change in consumer mindset encourages evolution in the way eCommerce retailers plan on serving them. Two years ago, what began as a force majeure became a habit, where customers were able to receive everything that they could possibly think of, right at their doorstep. The answer is vast as to what is logistics for eCommerce. The eCommerce industry’s heavy reliance on a solid supply chain backbone has triggered a revolution in the logistics industry. But what is eCommerce logistics and what are the factors that it encompasses? Let’s take a look. What is eCommerce Logistics? eCommerce Logistics is the complete supply chain process undertaken by an eCommerce company to get their products from the seller or warehouse to the customers and back via reverse logistics if needed. All the proper systems and processes need to be in place for the millions of packages being shipped across the country to multiple different locations daily. eCommerce logistics begins with moving inventory from the origin point and ends at the customer's destination once they take ownership of their order. There are different types of logistics contract logistics, 3PL logistics, and more. [contactus_uth] How Does eCommerce Logistics Work? As mentioned above, eCommerce logistics refers to the entire series of processes, from receiving an online order to the safe delivery of the package to the customer by the estimated date and time. The 2 major processes involved in eCommerce Logistics are listed below: Forward Logistics Inventory Management This process is highly critical to keeping regular track of inventory. While stacking products in the warehouse or fulfillment center, warehouse management should occur where the high-demand products must be kept handy or easily reachable, followed by the goods where their accessibility is in proportion to their demand. eCommerce Logistics companies need to put in measures to ensure the safety and security of the inventory in their warehouses or storage spaces. Smart Inventory Placement Smart inventory placement refers to the automated recommendation of the best storage facility to place your inventory at based on a variety of factors specific to each SKU, such as seasonal demand, proximity to areas of high demand, market trends and more. This allows your inventory to be fulfilled faster and more efficiently every time an order is placed. Order Preparation The next step is to gather the inventory and prepare the final order per the customer’s request. The next step is packaging and labelling. Products are packaged in a single SKU or a kit with several SKUs before being labelled as per their batches and destinations. Many companies have adopted eco-friendly packaging and labelling to lure more aware customers. Shipping Processes Safe and timely delivery of orders is critical to the overall customer experience. This involves updating the customer regularly with the whereabouts of their package and ensuring that there are no errors or delays while shipping or transporting the product to their location. Suggested Read: What are Shipping Labels? Reverse Logistics Returns Management Around one-third of all products bought online are returned to eCommerce companies. The reverse logistics process comes into play when the customer or delivery agent triggers the return request. However, brick-and-mortar stores experience lower returns than online retail as the customers get the look and feel of the product before buying. However, both models employ a different set of logistical procedures to reach the final goal. Value Recovery of Goods This enables you to recover value from returned items by selling them on the secondary market, recycling and upcycling them, donating them and turning them into energy. This ensures that every returned product can fetch some amount of value rather than simply laying idle and eventually becoming obsolete. Disposal of Unusable Items For products that cannot be recovered or resold, they need to be disposed of in a healthy and environmentally conscious way. This involves the sustainable disposal of items for all categories, including food, clothing, electronics, health & hygiene, etc. How Does eCommerce Logistics Differ from Brick and Mortar Logistics?  [table id=15 /] How to Choose the Right Type of eCommerce Logistics for Your Business in 2025? Know Your Requirements An eCommerce business has many requirements for which they need to hire an eCommerce logistics partner. However, shortlisting a 3PL logistics company for eCommerce, the retailer should have an understanding of their own requirements, the services that companies offer that they seek to partner with, and their available budget. An eCommerce company can ascertain which eCommerce logistics company would be the best fit for them through the following points: Customer Demand Per Day: This refers to how many orders the retailer receives in a day and how much they expect to receive in the future. Product Categorization: Grouping products into different categories helps companies better understand their eCommerce shipping requirements. For instance, perishable products require time and temperature-sensitive eCommerce logistics, while glassware demands fragile-safe transportation. Technological Requirements: It is important to understand what technological services you require for daily operations and which companies provide those services.  Staff Requirements: This is determined by the amount of demand and what would be the maximum and minimum operational load. Speed of Order Fulfillment: This depends on the number of orders that need to be fulfilled per day and which parts of the country those orders need to travel to. Storage Space Needed: It is important for businesses to understand the scale of their operations and how much storage space they would need for available, unsold inventory. Find Suitable Partners After assessing all the requirements that are needed in different areas, eCommerce retailers can scout for eCommerce logistics companies that offer the same services. It is important to weigh your options as per the following criteria to find the best eCommerce logistics partner: Customer Service and Customisation: All businesses live to serve their customers. If the customer is dissatisfied, it affects sales and, in turn, the company’s growth. Online retailers need to check if the logistics partner can provide decent customer service, what their success rate is, and whether their services can be customised as per the customer and the product that the business caters to. Performance History: The performance of these companies influences the operations of an online retailer. Therefore the eCommerce business must collect all the relevant information on their past performance to analyse their track record and identify certain failures and how they were addressed. Same-day or next-day deliveries have become the norm these days, and the logistics company for eCommerce must be able to provide these services. If the eCommerce business has certain demands, the eCommerce logistics partner must keep a provision for exceptional distribution timelines like 10-minute deliveries without affecting the service quality. Omnichannel Presence: With severe competition coupled with rising customer expectations, it has become essential for businesses to employ multiple channels for order fulfillment. Before onboarding an eCommerce logistics provider, the business must ascertain if the 3PL company has an omnichannel presence to be able to reach as many customers as possible. Besides distribution, the partner should also provide multiple channels to ensure seamless communication and data flow between the two organisations. Technological Capability: This drives business operations productively. There are many tools utilised by 3PL eCommerce logistics providers, such as a Warehouse Management System (WMS), platforms to fulfill and track orders, inventory and distribution management, and any other cloud-based tech that empowers a business’ supply chain. Having a good onboard tech platform improves efficacy and productivity, leading to fewer errors and higher performance. Their system should also be able to integrate with other fulfillment services to enable seamless transfer of data and insights between multiple platforms, smooth order fulfillment, and customer service. Financial Strength: Without a solid financial backbone, no company can thrive. If an eCommerce logistics partner is monetarily weak, it can take down the eCommerce business’ supply chain, thus affecting the latter’s market image. Therefore, every company must thoroughly check the 3PL provider’s financial books before sealing the deal. The logistics provider for eCommerce must also be able to survive all kinds of business disruptions with stable financial backing. Having good relations with banks and financial institutions proves helpful in many different situations. If the logistics provider assures them of such support, they could be the ideal business partner. Scalability: The eCommerce logistics provider should have an expandable business model that inflates as the eCommerce business grows its reach. The logistics provider should be able to adapt to the growing demand and expansion of the retailer they have partnered with. Geographical Reach: Today, eCommerce businesses thrive on their reachability of tier 2, 3, 4, and lower towns and villages. The deeper and quicker their reachability, the more orders they can receive and fulfill, thus securing a better customer satisfaction ratio and obtaining access to new customers in different regions of the country. Overall Cost: The overall package deal offered by the eCommerce logistics provider is very important to observe. Your company should be able to afford them, with all the services they offer, rather than paying less for a company that does not offer important services. Companies need to strike the right balance between services and cost. Top 10 Latest Trends in eCommerce Logistics in 2025 eCommerce Warehousing Source This practice is focused on storing inventory and products for the daily operations of an eCommerce business. eCommerce warehouses are storage spaces dedicated to operating an online retail business. An eCommerce business needs to ensure that it operates and sets up storage closer to its customer hubs to reduce the time and expense of transporting goods. Partners like WareIQ help store the inventory closer to areas of high customer demand, thus enabling businesses to offer shortened delivery timelines. Inventory Management Source Many new trends in inventory management have emerged in light of the pandemic and other disruptions like the Ukraine-Russia war. A few such developments are the Just-in-Case method of managing inventory and the extensive automation of the supply chain. Simply termed as just-in-time inventory management. Just-in-Time meant procuring the inventory as and when the demand arose. The Just-in-Case method pushes businesses to procure excess inventory to avoid hassles in case of a contingency like a lockdown or an interruption due to war. This inventory management trend has seen an upsurge in the past few months by eCommerce companies wary of being unable to meet the existing or increased customer demand due to unforeseen contingencies. The shortage of workforce and other interruptions have pushed companies to look for measures that can support and maintain the speed and efficiency of the supply chain. Automating important processes is one such method. Advanced tech like AI and Machine Learning are driving the evolution of eCommerce logistics management systems like WareIQ. These tools enable real-time tracking of inventory nationwide which has pushed the efficacy levels higher, especially in the case of cross-country shipping. Order Packaging & Labelling Sustainability is not the only trend catching up with eCommerce packaging; minimalistic design is also gaining mileage. Besides eco-friendly packaging material, companies prefer labels and designs with minimal amounts of text and designs. (All that is covered under custom packaging for eCommerce). This trend has taken the ‘Less is more opinion to the next level. For example, Apple’s plain white boxes usually outshine other manufacturers. Sending the orders in generic, uninspiring brown boxes will create an unwelcoming and impersonal client experience. Instead, choosing an eCommerce logistics firm that provides branded packaging services can help companies create a brand and raise the visibility of their business. Besides just visual appeal, companies are also using packaging to communicate with customers. Adequate packaging needs three layers. When orders get punched, there's a label printed and stuck on another two layers of packaging and then dispatched. eCommerce logistics companies provide a wide variety of packaging strategies. For instance, bubble foil, padded paper, and plastic emailer bags help to prevent the damage of goods during transportation. Order Shipping Shipping the order to the customer safely and on time has always been the priority for eCommerce businesses. But they can never ignore the affordability of the shipping charges. While companies have been tying up with eCommerce logistics providers for decades now, the pandemic has proved that loyalty is overrated. It has changed the priority from allegiance to cost and benefits. There has been an upsurge in the spot pricing market for shipping, wherein companies shy away from long-term contracts and focus on getting the best price for their shipping right now. Another trend that is catching up is the need for business intelligence behind every shipment. Advanced tech backs every order from the origin to the customer and back. Weight Locking Source This is a great trick to avoid product weight discrepancies in order shipping services. When the eCommerce logistics partner picks up the order from the business’ warehouse, it weighs and measures the dimensions again before pushing the parcel out to the customer. Unfortunately, many times, there happen to be differences in the weight of the package due to unavoidable variations in weighing machines. There are a few useful hacks to ensure that this doesn’t happen: Calculate the Volumetric Weight of the shipment. This is done by multiplying the product of package dimensions in centimetres by 5000 (which may vary as per the carrier). The resulting weight will remain the same globally. For odd-sized packages, automating the weighing system helps avoid discrepancies in a manual cubic calculation. Associate with a supportive eCommerce logistics partner who resolves such discrepancies in a timely and effective manner. Click pictures while weighing the package which helps as an application of proof in case of a dispute Order Tracking Source Online retail customers want real-time information on the whereabouts of their shipments. Therefore, companies invest in advanced tech like superior order management systems to ensure effective mapping of the orders and timely communication with the customer through fulfillment statuses. Last-Mile Delivery Source It needs to offer sustainability, timeliness, safety, flexibility, real-time updates, and much more. These criteria define a significant share of a customer’s experience with an eCommerce retailer. And the statistics say that it is an essential part of customer engagement. Moreover, peak season shipping has become a perennial trend. Customers prefer to receive their orders at home than shopping amongst huge crowds and queuing up for payments, especially during the pandemic. As a result, they push online retailers to invest heavily in last-mile delivery management software to manage last-mile deliveries and recruit and retain the right personnel. Fast Shipping No words can stress the significance of fast shipping. Customer expectations have crossed all boundaries, pushing eCommerce companies to strive toward delivering orders within ten minutes. This scenario is in the process of making next-day delivery obsolete. This requirement has pioneered the invention of dark stores across the nation to cater to the growing demand for superfast supplies. One can only imagine how much faster it can possibly get. Same Day & Next Day Delivery Source Many eCommerce companies now focus on speedy deliveries so that customers get guaranteed next-day or even same-day delivery. Quick commerce is the next generation of online delivery systems, which enables the delivery of items within a concise time bracket of one or two days or less than 10 minutes for some business models. Convenience, delivery speed, and efficiency continue to define customer experience. Reverse Logistics WareIQ's Reverse Logistics for Efficient Returns Management An unsatisfied customer will initiate a return, and many eCommerce logistics companies oblige. This trend has given birth to advanced reverse logistics. Superior technology, sustainability, and creativity are driving the backward supply chain. With a high share of products bought online being returned, the eCommerce industry has been forced to revisit its return policies and invest in reverse logistics. Conclusion: Do You Need to Outsource Your eCommerce Logistics? eCommerce is no longer linear, and fulfillment is now Omnichannel. eCommerce customers may order online via mobile apps, phones, or online marketplaces. They may want home delivery, in-store delivery, or curbside delivery. All those fulfillment systems need to be taken care of by eCommerce logistics partners for efficacy and punctuality. eCommerce logistics strategies help to level up a business’s digital presence by bringing radical shifts in the business paradigm. Hiring a logistics partner is one such remarkable strategy. Here are a few benefits of delegating the task to an external expert.  The eCommerce industry is slated to experience massive growth and evolution in the coming years. As customer demand widens, every nook and corner of the sector will need to be organised. eCommerce businesses cannot manage these processes on their own. The expectations are too heavy to be borne solely by them. Delegation of the major parts of logistics can assist them in taking some load off. Teamwork will play a vital role in the sector’s development. Experienced players like WareIQ can lead your expansion story with creative ideas and are bound to enhance and improve supply chain processes. WareIQ, a Y-combinator-backed eCommerce fulfillment company for same/next day delivery. We execute this by helping you store inventory closer to your customers using our platform connected to 20+ top marketplaces & D2C websites, a nationwide network of fulfillment centers, and prominent last-mile couriers. WareIQ manages the entire range of complex operations in the eCommerce fulfillment process, such as inbound functions like scanning and quality check, 100% accurate Pick and Pack, and inventory management across all channels, with a centralized platform for core fulfillment and shipping operations and post-shipping apps for a delightful experience and zero to minimal supply chain leakages. With world-class WMS functionalities, WareIQ handles the entire range of intricate operations in the eCommerce fulfillment 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. WareIQ will definitely prove to be a more reliable and trusted long-term fulfillment partner compared to dropshipping and conventional 3PL companies. [signup] What is eCommerce Logistics: FAQs

May 05, 2022
How to Reduce Logistics Costs? Top 10 Ways to Reduce Logistics Costs in eCommerce in 2025

How to Reduce Logistics Costs? Top 10 Ways to Reduce Logistics Costs in eCommerce in 2025

Running an eCommerce business efficiently is an arduous task. Managing eCommerce logistics along with constantly thinking of various ways to reduce logistics costs further adds to the woes of owners of operations of online businesses. Expenses line up for the owner even before they set up the website. Although a responsive website and preferred domain cost around a hundred dollars, the eCommerce business demands anywhere between $1000 - $10,000 for a small company and north of $50,000 for a medium-sized start-up. Once up and running, the enterprise starts to demand cash inflow for various other activities like: Inventory: Things that an eCommerce business sells are the priority. Having good quality stuff to sell helps business owners make a brand name. Tying up with worthy sellers to procure the raw material or the finished good is critical for the business's success. Operational Costs: These include costs like incorporation and registration of the company, any legal fees, trademarking the logo, or buying software for internal or customer use. Website Costs: From buying the preferred domain, building and running a website to maintaining a secure payment gateway comes under website costs. In fact, purchasing a server costs around $200, to begin with. Although purchasing an SSL certificate adds to the cost, custom designing and developing a website that runs on all digital platforms alike can cost anywhere above $10,000. Offline and Miscellaneous Costs: From buying an office space to running it, involves rent, infrastructure costs, internet costs, and other maintenance costs.  Hiring and Retaining Staff: Having the right staff is critical for any business; a wrong hire costs around 30% of the employee’s first-year earnings to a company. Marketing Costs: Every business needs a good marketing strategy, more so if running an online store. Creating a logo, branding and ads, physical advertising copies, visiting cards for the employees, building and maintaining social media profiles, and sending customer updates via email marketing, all cost around 10% of the total expenditure as per Shopify. Logistics Costs: A majority of customers consider safe and timely shipping of their purchases as an essential criterion for rating a service. Everything boils down to nothing if the product they ordered arrives in pieces or is ruined. But logistics doesn’t only mean shipping the product from the warehouses to the customer. It embraces many layers that add to the eCommerce logistics costs. Let’s take a look at how to reduce logistics costs for eCommerce business and proven ways to reduce logistics costs according to experts. What is eCommerce logistics? Customers shopping in an online store add their liked items to the cart and head to the payment gateway. However, when they see the details like the expected delivery date or any additional costs associated with the logistics, they tend to abandon the cart midway. Similarly, if the returns take time to process, the customers tend to change their brand preferences. Getting the purchase to the customer safely, timely, and in the most affordable way is what eCommerce Logistics embraces. This includes all logistical and supply chain management activities undertaken to run an online store. eCommerce Logistics is the supply chain movement from the seller to the customer or back from the customer, in case of returns. Businesses running an online store sometimes tie up with logistics service providers to undertake all supply chain-related activities. Here’s what an e-commerce logistics supply chain looks like - Customers demand superfast deliveries and even agree to pay more to get them. India has moved on from one-day arrivals to receive their orders within 10 minutes of purchase for some items. With environmental enthusiasts calling for sustainable packaging solutions every day, the requirement for efficient and eco-friendly logistics has multiplied. eCommerce logistics has scaled manifold in the past five years. It is expected to grow to ₹492.8 billion by 2025 at a CAGR of 23.6% since the escalating demand from tier 2, 3, and 4 cities is driving this progress. [contactus_gynoveda] What are the Costs Associated with eCommerce logistics? An eCommerce business incurs many costs under the head of logistics alone (in simpler terms there are different types of logistics costs). Inventory Cost Managing inventory well requires a lot of planning, workforce, and money. Upstocking more than the demand can hog the company’s cash flow. Keeping less inventory can cause disruption in supply and meeting consumer expectations, thus causing considerable losses to the business. Likewise, many mistakes increase the overall logistics cost for a company: Incorrect forecasting Sky-high production costs Reduced inventory turnover Unexpected overheads Failed or delayed deliveries Mistakes in data keeping Loss of customers Inventory Costs are a function of the following: Inventory Cover or Inventory Days or Days on Hand It typically means, according to the rate of sale of a particular Stock Keeping Unit (SKU), how many days of inventory are we holding? (For example - I have 100 units of an electronics category SKU and my rate of sale is 20 units per day, my DOH or Days on hand inventory would be 5 days) The higher my inventory cover, the higher is storage required. The higher the storage space required, the higher would be my warehousing rental space.                   High Inventory DOH ↑  Higher Warehousing rental space & Cost↑                  High SKU Spead ↑  Higher Warehousing rental space & Cost↑ Every inventory manager must continuously review inventory health and keep an eye on high-ageing inventory. There are multiple data cuts that one can look at in inventory. 1. Pareto of Inventory - 80-20 rule can be applied to look at inventory. Inventory Value (in Merchandise Value terms, used as GMV or Gross Merchandise Value in the E-commerce industry) contributes to 20% of sales.  Inventory SKUs (count of stock keeping units) contributing to 20 % of sales Inventory basis ageing (Ageing of inventory means the amount of time the item has been in a warehouse since its first inbound) Risk of damage, unsold, redundant inventory, expiry Products with high shelf life do not have an issue with expiry, but a company dealing with perishable items (for example - grocery items, fresh category items, FMCG consumable or edible products) have a shelf life of 1 day to 1 year. A high inventory cover poses a risk of inventory getting stuck and potentially liquidated or written off.  Products like general merchandise, electronics, footwear, and apparel with high inventory pose a risk of being unsold and falling under slow-moving inventory. They further pose a risk of being liquidated at <30% of the original value of the item.  So how do we ensure low damages or losses, expiry or unsold inventory?  Review of slow-moving inventory and continuous focus by selling it off before the item loses value in the market. Ensure its visibility to customers.  Sales teams need to keep this a priority. If it is an e-commerce website, ensure the visibility of slow-moving items on the app. Pitch and do curated selling by checking past history of buyer purchasing Stack and store inventory by following storage norms to reduce damages. Packaging materials can be used to give protection to items. Stock verification teams need to check for damages and highlight to correct the inventory. If the company is capable of repackaging an item (with a packaging license available), the company must do so to avoid inventory damages In short, inventory costs impact 2 aspects - warehousing space cost and losses/damages.  The company must work towards inventory points to ensure warehousing space cost is optimized and losses/damages are minimal. Losses/Damages/Liquidation in logistics typically range from 0.1% to 5% depending upon the type of product.  Storage Costs eCommerce companies need to store the inventory, the finished goods in high demand, and returned products. With crunched delivery timelines in the current times, they need multiple storage spaces or dark stores across the country to fulfill customer orders rapidly. All these efforts add to the overall logistical costs. Storage costs can be broadly classified into: Warehousing & Hub rentals  Having the right network design keeps warehousing and hub rentals very low. In the Indian context, rent per sq. ft is a metric most e-commerce companies track. It can vary from as low as 10 Rs/sq.ft to 100 Rs/sq.ft. Companies operating in hyperlocal space have to spend higher as they need to be closer to the demand with quick delivery turnaround timings. Storage Designs Storage costs reduce non-linearly with the usage of shelving or racking. Depending on the type of products being sold, and the velocity or rate of sales, businesses can opt for multi-tier shelving type storage to reduce warehouse rental costs. There are multiple types of shelving and racking options right from long-span shelving to pallet racking which enables vertical storage possibilities with easy retrieval of inventory. The potential to store inventory in an sq. ft increases multifold with racking and shelving. But at the same time, some amount of material handling equipment would be needed for moving inventory which increases the CAPEX costs of the e-commerce company.  Other costs Operational costs such as electricity, repair & maintenance-related, stationery costs, and safety-related costs are part of storage costs. Such costs typically range from 5-10% of the facility or warehouse the company is operating Packaging and Handling Charges Different products need different packaging solutions. If the customers demand sustainable packaging, businesses need to procure specialised eco-friendly material to wrap the products with care. Moreover, fragile products demand extra care and time or temperature-sensitive commodities require expert infrastructure for transportation. Therefore, the company incurs many expenses to pack and handle its products effectively. Transportation Costs The expenses incurred in carrying the finished good to the customer or the returned product to the warehouse form 58% of the total logistical expenditure. If the inventory is not planned well, the transportation bears the burden of additional costs. Transportation logistics costs can be broadly classified into - First Mile transportation Middle Mile Transportation Last Mile Transportation Returns and reverse pick-ups Transportation costs are a function of - Load per trip or Utilization Distance of trip Type of vehicle used to transport Defined commercials for trip Delivery window to customer Type of product being transported Number of drop points [table id=35 /] Related Article: How to Reduce Transportation Costs? COD Charges Due to convenience, around 80% of Indian customers opt for cash on delivery. The delivery partners eCommerce companies hire for the job charge extra for COD for the payment collection from the customer and submitting the proof of delivery to the company. Moreover, the logistics provider incurs additional charges if the product needs to be returned to the warehouse, thus passing on the cost to the eCommerce enterprise. Non-Delivery Reports Failed deliveries cost a lot to the logistics service provider. If not managed well, they can disrupt the supply chain. Every undelivered product needs to be traced back to the eCommerce company. If the reason behind the unsuccessful delivery is not uncovered, the other attempts might fail too. Cost of Labour The supply chain survives through the presence of good employees. They are needed at every step, whether it is packaging, warehousing, transporting, or finding the way to the customer’s house for drop-off. Therefore, finding the right hire is critical for eCommerce companies to continue to exist, and they add to the overall logistics cost borne by them. Reverse Logistics Costs The charges are incurred when a customer opts to return the product to the seller. In such a scenario, the eCommerce company incurs costs for picking up the product from the customer’s place, transporting it to the warehouse, and inspecting and repackaging it for resale or recycling. Insurance Although insurance matters less to most eCommerce companies, the product's security being transported to or from the customer’s place holds utmost significance. The company doesn’t insure a product if it is of less value, but that doesn’t take away the need for top security measures to be in place and for readiness in case of unforeseen contingencies. Having insurance is a great way to lure more customers as it ensures the safety of their order. Many logistics service providers offer to insure their deliveries, and eCommerce companies negotiate the rates with them. Taxes The unavoidable devils of expenses and taxes form a crucial component of the logistics costs. The introduction of GST in 2017 condensed multiple taxes into one, but it still consumes a significant share of revenue earned by eCommerce Logistics companies. A variety of factors influences all expenses. Let's understand what those factors are for the logistics costs.  Related read 10 Best Last Mile Delivery Management Software What Factors can have an Impact on eCommerce Logistics Costs? Consumer Expectations Like the others, eCommerce businesses take customer expectations and feedback very seriously. To address the growing consumer demand for shorter delivery timelines, even eCommerce startups invest heavily in dark stores and multiple warehouses across the nation, thus increasing logistics costs. They bring down product rates to lure more hits to the website as the quality goes up irrespective of the price tag. Technological Advancements AI and Machine Learning have entered the supply chain and are revolutionizing how eCommerce warehousing and distribution work. eCommerce companies are using superior software to drive the supply chain. Information is key in the logistics business, and improved online supply chain platforms assist logistics managers in carrying out tasks related to inventory, warehousing, transportation, and order management quickly. Having a solid tech backbone enables better information processing and, thus, better decision-making. Decision Support Systems (DSS) also give businesses the desired competitive edge. Economic Scenario A country's financial performance and regulatory framework influence eCommerce and the supply chain industry. When GST was introduced in 2017, it changed how taxes worked in India, especially in the supply chain industry. When the distribution had halted except for essential goods during the pandemic, the eCommerce industry was among the worst affected. The businesses couldn’t deliver despite the demand, and the industry faced losses more than ever before. Logistics is a critical industry that influences global trade. It generates employment, income, and infrastructure and invites foreign investment. However, a vicious cycle of influence runs between the industry and the economy. One cannot function while the other suffers.  The Emergence of Global Brands The entry of Amazon changed the face of eCommerce in India. Such global brands with deep pockets pushed the Indian eCommerce players to think creatively to secure their share in the vast market of Indian consumers. Soon, the war was not limited to mere price tags. It also spread to product quality, delivery timelines, and returns policies. Everything combined, the Indian eCommerce logistics has borne the brunt of escalating costs and consumer demands due to intense competition in the sector. Weather It is not just pizza that gets delayed in a hailstorm. eCommerce suffers as an industry due to poor weather, which directly affects the physical movement of goods. The weather seems to be a prominent factor that impacts the speed of this industry. However, climate change isn’t far behind. Climate change has been causing severe disruptions globally, and eCommerce is well aware of the indirect costs it is bound to bring. The above simple example of a failed delivery snowballs into reverse logistics costs, unmet customer expectations, wastage of perishable produce, expenditure on fuel and person-hours, and the resulting monetary loss. Fuel Prices Fluctuations in fuel prices trigger a chain reaction in logistical costs. All modes of transportation run on fuel, and steady fuel prices mean cheaper transportation costs. In case of an upsurge, even if the eCommerce company tries to save costs in other areas, it boils down to nothing as the fuel price hike burns down the additional savings. Package Dimensions Weight and dimensions play a significant role in eCommerce logistics costs. The heavier or bigger the package, the higher the transportation cost. Moreover, some odd-sized packages require specialised transport, which demands more money. eCommerce companies employ various hacks to save costs here. Using fitted packaging or intelligent ways of wrapping help save costs associated with weight and dimensions. Delivery Timelines As mentioned earlier, the international giants introduced tighter delivery timelines in the country, which fueled the competition in the eCommerce industry and pampered the customer’s imagination. While most players now have similar deadlines, they endure steep expenditures due to strict targets. Surcharges From public holiday extras to the cost of reaching a difficult-to-access destination, surcharges vary in range but add to the overall cost of eCommerce Logistics. With so many ingredients escalating the final number and a multitude of factors affecting the eCommerce logistics cost, it becomes imperative for corporates to adopt ways to reduce it. But how can eCommerce companies reduce logistics costs? Here are ten sure-shot hacks to reduce logistics costs and achieve them efficiently. 10 Efficient & Practical Ways to Reduce Logistic Costs for E-commerce in 2025 Source Here are 10 Proven Tips by experts for year 2025 to reduce logistics costs/ reduce transportation logistics costs for your online business; Partner with a 3PL Provider Sometimes, a business needs another pair of hands to delegate tasks and ease their workload and get an expert or a different opinion on managing work. That is why many eCommerce businesses outsource logistics to a third party that is an expert in customised supply chain solutions and can help them reduce logistics costs. These 3PL fulfillment service providers are professionals who can analyse and suggest ways to cut costs and still meet customer expectations. For instance, they can recommend the best means to widen the customer reach and shorten delivery timelines. Their services range from warehouse management, inventory management, transportation and distribution, technology solutions, and reverse logistics. However, the most critical service they provide is delivery, as it deals with the end consumer. Keeping storage spaces closer to customer hubs where a business receives most orders is a foolproof trick to improve delivery timelines and save costs. But not every business can afford to open a dark store or a storage center in various parts of the country. Buying or renting such spaces burns a hole in the logistical pockets of eCommerce companies. Logistics partners like WareIQ assist eCommerce companies to reduce logistics costs and ward off logistical nightmares by providing storage spaces closer to customers across the country.  But before signing up with a 3PL partner, eCommerce companies should ensure their end goals and vision sync with the logistics provider. They should be able to customise services per the company’s requirement and provide specialised handling services for fragile, delicate, perishable, and time-sensitive orders. But most importantly, they should give a bouquet of delivery options to ensure order fulfillment in case of contingencies. Read the blog on best 3pl for small businesses to understand factors online businesses should consider before choosing a 3PL Collect Data Extensively All good decisions have one thing in common. Availability of data in abundance. eCommerce players survive and grow on data collected from their customers, sellers, logistical partners, delivery personnel, suppliers, government, and other players in the industry. eCommerce companies need to know every pinhole that might be leaking revenue out of their systems.  But that’s not it. The data collected needs to be analysed well to churn out information that decision-makers can use. Good technology helps a lot in analysing and processing data. This is a proven way to work on ways to reduce logistics costs. Employ Extensive Tech To reduce logistics costs, a company needs to automate warehousing, transportation, and distribution. Many eCommerce companies looking for hi-tech solutions employ Warehouse Management Systems (WMS), shipping aggregators, or delivery tracking apps to manage operations. Some even use automatic container loading systems in their storage spaces to save staffing and time and prevent damage to the goods.  But the world has moved past these tools. Instead, AI and ML have changed how technology operates and adapts to businesses. For example, WareIQ offers a comprehensive, streamlined platform to keep a tab on warehousing, and delivery and drive customer engagement. These tools also help eCommerce players collect, store and analyze data and have been proved by experts to reduce logistics costs. Locate Suppliers Closer to Customers A business’ preferred supplier in Cochin could make it difficult to transport products to its distribution center in the East or most customers in the tier-3 town next to Patna. To reduce logistics costs and save time, the company must find sellers close by. A good seller next door is better than the best associate a thousand miles away. Consolidate Shipments Businesses must look out for consolidation opportunities for their shipments to a single location or team up with other shippers to increase and fully utilize their truckload. Both these techniques help reduce logistics costs for them and save time.  While consolidating their shipments, companies must use industrial-grade floor weighing very accurate scales. Reduced weight discrepancies lead to lower logistics costs hence help to reduce logistics costs. Moreover, rethinking and optimising their delivery routes is essential while combining shipments to a location to reduce transportation costs. Optimise Storage/ Reduce Warehousing Rental Cost Warehousing consumes a significant chunk of a company’s revenue and contributes around 10% to the total logistics costs incurred by corporates. ECommerce companies must optimise storage capacity by collecting in-depth data and adapting superior technology and out-of-the-box techniques. eCommerce companies need to analyse their storage, inventory, and order management systems to ensure no resource goes waste. They should minimise spaces and increase density for good optimisation to reduce overall costs of the supply chain, hence helping in reducing logistics costs.  Another trick is to reduce the inventory for items that don’t sell much or categorise items based on their rate of return. This way, companies can save time and space. The Supply Chain Planning team needs to build projections of sales basis on which warehousing rental space needs to be triggered keeping in mind at least 90% utilization of rental space. Any underutilization will lead to high fixed costs. The team scouting for warehousing space needs to ensure low Rs/Sq Ft Buy Packaging in Bulk A simple yet effective technique. Businesses should buy packaging material in bulk to save money and time. They could strike a deal with their preferred supplier for a regular supply of the wrapping ingredients in bulk. If the company is into eco-biodegradable packaging, purchasing in bulk can help reduce logistics costs. Define the KPIs A business cannot improve what it cannot measure, in order to reduce logistics costs one should define its KPIs. The extensive data collection techniques don’t serve any purpose if the companies don’t have performance indexes to measure them against. Therefore, all eCommerce companies must define their key performance indicators to measure their performance regularly. Beginning from delivery success rates to return rates and the level of inventory wastage, everything needs to be appraised. Ascertain All Costs Every business incurs some fixed and variable costs. Companies need to keep a tab on and strive to reduce individual expenses. For instance, preventive maintenance is a fixed cost but an indispensable expense, but varying shipping costs can be trimmed and we can reduce logistics costs through various tricks discussed above. Reduce Cart Abandonment Cart abandonment proves that the customers like what you are selling but not the overall proposition. In most cases, the biggest reason occurs to be the figure flashing on the checkout page. Other reasons are the delivery timelines or simply the additional shipping charges. Either way, it costs the company a customer as that buyer is unlikely to return to shop at this portal.  ECommerce businesses need to reduce their cart abandonment rates. A trick to do this is placing a minimum order quantity for purchase to get free or faster delivery.  MOQs increase revenue, which helps in managing logistics costs. Companies can keep a minimum order quantity while ordering pushes the users to add maybe one more item to get quicker or free delivery. As a result, they receive what they like, and the business gets closer to its profit margin besides being able to reduce the abandonment rates for shopping carts. Conclusion eCommerce companies face a cash crunch due to intense competition for prices and services and the flaws in the country's logistics infrastructure. Since logistics plays the most significant role in their success story, they must scout for solutions to reduce logistics costs. The right tools and significant associations make the uphill task i.e to reduce eCommerce logistics costs easier. Managing logistics in-house while focusing on the reduction of logistics costs is a difficult task for online businesses. Hence, it's advisable to outsource logistics to the best fulfillment services partner like WareIQ. 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's fulfillment platform optimises delivery speed, reduce logistics costs & customer experience through the 4 steps mentioned below: Sellers send their stocks to WareIQ's Regional Distribution or fulfillment centers WareIQ Intelligently places inventory across its network of 20+ FCs WareIQ picks, packs & ships orders across the online/offline channels WareIQ's Recommendation engine to choose from a wide network of courier service partners and prioritize shipping speed and logistics cost, with access to WareIQ Rush for same-day delivery  [signup] Reduce Logistics Cost FAQs (Frequently Asked Questions)

April 30, 2022