eCommerce Logistics

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

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 ) What is a good fill rate?A seller should aim to have a fill rate of 100% if possible. An average fill rate is around 85-95% depending on many factors like demand, supply, season, weather, supply chain, management, etc. What is fill rate performance?The percentage of orders that can be filled immediately from the available inventory of a company is known as the fill rate performance. A high fill rate's impact on customer satisfaction must be evaluated against the cost of keeping larger stock levels. What affects fill rate?A better fill rate depends on the kind of products you sell, the level of market competition and customer loyalty. You can clearly see your stock levels and how they affect the health of your company by conducting an inventory study. What is an OTIF score?On-time, in-full or OTIF is the capacity of a supplier to deliver goods to distribution centers measured by this benchmark, by which retailers evaluate suppliers within specified delivery windows and in full quantities. Sellers mostly measure OTIF scores monthly or quarterly.

July 20, 2022

10 Best 3PL for Small Business in India in 2024

Large e-commerce companies have been enjoying the privilege of having 3PL or Third-Party Logistics companies as partners to take care of the logistics of their products, and that has helped them to focus on their core function of sales and marketing to expand their businesses. However, having the best 3PL for small businesses as partners is still a constraint for most e-commerce businesses, especially for those which are at the early stage of their growth journey. Small e-commerce businesses have been doing all their logistics by themselves owing to limited resources available at their disposal, and as such, they have been facing serious difficulties in matching the price and delivery timelines of large e-commerce businesses. Having understood this ground reality, more and more small e-commerce businesses are looking out for the best 3PL small business partners to improve their logistics framework and remain competitive in the growing market of e-commerce. What are 3PL companies? Order fulfilment is an essential and integral part of the operations of any e-commerce business. As the business grows, it may become very difficult for an eCommerce business owner to fulfil customer orders with in-house resources. 3PL or Third-Party Logistics companies act as eCommerce order fulfilment agencies for e-commerce businesses. Therefore, 3PL companies can effectively provide third-party logistics in supply chain management. They provide comprehensive ecommerce logistics services needed by e-commerce businesses to meet their commitments to their customers. 3PL companies help their e-commerce clients to focus on sales and orders received from customers through online platforms, while they take care of all the logistics operations required for the safe and timely delivery of products to customers. A 3PL company handles functions like warehousing and storage, inventory management, transportation, distribution, delivery to customers, and reverse logistics in case of rejection/return by customers and customer support 3PL fulfillment companies bring many benefits to their e-commerce clients. First and foremost, by engaging services of 3PL companies, e-commerce businesses are not required to make huge investments in infrastructures such as ecommerce warehouses, transport vehicles, and manpower among other things. A 3PL company with expertise in documentation, national and international markets, mandatory compliance, and regulations adds a lot of value in terms of reducing costly delays and cycle time. Logistics is a non-core function for an e-commerce business owner. The 3PL company helps the e-commerce business owner to focus on his core competency to manage and scale-up business instead of getting caught up in nuances of logistics management. Outsourcing of logistics to third-party also gives the flexibility to utilise services from 3PL companies based on business demand and needs. Above all, 3PL partners help improve customer satisfaction through efficient response time and timely deliveries. [contactus_gynoveda] What is the Significance of 3PL companies for Small Businesses? In today’s competitive business environment, specialisation is the key to the growth of a business enterprise. Executing all business functions in-house may not be possible without compromising on the performance of the core business activity. Outsourcing certain critical business functions to an experienced operator can be a good strategy for business growth. While large e-commerce companies are already outsourcing their logistics and order fulfilment activities to 3PL companies, small businesses are also now increasingly inclined to do the same to take advantage of the benefits that 3PL companies bring to their businesses. It may seem like a big step for a small business, but it helps small business owners to stay ahead of their competitors. Optimisation of logistics functions can entail considerable savings by reducing wastage and helping the business to improve its bottom line. A 3PL company with multiple customers creates extensive infrastructure for warehouse management and inventory management. However, small business owners need to pay only for what they use, and thus, they are insulated from fluctuating warehousing requirements and associated rates. Normally, a good 3PL company will be equipped with good technology and analytical tools to provide total visibility and transparency of its operations. It adds to the user-experience of small business owners by helping them track the journey of their products till they are delivered to the customers. Many small businesses do not have facilities or infrastructure to manage multiple functions under one roof. 3PL companies, on the other hand, offer many value-added services to ensure smooth operation. Timely delivery at a competitive cost is the biggest challenge for any e-commerce company today. The challenge becomes more demanding for small businesses as they have to compete with big e-commerce companies who have gained expertise in delivering a product to a customer at the most competitive price and within the tightest timelines. Top Expectations from 3PL Companies for Small Business Small businesses often manage their order fulfillment exercise in-house. It is manageable as long as the volumes are small. However, as the volume of orders increases, small businesses find it difficult to manage multiple activities due to limited resources and infrastructure. This is when they require the services of a 3PL company to handle their warehousing and order fulfilment requirements. While fulfilment exercise is labour-intensive, infrastructure needs are costly. 3PL companies for small businesses, which already have infrastructure and manpower in place, can easily help small businesses to meet their order fulfilment obligations. Small businesses have many expectations from 3PL companies. However, the following expectations top the list: PackagingShipmentInventory Management Regular FeedbackReverse Logistics Packaging plays an important part in giving customers a satisfactory e-commerce experience. Customers like their products to be delivered without any pilferage or damage during transit. 3PL companies for small businesses, with requisite expertise in packaging, make sure that it is done with appropriate materials, dimensions, and designs to protect products to satisfy the customers. Shipment is a critical process in a supply chain as the efficiency of this process determines the timeline for delivery of the product to the customer. The companies are expected to choose the best and the most cost-efficient shipping option for each order so that it reaches the customer in the expected time frame. The 3PL companies for small businesses are expected to manage the inventories with regular reporting on stock levels and issue alerts whenever stocks go below-predetermined levels. The best 3PL for small businesses is also expected to provide specialised storage and inventory services for perishable goods so that product owners can withdraw expired products from the inventory well in time. The 3PL companies for small businesses are expected to maintain total visibility in their operations for business owners by the use of technology and regular feedback. Any order fulfilment exercise is not complete till the product is accepted by the customer. In case the customer wants to return the product, 3PL companies are expected to efficiently manage the reverse logistics so that the product is safely returned to the product owner. How do 3PL companies differ from 4PL companies? [table id=8 /] 10 Best 3PL For Small Business in India in 2024 StockareaEkart LogisticsIndia PostBlue Dart ExpressDTDC ExpressEcom ExpressShadowfaxTCI ExpressDelhiveryGATI With the exponential growth of e-commerce in India, the need for 3PL companies for small business has also grown dramatically, and even small e-commerce businesses are now having the luxury of picking up the best 3PL companies that meet their specific requirements. We have presented here the list of 10 best 3PL for small businesses for 2024 based on their cost structure, pin code reach, visibility, terms of service, market share and quality of service. Stockarea Source The company specialises in Digital Warehousing with a wide range of automated tasks related to Fulfillment, Bonded, General warehousing, Cold Storage, Freight and other logistics-related functions. Stockarea has a presence in practically every major city in India with 100+ warehouses in its network. One of the deep pockets of Stockarea is in the storage and transportation of perishable items (via its intricate, well-positioned network of cold-chain facilities) and heavy equipment (considerable care is taken and technical instructions are strictly adhered to in the process of handling). The company provides discounted quotations to the customers from its carrier partners for all types of freight - be it Less-than Truck-Load, Full Truck-Load or Last Mile Delivery. While Stockarea reduces the hassles of documentation on behalf of its customers, such as FSSAI Certifications (for storage and movement of food items), accreditations from BIS, CWC, FCI etc., customers are charged a considerable premium for such value added services. However, these value added services have helped Stockarea establish itself as one of the preferred 3PL companies for small businesses. Ekart Logistics Source Ekart Logistics began its operations in 2009 as the in-house supply chain arm of Flipkart. The company provides end-to-end fulfillment solutions to a multitude of e-commerce businesses, ranging from hassle-free order pickups, multi-mode payment collections for COD orders, first mile and last mile coverage and effective handling of order returns. Ekart Logistics has become one of the most popular 3PL small business partners in India because of their deep penetration into Tier-2 and Tier-3 cities and remote villages, seamless API based integration with eCommerce platforms, low rate per consignment, express deliveries and efficient reverse logistics. Ekart has also improved its communication systems over time to enable businesses to share the live status of the consignments with their respective customers via SMS, email etc. India Post Source Although the adoption rate of India Post as a 3PL small business partner among small businesses is slow, India Post offers three promising services to match the logistics and fulfillment requirements of small businesses precisely: Business Post - This is meant for very small items such as stationery, gift cards etc. and is usually the most affordable alternative for delivery to customers located in any part of India. Business Post centres are conveniently located in major cities and can also be established on request at the small business or company's request if monthly order volumes are satisfactory.Logistics Post - Under this scheme, India Post integrates features such as LTL & FTL services, Logistics Post Centres for collection of consignments, Multi-modal transport, Warehousing Services, Fulfillment services and Reverse Logistics.Media Post - This is a fairly new concept introduced into the Indian market and will enable small businesses to penetrate into the less tech-savvy segments in villages and remote areas with physical promotional materials like flyers, catalogues etc. The biggest advantage of India Post is its regulated pricing due to Governmental control and logistics experience of more than five decades. It is a popular choice among small businesses serving customers at remote locations where other 3PL players charge exorbitant prices or often do not deliver. Blue Dart Express Source Blue Dart Express Ltd. is a part of the DPDHL Group's Post-eCommerce-Parcel (PeP) division and hence has access to a giant logistics network and infrastructure across the globe. The company serves more than 36000 pin codes in India and enjoys tremendous popularity among customers for its reliability, experience, and sustainability. Blue Dart has established itself as a 3PL small business leader in the domestic and international air express services, providing the entire spectrum of logistics solutions including repair and return, strategic inventory management and direct express inventory distribution. For small businesses and eCommerce enterprises, Blue Dart has launched Smart Box - Air Express and Small Box - Ground Express, which are convenient and affordable packaging units for speedy and reliable delivery to end customers. Blue Dart has also developed multiple tech-enabled platforms, which the company refers to as E-shipping Tools, to better coordinate shipping management services for small businesses. DTDC Express Source Founded in 1990, it currently caters to over 10000 customers across 17500 pin codes and 430 operating facilities across India with easy accessibility for small Indian businesses. Apart from its Domestic Division which largely handles a large variety of orders, DTDC has established a dedicated Retail Division SBU that caters to the fast-changing requirements of D2C eCommerce brands and small businesses, with economical and customised offerings. DTDC specialises in handling a wide variety of goods including high-value goods, heavyweight goods, and even hazardous materials. On the tech-front, it has pioneered in the introduction of high-tech solutions such as Image-scan of Proof Of Delivery (POD) on the web, Logistics and Warehouse Management applications, Mobile-based instant delivery update etc., which help small businesses minimise delivery-related risks while satisfying end-customers. However, DTDC's prices for certain categories are perceived by small businesses as slightly on the higher side compared to those of its competitors. Ecom Express Source Established in 2012 and headquartered in Gurugram, Ecom Express pursued a business centred around customer-centricity, scalability and sustainability. The company uses latest technology and automated solutions to provide first-mile pickup, processing, network optimization and last mile delivery to a customer base spread across multiple business-sectors. The company has two offerings - Ecom Express Services (targeted as medium and small businesses, including D2C eCommerce enterprises) and Ecom Ground Services (targeted at larger enterprises and eCommerce brands for bulky medium-weight products such as furniture, appliances etc.). Both these offerings are equipped with provisions for QC-enabled reverse logistics. Ecom Express also provides value added services such as Try & Buy, Switch Deliveries and Valuable Goods Handling, which lets it price its services with a premium. Shadowfax Source The company specialises in low-cost hyperlocal deliveries within 30 minutes with API integration and live tracking and therefore can add lot of value to logistics needs of small businesses. It provides fulfillment and logistics services for eCommerce companies and Quick Commerce brands with its feature-rich technology and a closely-knit network of delivery executives, thereby leveraging both the Brand Advantage and Rider Advantage. For small businesses, Shadowfax enables Marketplace & warehouse pick-ups, End-to-end shipment tracking, COD/UPI doorstep payments on the Forward Logistics front and Air/surface transportation, Seller & warehouse pick-ups, Single integration for all deliveries on the Reverse Logistics front. Live imaging for quality check and instant refund issues to customer help small businesses keep their end customers satisfied while minimising risks of fraud. These tech features have enabled Shadowfax to make its mark among the top 3PL companies for small business. TCI Express Source It is a division of the Transport Corporation of India (TCI). While TCI Express specialises in cold chain (for perishable items) and bulky materials transport, it has a variety of offerings for small businesses as well. These include Surface Express, Domestic Air Express, Rail Express and Ecommerce Express. With 28 sorting stations, 51 air gateways and other allied infrastructure, TCI Express serve 40,000+ locations covering 7500 districts across India. The biggest strength of the company as a 3PL small business service provider lies in its completely owned network infrastructure such as warehouses, GPS enabled vehicles, packaging facilities etc., which provides it the flexibility to stretch to the best possible limits to delight customers and become a trusted 3PL small business partner. Delhivery Source Delhivery is a key player in the Indian small business order fulfillment sector. With 70+ fulfillment centres around the country, having a total storage and processing space of over 6 million square feet, it serves over 6000 small businesses across India. All the major demand channels and courier partners are integrated with their own warehouse management system. Delhivery is equipped to support efficient multi-tenant, multi-location warehousing, allowing small businesses to expand operations across India rapidly and flexibly with no fixed expenses. By combining warehousing and freight solutions, Delhivery can provide small businesses with integrated distribution solutions. This allows Delhivery to be one of the best 3PL for small business customers with quick and cost-effective offline delivery. Their services include: Same-day/Next-day DeliveryTime-defined/Slot-based DeliveryPerson Specific/Address Specific DeliveryReturns ManagementProduct Replacement/Exchange ServicesLarge/Oversize Order DeliveryHigh-value Product DeliveryHAZMAT/Dangerous Goods DeliveryReal-time Monitoring and ControlConsignee Address ValidationFraud DetectionFlexible Payment on Delivery GATI Source Founded in 1989, it is one of the leading express distribution and supply chain management firms in India, dedicated to providing smooth and end-to-end solutions to customers, supported by cutting-edge digital tools and technology. It has world-class warehouses and fulfilment centres at strategic locations around the country. Gati helps small businesses in their fulfillment endeavour with its Surface Lite and Premium Flexilite offerings. Gati has also developed a unique niche in its customer base by being a 3PL small business partner for firms selling Art Products (fragile and antique items such as sculptures, canvas paintings, pottery etc) with its premium offering, Art Express. It has capabilities for handling all logistics-related documentation on behalf of the small business owners, thereby helping them focus on their core business. 5 Factors to be Considered for Choosing the Right 3PL Small Business Partner Small businesses aspiring to scale up their businesses can derive a range of benefits by partnering with the right 3PL companies. The challenge is to identify which 3PL partner is best suited to fulfil the specific needs of the business owner. Several factors are considered for selecting the right 3PL company. However, the following five factors are the most important factors considered by business owners while finalising 3PL service providers: Experience & Track Record: It is very important to know about the business experience and track record of a 3PL company concerning its performance and relationship with its principal stakeholders like customers and employees. The 3PL company should be reliable in terms of financial stability, and business ethics and should have a proven track record of handling disruptions. Customer Service: The service provider should have an exclusive and sustainable customer service mechanism in place that is professional and responsive to customer needs and grievances. The service provider needs to have robust warehousing and inventory management facility to ensure safe storage and delivery of the consignments and also for the safe return of consignments in case of non-acceptance by the customers. Flexibility & Cost: The service provider needs to have the ability to be flexible in scaling up operations as per business demands and provide services at a competitive cost by optimising its resources. Geographical Locations: The 3PL company should have a network of fulfilment centers to serve customers across the country and across the world to reduce last-mile delivery costs by maximising delivery speed and efficiency. Technology & Integration: The service provider should have access to the latest logistics software that is user-friendly and can be easily integrated with systems on different technology platforms for real-time information gathering and updates. Demerits of 3PL Companies for Small Business As we have seen so far, there are many merits of 3PL companies for small businesses. However, 3PL companies also bring some demerits for business owners, and they need to be considered while engaging 3PL service providers. Loss of Control Over Goods: The biggest demerit is that the business owner does not have control over the process of delivery of his products to his customers as the whole process is independently handled by the 3PL company. The business owner can only check inventory levels, incoming shipments, and deliveries in real-time by co-ordinating with the 3PL service provider.Finding a Trustworthy 3PL Service Provider: The growth of e-commerce in India has given rise to mushrooming of many 3PL service providers, and many of them may not be of the desired level of competency that is expected of a 3PL service provider. In such a situation, it is difficult to choose the right 3PL partner, and it can be a stressful exercise as the wrong 3PL partner can do a lot of damage to the business.Impact of Bad Service On Business: Despite engaging a 3PL small business service provider, the business owner is solely accountable to his customers for the service provided by the 3PL service provider, and therefore bad service by the 3PL service provider can adversely impact the business of the business owner. Why Should You Choose WareIQ as 3PL Partner in 2024? While most of the 3PL companies for small businesses that we have discussed so far, take care of only the logistics operations, WareIQ offers a full-stack platform that integrates a series of operations essential for fulfillment, such as warehousing, an easily integrable tech platform for centralised monitoring, last-mile delivery/ 3PL and post-shipping experience. So, if your small business is facing numerous problems on the fulfillment front, you should seriously consider outsourcing fulfillment, and choosing WareIQ as your partner can help you save both time and money. Established in 2019, WareIQ, a Y-combinator backed startup, has rapidly grown to be the leading provider of full-stack eCommerce order fulfillment tech solutions for some of the most reputed brands in India. WareIQ offers a full-stack platform for eCommerce companies to enable same day delivery and next day delivery to customers – an Amazon Prime-like experience but accessible to everyone. WareIQ has empowered brands to sell more, sell faster & sell everywhere due to the: Access to WareIQ’s strong nationwide network of fulfillment centers & urban dark stores near their customersAccess to all major national & hyperlocal last mile couriers at discounted rates for making same/next day deliveries possibleEasy integration across multiple online platforms & marketplacesHorizontal marketplaces: Flipkart, Amazon etc.Vertical marketplaces: Nykaa, Myntra etc.D2C platforms: Shopify, Magento, WooCommerce etc.Social commerce platforms: BikayiAccess to a superior centralised tech platform for eCommerce operationsML-based prediction engine for efficient warehouse network design & smart inventory placementCentralised platform for core fulfilment & shipping operationsPost-shipping apps for delightful experience & zero to minimum supply chain leakages (Branded tracking page with smart marketing placements; Trigger-based updates & smart communication platform) WareIQ has customised offerings for merchants experiencing different order volumes as well as having different delivery speed expectations. WareIQ is probably one of the very few fulfillment tech companies in the world that have same day delivery offering for their customers under their product “WareIQ RUSH”. With world-class WMS functionalities, WareIQ handles the entire range of intricate operations in the eCommerce fulfilment process, ranging from Inbound Operations such as scanning and quality check, through 100% accurate Pick and Pack, to Inventory Management across all channels. WareIQ’s next day delivery and same day delivery services are helping eCommerce businesses set new standards with respect to setting customer expectations and fulfilling them with high efficacy. At the same time, WareIQ customers realize significant cost savings and wider reach due to better negotiations with shipping partners, strategically placed warehouses, economies of scale and scope in warehousing, and data-driven decision making. WareIQ’s WMS, a centralised tech platform, is its core offering, with the following functionalities: Shipping Management Integration to all major national couriers and same-day courier partners through WareIQ platform with discounted ratesGeneration of bulk shipping labels & invoices in a few clicksOffering a branded tracking page and sending auto-alerts to inform customers of their shipment statusReduction in RTO % (Return to origin) by automating cases of failed delivery attempts (NDRs) by the shipping partnerPreemption of COD frauds through integrated AI engine flagging risky ordersOrders managementTracking of orders across the channels Filtering of orders by statusSearching for specific ordersA quick timeline view of where the order is in the fulfillment process (e.g. when an order is picked, packed, or shipped)Shipping-related information (e.g., weights, dimensions, or carrier service) A quick snapshot of any orders that require actionSyncing WareIQ’s out-of-the-box integrations with sales channels to eliminate manual importing of data and trigger all the necessary notifications to the end-customersInventory managementTracking of inventory levels across multiple locations & sales channels – the website and marketplacesUsing WareIQ platform to distribute inventory to multiple locations optimizing for speed & cost/orderSetting reminders to proactively replenish inventory, bundle products for promotions, make inventory transfer requests, and much moreWarehouse managementManaging multiple warehouses and offline stores on WareIQ platform100% inventory accuracy with scan-based operationsAutomated reconciliation tool helps to keep track of returns and unsettled invoicesIntegrations with all major ERP & Accounting systemsFulfilled By Amazon and Prime StatusAssured tag on Flipkart without physically dedicating inventory to them The central platform helps to better manage undelivered orders by reducing NDR processing time by 12 hours – a multifunctional NDR dashboard helps to track and take immediate action for undelivered orders in real-time, thereby reducing RTO by up to 10%. Automatic replenishment recommendations and easy purchase order creation capabilities on the WareIQ platform further empower eCommerce companies to leverage all possible ways of increasing their ROI. Best 3PL for Small Business FAQs (Frequently Asked Questions) What are the three types of 3pl company? • Asset Based• Management Based• Integrated Providers What are the benefits of a 3PL provider for small business? • Time Efficient• Drive Cost Savings• Ensures Good Customer Service• Gains Flexibility and Scalability• Enables Business Growth and Market Expansion How does 3PL charge money?3PL procurement companies either charge per-project fees or account retainer fees depending on the complexity and frequency of business needs. What is 3PL procurement?Third Party Logistics Services, also known as 3PL are anything that involves management of one or more aspects of procurement and fulfillment activities. In the ecommerce business, 3PL refers to any service contract that involves storing or shipment of goods.

May 28, 2022

Dropshipping vs 3PL: What is Right for Your Business in 2024?

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 2024. 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 storesCustomer orders a product from the online platform of choice where the store is locatedThe customer is invoiced for the product and an additional shipping feeThe seller now replicates the order with the manufacturer or supplier networkThe 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 networkProducts are sent to the order fulfillment center for storageCustomers place an order from an online store or preferred platformCustomers are invoiced and order details are shared with the 3PL partnerThe 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 2024? 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 customersAccess to all major national & hyperlocal last-mile couriers at discounted rates for making same/next day deliveries possibleEasy integration across multiple online platforms & marketplacesHorizontal marketplaces: Flipkart, Amazon, etc.Vertical marketplaces: Nykaa, Myntra, etc.D2C platforms: Shopify, Magento, WooCommerce, etc.Social commerce platforms: BikayiAccess to a superior centralised tech platform for eCommerce operationsML-based prediction engine for efficient warehouse network design & smart inventory placementCentralised platform for core fulfillment & shipping operationsPost-shipping apps for delightful experience & zero to minimum supply chain leakages (Branded tracking page with smart marketing placements; Trigger-based updates & smart communication platform) WareIQ has customised offerings for merchants experiencing different order volumes as well as having different delivery speed expectations. WareIQ is probably one of the very few fulfillment tech companies in the world that have same-day delivery 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) What are the advantages of 3PL over dropshipping?• An infinite supply of inventory• Exceptionally scalable and adaptable• Maximum convenience at lowest cost• Helps you save time and money• Good customer experience What is the one similarity between dropshipping and 3PL?The retail store does not handle the items in either the drop shipment or 3PL procedures. This means that third-party companies in 3PL handle product packaging and shipping, making it easier for online sellers. What are the benefits of dropshipping?• Less capital investment• Easier than 3PL to start • Low overhead expenses • Flexible locations • Deal in variety of products What are the disadvantages of dropshipping?• Limited Profits • Less control over Inventory • Shipping is slow and expensive What would you choose, Dropshipping or 3PL?Dropshipping is an easy way and sometimes worth starting too. But the profit margin might be minimal as compared to 3PL. In short A retailer has a lot to gain by using the 3PL service.

May 28, 2022

14 Best Ways to Reduce RTO Charges in eCommerce in 2024

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 2024 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 2024: 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 costsDisable COD for untrustworthy and blacklisted customers automatically.Identification and deletion of duplicate ordersVerification 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 WareIQ3 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 What is an RTO or Return to Origin?When an order is not delivered due to some issue or is delivered and is sent back to the seller for a particular reason, the process of return is called RTO. It impacts the seller because it is an extra expense that has to be incurred by the seller. How does RTO impact an eCommerce seller?It negatively affects an eCommerce business due to loss of money, time, energy and increases the chances of product damage. If an order offers free delivery and an RTO is initiated, the entire delivery and return logistics costs are borne by the seller. How can a seller reduce RTO costs?There are several ways to reduce RTO costs such as optimizing logistic costs, partnering with fulfillment centers, verifying addresses, promoting COD orders, marking higher individuals with high rates of RTOs, using an RTO shield, etc. How does WareIQ help eCommerce brands reduce RTO via RTO Shield?WareIQ's RTO Shield or Return to Origin Shield gives eCommerce and D2C businesses a complete checkout strategy and helps reduce RTO losses and increase revenue.

May 16, 2022

eCommerce Logistics Guide: Definition, Processes, Factors to Evaluate and the 10 Latest Trends of Logistics in eCommerce in 2024

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 2024? 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 2024 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 What are the basic steps in eCommerce logistics?• Order packed • Package handed off to the carrier • In carrier network • Out for delivery How do logistics for eCommerce business work?It works in two steps:Forward logistics: Distribution and delivery of goods to customers.Reverse Logistics: Return or replacement of defective, damaged, or wrong shipments. What payments are accepted in eCommerce logistics?Both prepaid and cash-on-delivery (COD) services are available. What is the goal of WareIQ as an eCommerce logistics business provider?WareIQ’s goal is to offer Amazon Prime-like logistics to all eCommerce & D2C brands in India, enabling same-day & next-day delivery for all their customers. With WareIQ, online brands can sell on multiple online marketplaces & platforms; that is, they can sell anywhere & everywhere. Does WareIQ take care of reverse logistics for eCommerce?Definitely. They have a proper team and multiple courier partners handling reverse eCommerce logistics. WareIQ has solutions for every touch point across the value chain - both forward and reverse logistics. What is an eCommerce supply chain?The supply chain in e-commerce is the overall value chain that dictates the logistics of an online store. Basically, it refers to the procurement of raw materials, manufacturing, distribution, storage and final delivery of the finished products to the online shopper who has placed an order from any of the eCommerce marketplace or online platforms.

May 05, 2022

How to Reduce Logistics Costs? Top 10 Ways to Reduce Logistics Costs in eCommerce in 2024

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 forecastingSky-high production costsReduced inventory turnoverUnexpected overheadsFailed or delayed deliveriesMistakes in data keepingLoss 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 purchasingStack 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 transportationMiddle Mile TransportationLast Mile TransportationReturns and reverse pick-ups Transportation costs are a function of - Load per trip or UtilizationDistance of tripType of vehicle used to transportDefined commercials for tripDelivery window to customerType of product being transportedNumber 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. 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 2024 Source Here are 10 Proven Tips by experts for year 2024 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 centersWareIQ Intelligently places inventory across its network of 20+ FCsWareIQ picks, packs & ships orders across the online/offline channelsWareIQ'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) What are the ways to reduce transportation logistics costs?• Reduce Cart Abandonment Rate• Increase Average Order Value• Minimize Travel Times• Centralize Procurement• Consolidate Shipments• Focus On Informed Decision Making• Automate Warehouse and Logistics Processes• Outsource Logistics to a 3PL How does WareIQ help in reducing logistics costs for your eCommerce business?• Affordable warehousing costs• Bulk carrier discounts • Latest technology and forecasting• Scalability of business without any upfront investment• Access to WareIQ’s fulfillment centers & dark stores across India without any investment in warehouse infrastructure• WareIQ’s analytics and recommendation platform for smart inventory placement• Recommendation engine for choosing the best courier partner Why should you hire a 3PL logistics provider like WareIQ to reduce logistics costs?There are too many hidden logistics costs. The best way to avoid them is to outsource logistics to an experienced 3PL logistics company so that you can focus on your core business metrics. What is logistics in simpler words?The process of managing and executing the efficient transportation and storage of goods from the point of origin to the end customer is logistics.

April 30, 2022

10 Best Reverse Logistics Companies for Efficient Returns Management in eCommerce in India in 2024

The chain of supply moves both forward and backward. Logistics companies strive to get the shipment to the customer at the earliest time and in the safest way possible. However, the order is said to be unfulfilled until the customer happily accepts it. If the customer doesn’t like the product and wishes to return it or submit another product for recycling, the company needs to pull it back. Reverse logistics companies are needed to handle this process. Let’s take a look. What is Reverse Logistics? Ecommerce Reverse logistics is the process of getting an already delivered product back from the customer. It follows the same supply chain process, but in reverse. Being the polar opposite of the conventional supply chain, reverse logistics originates with the customer and ends with the product manufacturer or retailer. The process is sometimes triggered at the warehouse or storage facility, and the product needs to be shipped back to the seller. Even unsuccessful B2C deliveries, especially in the case of eCommerce purchases or B2B returns to the distribution centre, require reverse logistics. And, then, let’s not forget those instances wherein the delivery person spots damaged goods and marks these for return immediately. So reverse logistics has many use cases, especially in the case of small businesses who need to offload their reverse logistics requirements to a competent 3PL company. Either way, the Reverse Logistics Companies assist in moving the product from the origin to the destination. Here are the stages of this backward supply chain: Initiation of return: The customer or delivery partner initiates the process of return. Reverse Logistics Companies then accept the request. Shipping of the returned product: The shipment is then picked from the customer and brings it back to their warehouse or place of processing. Processing of the return: Then thorough checks are run to assess any damage to the product. Receipt by the seller: Once the seller receives the product, it can either be resold or recycled, depending on its condition. Instances of resale: If the product quality has not deteriorated, the company resells it via the same process. Instances of recyclement: If the product cannot be used again, it is sent for recycling. Commencement of conventional supply chain: Once it is ready, the product is put up for sale again. It undergoes the forward supply chain process from scratch, to reach a new end customer. [contactus_gynoveda] What are the 5 Rs of Reverse Logistics? The entire process of reverse logistics runs on these 5 Rs: ReturnsResellingRecalls or RepairsRecycleReplace Let’s understand what each process entails. Returns The eCommerce marketplace leads the amount of returns, although the rate of returns has slowed down from an average of 22% in 2020 to 18-20% in 2021. This trend was ushered in by customers’ growing confidence in shopping online. The lockdown situation then further pushed customers to become accustomed to online purchases. Companies strive for the lowest return rates, as it enhances their brand image, but such exchanges happen for several reasons. Sometimes, customers trigger the return when they are not happy with the product or if they received a wrong product and wish to exchange it. There are instances when they order more than they need or change their minds when unpacking the product. There are also returns due to delayed deliveries. Read this blog on branded shipping to understand how it helps deliver a superior shipping experience and limits the need for returns. Product Return is the first step in the process that reverse logistics companies handle and also the most critical because it deals directly with the end customer. Handling it poorly can harm the company’s image and service feedback. Whether the business is B2C or B2B, the steps taken by reverse logistics companies to process the return are similar. Here’s the list: Accepting customer requests through the company’s portal or manually through customer careAnalyzing and defining the actual reason for return.Processing the exchange request, if anyIssuing return labelsReadying the labels and other documentation for pick up from the customer’s locationNotifying the customer at every step, to gain their confidence Reselling Once returned to the manufacturer or the seller by reverse logistics companies, the product undergoes stringent checks to assess any damage or quality depletion. If the returned product is reusable, the company aims to resell it as a new or returned product. This trend is escalating in many industries, especially the fashion and textile industry. Fashion waste amounts to 92 million tonnes per year and is forecasted to increase to 134 million tonnes by 2030. Burgeoning customer awareness about sustainable living is driving the expansion in reselling and reusing products as much as possible. As a result, there is a growing interest and demand for returned items, especially in the fashion industry worldwide. It is evident that the second-hand and resale market is multiplying and is expected to be valuated at $53 billion by 2023. Recalls or Repairs Some products that are delivered to customers may have manufacturing defects. Some of these recalls are triggered by statutory policies or potential health hazards. eCommerce companies recall these faulty products back to their storage or production facilities for repair before sending them back to the customers. Recalls are trickier than returns as the brand image, and substantial monetary liabilities are involved. Product recalls are followed by repairs and then re-delivered to the customer or exchanged if the products cannot be salvaged. However, some companies undertake to return the customers’ money to retain and enhance brand loyalty. Recycle Globally, humans produce 2.12 billion tons of waste every year, out of which only 13% is recycled. However, sustainable practices are on the rise, and companies are adopting eco-friendly business methods. Recycling paper and waste material is the norm, and so is recycling returns that cannot be reused or resold as it is. All industries are under pressure to employ the reduce, reuse and recycle strategy for efficient waste management. However, many enterprises, especially in the electronic and tech industries use a 3PL recycling partner to develop recycling strategies. Reverse logistics companies consider the life cycle assessment of the returned order an essential step in the process to smoothly deliver the product back to the retailer. It evaluates the product’s condition and helps ascertain its impact on the environment. Smart recycling is critical for companies. If done right, companies can save reusable components of the product and avoid government penalties for poor waste management. Replacement Many customers find shipping a faulty product back to the manufacturer or seller to be a tedious process. Some sellers even prefer replacing the product instead of repairing it. The delivery personnel carries the replacement when they pick up the faulty product from the customer’s location. The defective unit can then be packed in the same wrapping material as the replacement. These practices help to save on transportation costs and prevent expenses incurred for packing the old unit. Moreover, this method also saves time for the customer and reverse logistics companies. What Services do Reverse Logistics Companies Offer? They offer most of the services covered in the five Rs of Reverse Logistics. They are listed below: They offer picking up the returned product from the customer and delivering it back to the manufacturer or retailer. They also inspect the product for any damage.Repacking and labeling the product for resale are offered by some reverse logistics companies, as per the requirements of the seller.Taking the replacement during the pick-up process of the returned order, as per the requirements of the seller, and results in saved time and monetary resources. Keeping customers informed about the status of pick-up or replacement.Assisting in generating refunds are provided by them..Providing omnichannel services to sellers and their customers to ensure coverage via all channels What are the Benefits of Partnering with Reverse Logistics Companies? Delegating the humungous task of reverse logistics to dedicated companies brings in many rewards. The most crucial ones are: Increasing customer satisfaction: The presence of reverse logistics companies in the scheme of operations brings in better customer feedback. Such associates provide timely pick-ups and transportation of the returned product to the origin, thus saving time for the company.Curbing of losses: Reverse Logistics causes many expenses for the service provider and they help prevent that. Some countries, like the US and Canada, allow companies to employ a no-returns policy.Facilitating reuse of returned products: They help to manage the returns process, a business does not need to be wary of product returns or recalls. These companies can take away all the headaches that are generally associated with the backward supply chain. The products and parts brought in by the reverse logistics partner are either reused or recycled by the company. Timely and safe returns further encourage businesses to salvage their products, thus enhancing their supply chain’s overall value and eco-friendliness.Improving the sustainability quotient: When a customer returns a product beyond redemption, the seller can ensure it is disposed of in an eco-friendly way. Reverse logistics companies help businesses ensure the sustainability of operations.Offering valuable business insights: A business can gain valuable insights from reverse logistics companies in the various processes involved in reverse logistics, thus streamlining its operations.Planning the delivery process: Their dispatch software and route planning apps allow them to foresee and schedule the pick-up and delivery of returned goods during their existing trips. This saves time and the requirement for multiple runs for delivery of products and pick-up of returns. Read this article about micro fulfillment to understand how it can help reduce delivery times and increase customer satisfaction. What are the Challenges of Partnering with Reverse Logistics Companies? Not everything would always go according to plan when a business partners with reverse logistics companies. There are bound to be challenged in collaboration. Let’s see what they are: Poor integration of systems: Most 3PL reverse logistics companies have their in-built systems that integrate with the seller/manufacturer’s system for an unhindered flow of information. They assist the sellers and even themselves, in coordinating their operations. Most of these systems use cloud-based technology that helps both parties automate the returns process, pick-up and delivery for drivers, and sync order details and other information seamlessly. But it would be meaningless if they don’t integrate well with the seller’s system. For instance, when the seller triggers a Return Merchandise Authorisation (RMA), These companies must receive it as an acceptance of the return request. Therefore, any tech loophole can cause an issue in the completion of the order-return process. They are also liable to provide information about the shipment’s whereabouts to the seller. The inability to update this data in real-time can disrupt the critical stream of updates between the intermediaries and sellers. Communication gaps: Multiple layers of processes exist between the manufacturer/seller and the end consumer in a supply chain. Adding 3PL reverse logistics companies to the equation can further distance the communication gap between the two ends, thus disrupting the information flow from the customer to the seller/manufacturer via the reverse logistics partner. Most customers form an opinion of a brand based on its return policy and performance. Therefore, a deficiency in this domain can cost the business its clientele. Collaboration issues: One of the critical layers in the chain of supply is the transportation or delivery personnel. Problems sometimes arise with the delivery and distribution of the end product and its return. Such chaos in collaboration with the delivery personnel of 3PL reverse logistics companies can cause more hindrances to smooth transportation. Inadequate connectivity: To reach the customer to pick up the return is the first requirement for reverse logistics companies. The inability to cover a customer’s pin code can halt the backward supply chain before it even begins. In addition, poor roads and inadequate signage can slow down the pick-up partner in reaching the customer’s location and delay the order fulfillment process. More so, if the customer resides in another country, where different laws and regulations come into play, it can cause a big delay. How to Choose the Right Reverse Logistics Companies for Your Business in 2023? Businesses must do some research before partnering with reverse logistics companies. Some important information that you should know in 2023 has been listed below: Previous experience: The businesses need to ensure that they tie up with those who have relevant experience or knowledge of the required operations. The retailer should know the reverse logistics companies' expertise in working with similar industries, how long they have been operating, their success rate, geographical coverage, among other factors before signing up. Restrictions on product type: A seller must check if reverse logistics companies can handle their product type if and when there is a return by a customer. The product's condition varies when it is picked up from the customer, as compared to being dispatched by the manufacturer. The partner picking up the return must be able to handle it well without causing additional damage. For instance, if it is a fragile or time and temperature-sensitive product, the logistics partner must have the required resources and know-how to bring it back safely to the warehouse. Systems and integration: The in-built systems of reverse logistics companies must be efficient and integrate seamlessly with the sellers platform. As discussed above, the dispatch and route analysis software are critical in the smooth execution of reverse logistics. Therefore, businesses must ensure the logistics partner’s systems fit in well with their software to ensure a smooth flow of real-time information. Timelines for processing returns: Timing is vital in supply chain management, and customers don’t like to wait beyond the promised period. Businesses need to ensure that reverse logistics companies can match their service timelines. These durations must be in sync with the customer's expectations. Rate plans: The reverse logistics cost is almost 75% higher than 4 years ago, and companies spend around 9-15% of their revenues on backward logistics. Hence, companies must check the rates of each service at every step of the process to identify any hidden costs and clarify them. Warehouse network: The companies responsible for reverse logistics that operate in multiple locations closer to primary customer hubs can serve retailers at a quicker pace. A business must check the geographical proximities of reverse logistics companies to their customer hotspots or their own warehouses. Current capacity: A business needs to know the current capacity of reverse logistics companies, in order to hand over their requests for returns to them. A partner can only be selected if they can handle the business’ workload of the return requests. Plans for expansion: This question must be focused on the plans and range of services of reverse logistics logistics companies to expand their reach across the country. The seller can also seek to know their performance appraisal measures. Omnichannel returns: Most players in the supply chain can diversify their modes of distribution by adopting multi channel selling like online marketplaces and offline retail stores. Therefore, the business must know in advance how reverse logistics companies will be able to cover return requests from all channels. A few modes of omnichannel returns include in-store returns, different drop-off spots, customer doorstep pick-up, or return via courier. Giving them more return options ensures higher customer satisfaction. Insurance Coverage: Accidents and mishaps can occur, sometimes out of anyone’s control. In case of delays, damage to the goods, or any other unforeseen contingency, reverse logistics companies should be able to raise the claim. The seller must be aware of their insurance policy to stay protected. Top 10 Reverse Logistics Companies in India in 2023 WareIQBluedartEcom ExpressXpressbeesShadowfaxDelhiveryAramexTCI ExpressBizlogFirst Flight Couriers WareIQ Source By providing a full-stack eCommerce fulfillment solutions and giving its users an experience similar to Amazon Prime with same-day and next-day delivery, WareIQ has evolved to be one of the most excellent fulfillment firms in India. Established in 2019, this Y-combinator backed Shipping Aggregator is accessible to anyone. Besides its stronghold and expertise in the eCommerce fulfillment sector, WareIQ as a Shipping Aggregator stands apart from the rest because of the following aspects: Discounted rates and access to all major national couriers, as well as last-mile delivery services and couriers, guaranteeing next-day delivery and same day delivery service. This is extremely crucial for sellers as they can ensure that they live up to their service level and enjoy a higher customer satisfaction rate, thus leading to further business.A powerful pan-India network of fulfillment centers, urban dark stores, and logistics network of national & hyperlocal shipping partners—all located near their clients, allowing them to provide timely and cost-effective logistical solutions.A centralised logistical centre and tech platform for all eCommerce fulfillment based requirementsA centralised platform for core operationsPost-shipping apps provide tracking capabilities and a smart communication platform to offer the greatest client experience. Multiple products and features are provided, such as the “WareIQ RUSH” that ensures same-day delivery and is amongst the rare fulfillment tech companies in the world, let alone India, to provide such a service, and is thus amongst the best fulfillment companies in India. WareIQ customers benefit from considerable cost reductions as a consequence of WareIQ negotiating the best terms with shipping partners, strategic warehouse presence, and data-driven decision making. WareIQ’s central platform possesses a multifunctional NDR dashboard that helps reduce the processing time of NDR by 12 hours and reduces the RTO by 10%. Related Search: Top 10 Logistics Companies in Mumbai Bluedart Source Blue Dart Express Ltd. is a South Asian express air and integrated transportation & distribution company, headquartered in Mumbai. It offers reliable and secure delivery of consignments to over 35,000 locations in India. It was founded in 1983 and in its early years, Blue Dart had an agreement with Gelco Express International (UK), for the operations of international air package express services from India. Has delivered consignments over 35,000 locations in IndiaHas delivery services covering over 220 countriesHas distribution services including air express, supply chain solutions, customs clearance, and freight forwardingHas warehouses at 85 locations across the nation as well as warehouses at the 7 major metro cities (Delhi, Mumbai, Ahmedabad, Bangalore, Hyderabad, Kolkata and Chennai)Has state-of-the-art Technology, indigenously developed, MIS, for Track and Trace, ERP, Customer Service, Space Control and ReservationsHas a subsidiary service called Blue Dart Aviation that is dedicated to support time-definite morning deliveries through night freighter flight operationsHas a countrywide surface network to complement air servicesHas eCommerce B2C and B2B initiatives including partnering with a few of the prime portals in the country Ecom Express Source Ecom Express Ltd. is an end-to-end technology enabled logistics solutions provider in the Indian e-commerce industry, headquartered in Gurugram, Haryana. It was incorporated in 2012 by a team with several years of experience in the Indian logistics and distribution industry. The company has established its presence in the industry due to a differentiated business model which is built on delivery service capability, customization, scalability, and sustainability. It uses cutting-edge technology and automated solutions to enable first-mile pickup, processing, network optimization and last-mile delivery. The company’s products include Ecom Express Services (EXS), Ecom Digital Services (EDS), and Ecom Fulfilment Services (EFS). Has a presence all over the country including 29 states and union territories. It operates in across 27,000+ PIN-codes over 2650+ townsHas also invested in Paperfly, Bangladesh’s largest third-party e-commerce logistics (3PL) firm. Xpressbees Source Xpressbees is a logistic solutions company founded in 2015 and is headquartered in Pune, Maharashtra. It specialises with Last-Mile Delivery, Reverse Logistics, Channel Management, Dropshipping, Software Solutions, Payment Collection, Fulfillment Status, Fulfillment Services, Cross Border Services and Transportation. It has logistics solutions across B2B Xpress, B2C Xpress, Cross-border and 3PL (Third Party Logistics) that come with an edge of accuracy, speed & scalability. It consists of a distribution network that penetrates 2000+ cities and towns across the country. With time, it has emerged as trusted logistics partners for the biggest names in eCommerce, health care, grocery, heavy machinery, finance, and automotive. Has 3000+ offices & service centersHas 52+ cargo airportsHas 500+ customer care executives Has 100+ fulfillment hubsHas 10 Lakhs sq ft of warehouse capacity Has 35,000+ staff and executives Shadowfax Source Shadowfax is a logistics company founded in 2015. It uses machine learning and artificial intelligence to ensure that supply keeps up with demand in the hyperlocal distribution environment, which is rapidly developing and extremely fragmented, and to provide a fantastic end-user experience. Shadowfax launched India's first delivery SuperApp in October 2021 to help delivery partners expand faster by giving them access to different opportunities through a single platform. Has expanded to a staff of close to 5000 peopleHas 100K+ daily active users Is active in more than 600 cities throughout IndiaPromises to be able to fulfil 1 million orders each day in more than 7000 different pin codes Delhivery Source Delhivery, since its inception, has successfully fulfilled over 1 billion orders across India. Their aim is to build an efficient operations model for business, through a combination of world-class infrastructure, cutting-edge engineering and technology capabilities and logistics operations of the highest quality. It is one of India’s largest and most popular courier companies that is also homegrown. It offers end-to-end fulfillment solutions and serves over 17,000 pin codes and 175 cities.It offers features such as sending tracking details to customers through SMS and provides same-day/next-day delivery options.It provides multiple payment options at the time of delivery. Aramex Source Aramex is based in the UAE and was established in 1982 with offices in Amman and New York. Their legacy, robust IT infrastructure and nationwide consolidation centers provide customised reverse logistics solutions to the customers. Offers customized return resultsHas the ability to integrate its return portal according to guidelines offered by customersHas a custom payment platform called Aramex Payment Services Has automatic language selection grounded on IPHas 24/7 return requests Has multi-language support TCI Express Source Transport Corporation of India started TCIExpress as a major division in 1996 and has grown over the years to become a household name in express delivery services. The company offers to pick up from 3000 locations across India and keeps a tab on the returns via their centralised system. Speed is an essential part of their services. Has transparent and cost-effective pricing Offers a vast number of reverse logistics servicesOffers services such as supply chain consultancy, inbound logistics, warehousing/distribution center management, and outbound logistics, and in-plant stores & yard management Bizlog Source A tech start-up specialising in reverse logistics, Bizlog serves 53 locations across the nation and is aiming to serve more than 100 in the near future. They offer reverse logistics services from pick-ups, inspections, packaging, repairs and exchanges, insurance and warranty. Pays attention to services such as reuse, refurbish, resale and residual valueServes B2B, B2C, and C2C & C2B with its modular technological platform along with a technically trained team First Flight Couriers Source Based in Mumbai, First Flight Couriers offer expert reverse logistics services. They pick up the return from the customer or the retailer and provide thorough inspection and exchange for unredeemable products. They also offer tracking services every step of the way. Offers a vast array of reverse logistics servicesOffers exchange of merchandiseHas a comprehensive track & trace facility for ordersHas a global reachOffers cost-effective and transparent pricing Conclusion: How is WareIQ the Best Reverse Logistics Company for an eCommerce Business? WareIQ offers a couple of advantages that make it the ideal choice for reverse logistical solutions. Smart Platform: WareIQ’s advanced supply chain tech studies the market trends, order density and conducts an in-depth slotting analysis to suggest the best way to move their returns. Decentralised Warehousing: WareIQ believes that the closer you are to the customer, the faster you can serve them. The company promises to reach 90% of Indian cities within 48 hours. Efficient Integration: The company’s superior-tech ensures extensive integration with all prominent national and regional courier service providers. This enables same-day deliveries in metros. Preventive Checks: As a preemptive measure, WareIQ’s track record of delivery TATs ensures the businesses never face a loss due to delayed delivery or a lack of information. They also run thorough address checks to ensure the package doesn’t return to its origin due to incorrect details of the customer’s whereabouts. 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 has customised offerings for merchants experiencing different order volumes as well as having different delivery speed expectations. WareIQ is probably one of the very few fulfillment tech companies in the world that have same-day delivery service for their customers under their product “WareIQ RUSH”. With world-class WMS functionalities, WareIQ handles the entire range of intricate operations in the eCommerce fulfilment process, ranging from Inbound Operations such as scanning and quality check, through 100% accurate Pick and Pack, to Inventory Management across all channels. WareIQ’s next day delivery and same-day delivery services are helping eCommerce businesses set new standards with respect to setting customer expectations and fulfilling them with high efficacy. At the same time, WareIQ customers realise significant cost savings and wider reach due to better negotiations with shipping partners, strategically placed warehouses, economies of scale and scope in warehousing and data-driven decision-making. Related Article: How to Reduce Logistics Cost? [signup] Reverse logistics companies FAQs (Frequently Asked Questions) What role does reverse logistics play?Reverse logistics services are designed to transport products from their point of consumption to an end point to capture value or properly dispose goods and materials. It is responsible for collecting goods, their transportation to a central location, and sorting them according to their final destination. What are five R’s of reverse logistics?• Returns• Recalls• Repairs• Repackaging• Recycling What are the best reverse logistics company in India?• WareIQ• Bluedart• Ecom Express• Xpressbees• Delhivery Does WareIQ provide reverse logistics?Yes, WareIQ has solutions across every touchpoint of the value chain.• Disposal• Value Recovery• Re-inventorization• Smart RVP or Reverse Pickup What are the common problems faced by reverse logistics companies?• Reverse logistics costs are high• Inability to comprehend the reasoning for returns• Lack of visibility into the products that have been received• Insufficient labor resources to "handle" returns• Chances of product damage during transit What do you mean by green logistics?Green logistics entails reducing the environmental impact of logistics by employing more environmentally friendly and sustainable processes. This method considers the complete product life cycle, including manufacturing, storage, transportation, marketing, consumption, and disposal. Related Article: List of Top 10 Warehousing and Logistics Companies In Delhi NCR and Ghaziabad

April 26, 2022

What are eCommerce Logistics Costs? 10 Types of Main Logistics Costs in 2024

E-Commerce Logistics is the operations involved in storing and shipping inventory for an online marketplace, including inventory management and the collecting, packing, and shipping of online orders. With countless bundles shipped across different countries on any given day, systems must be in place to keep them on track and ensure that they are safely delivered to the right place, within the estimated time. Efficient management of eCommerce logistics comes along with the costs associated with it. Read along to understand various types of logistics costs & various ways in which eCommerce logistics companies can reduce costs for eCommerce & online D2C businesses. What is eCommerce Logistics? eCommerce logistics begins with moving inventory from the place of the manufacturer and keeps going until it reaches the customer’s accurate location. eCommerce fulfillment is one of the riskiest methods of eCommerce logistics, and various components involved in eCommerce logistics are listed below: Inventory managementWarehousing and storageOrder fulfillment All components are very complex compared to one another so handling these processes smoothly is no easy task. Businesses should guarantee their stock levels as sufficient in a distribution center, close to that customer’s location. If they outsource fulfillment, their 3PL must be good and satisfy the fulfillment of orders in a fast manner, even during holidays or any peak season periods. If any mistakes take place in conveying the confirmation to the customer or implementing the process within your retail supply chain, it reflects negatively on the business. [contactus_uth] What is the Importance of Understanding Logistics Cost? Logistics cost is the expenses that are incurred through the logistical aspect of a company. That refers to things such as the number of packages, transportation, and storage facilities. However, planning and decision-making frequently result in excessive costs. Therefore, examining industry operations and making processes more efficient are significant policies to reduce a company’s costs. Paying attention to the control of logistics costs helps the business keep these costs as low as possible. What are the 10 Main Types of eCommerce Logistics Costs in 2024? The logistics area encompasses all the processes that occur within the supply chain. During these processes, the flow of materials involves many storages and movement techniques, planning, resources, strategies, and workers in an organization. However, the logistical cost may vary from one company to another, as there are many variables involved. There are also fixed costs in every company. Some logistics costs are listed below: Storage and inventory Logistics and inventory costs depend on the number of goods that the company works with and the duration of storage of inventory in the warehouse. Thus, we can conclude that the longer goods spend in the fulfillment warehouse, the larger the logistics expenses are. (Read how you can reduce inventory-carrying costs.) It is also essential to note that inventory expenses are separated into product cost, product shortage cost, and maintenance cost. Product cost is related to the investments that are made in every commodity that is picked up by the suppliers. Product shortage cost has to do with the absence of items and the influence that this can cause. Maintenance costs are connected to taxes, labour, physical space rental, inventory, etc. This contributes to the effective working of the entire organisation. Packaging A principal factor for receiving a good review from customers who purchase your goods is the packaging process and it should be done adequately. Thus, it is viable to insert some safety precautions to avoid damage and destruction of goods and hence expect good customer feedback. With this issue, it's additionally possible to avoid wasting and optimize the use of space. This is a result of correct packaging and is crucial to generating savings in prices and storage space. Transportation and freight Transportation costs in eCommerce logistics costs is one of the main expenditures of companies that specialize in distribution facilities. This is often a result of this sector involving the acquisition of vehicles, fuel, maintenance, depreciation, and idleness, among others. With challenges such as theft of goods, accidents, and the long distances that goods have to travel, the risk of working in this field increases. As a result, it is critical to invest in this sector. Technology Nowadays, competitiveness is increasing in the eCommerce space. Most companies are facing some challenges in delivering goods at a fast pace. People also expect their order within one or two days. The good news is that technology is able to automate many of the processes involved in eCommerce. The use of digital platforms, for example, is important for the logistics sector to work with high turnout. Another important factor is that it helps to reduce errors and inconsistencies. Finally, it gives agility and effectively reduces logistics costs. Financial designing As mentioned previously, knowing about logistics valuation is a necessary step in knowing what steps to require. With well-established expenses, successive steps are required to form an action plan within every logistics sector and improve the techniques. Structuring processes If there is no structure in the logistics process, every employee will do their work in their own way. But this will cause failures and a waste of time. So with this in mind, process mapping will be the best solution. Understanding the flow of business activities permits managers to strategize and confirm the order of the process to be followed. This has to be reviewed regularly. It is possible to create a higher level of monitoring of each sector and its productivity. Task automation The work involved in processing the task manually frequently drives the cost up since it takes more time and errors take place at higher rates. So automating important processes will benefit the company. Programmed machines and software are gaining importance because work is done in as short a time as possible and more efficiently. Fuel Surcharges Fuel Surcharges are the fees that add to the logistics cost due to the operation of vehicles. These fees are added by the trucking companies and consumers end up paying the fluctuating fuel costs. Fuel surcharges are calculated based on your freight volumes so facing unexpected heavy fuel surcharges is a common occurrence. Handling Fees Handling fees are also a fee that takes place in eCommerce logistics. This sudden charge is given to the customer at different rates based on the retailer’s logistics partner. These fees include the costs of preparing and moving the products at the time of transportation. This does not include the shipping rate. Restocking Fees A customer may not be satisfied with their ordered products. They decide to return an item to the warehouse. Then the item can be restocked in the inventory for resale purposes. Any eCommerce business that depends on a logistics partner for inventory and storage needs to bear the prices of this activity. Some e-commerce businesses combat this by giving customers a partial refund for returning things while withholding a standard amount to hide the restocking fee. Suggested Article: Managing eCommerce Returns How to Manage and Reduce eCommerce Logistics Costs in 2024? Logistics plays a very important role in company management. Through management and execution planning, you can optimize processes, cut back on its prices and increase your profit. Given below are a few tips on how you can reduce eCommerce logistics costs. Use Different Methods of Transportation You can reduce the cost by being more adaptable to the modes of transportation your business uses. Shipping goods by air is usually costlier compared to shipping goods by road. However, the time it takes to ship by road may cost you sales. So stay informed on the price of the amount of all modes of transportation and you can change your preferences if you need to. There is also intermodal transportation if you are dependent on single modes. So rail transport is very low in cost compared to the cost of transportation on by trucks. Embrace Automation in Your Logistics Process Another process to reduce the eCommerce logistics cost is by including automation in your logistics process. If your business can track shipments from start to end, they can know if there are any problems faced in transportation logistics. This will show you live information on unexpected delays as well as allow processes to get faster and more cost-effective. Improve Supply Chain Visibility Checking and maintaining the control and clarity of your supply chain may nullify any sudden increase in logistics costs. Tracing and maintaining control over your components and products can quickly decrease shipment delays or service disruptions. Other routes of supply can be implemented faster, and this helps us to control the cost. You can find disruptions in your company’s logistics process if you use real-time dashboards and it can give you good insights into mitigating possible issues later. One of the best ways to reduce eCommerce logistics costs is by working as a group with one of your suppliers to reduce the costs. In other cases, logistics suppliers will cover direct logistics costs. Look for Opportunities to Consolidate Shipments and Space If you are waiting for a chance to consolidate your shipments, you may need to know about less-than-truckload (LTL) shipments. This is a good option for shipments of lower weight. If you can consolidate shipments for a variety of customers or products into a single shipment, you have a chance to save money by using full-truckload shipping. You have to identify any wasted space and try to mitigate it. Your business can improve storage density by increasing the vertical space with bins. This can minimize the faults that shipping containers sustain by decreasing movement at the time of transportation. Outsource to a 3PL Provider By outsourcing to a third-party logistics (3PL) provider, you can remove the need for investing in transportation, technology, space, and staff members to initiate the logistics process. Many companies offer logistic solutions for optimizing the logistic process and decreasing costs. A company such as WareIQ can work with you one-on-one from beginning to end, providing your business with custom, targeted delivery solutions. From on-demand and same-day with routed delivery choices, our team can work with you to resolve problems and realize the solutions that exceed your expectations. With our transparent pricing, you will know how much your logistics, warehousing, or delivery services will cost. How can Outsourcing Logistics Requirements to a 3PL eCommerce Logistics & Fulfillment Company Reduce Logistics Costs? 3PLs are simply logistical fulfillment companies that are involved in the process of inventory storage, packaging, and shipping. Of course, 3PLs charge varying prices for each service, but it's usually overall less expensive to leverage their scale and resources rather than attempt to do it yourself. Affordable warehousing costs Warehouses are getting costlier, and are also demanded more. If you partner with a 3PL, you can save your inventory in components of their fulfillment centers together with other eCommerce businesses. In this way, the warehousing costs are shared across the various businesses. Bulk carrier discounts With thousands of shoppers, 3PLs can arrange bulk discounts from shipping carriers like UPS, USPS, FedEx, and DHL to supply higher rates for expedited shipping, 2-day shipping, international shipping, and more. Of course, the more packages you ship, the higher rates you can get to further decrease logistics costs. Technology and forecasting Most 3PLs have best-in-class technology and tools. These tools include inventory forecasting, so you know when to replenish the products that are in demand. Expect to continually search for ways in which to cut back logistics costs while still operating your business in a good manner. One of the best ways to keep eCommerce logistics costs in check is to manage orders and deliveries effectively. Avoid outrageous delivery prices by keeping an in-depth eye on supply and demand (a method known as forecasting) to confirm that your order arrives before it's urgently required and to avoid overwhelming the warehouse with too many deliveries right away. Conclusion: Why Do You Need to Keep Track of Logistics Costs in 2024? Businesses should continually search for ways in which to cut back logistics costs while still performing operations in the best possible way. One of the best ways to keep logistics costs in check is to manage orders and deliveries effectively. Avoiding outrageous delivery prices can also be done by keeping an in-depth eye on supply and demand (a method known as forecasting) to confirm your order arrives before it's urgently required and to avoid overwhelming the warehouse with too many deliveries right away. One way to do this is to partner with a technologically advanced company like WareIQ, which supplies businesses with tools to forecast and plan their distribution and fulfillment strategy in the most efficient ways possible. WareIQ is a Y-combinator backed startup, that is the leading provider of full-stack eCommerce fulfillment services for 300+ 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 customised offerings for merchants experiencing different order volumes as well as having different delivery speed expectations. WareIQ is probably one of the very few fulfillment tech companies in the world that have same-day delivery service for their customers under their product “WareIQ RUSH”. With world-class WMS functionalities, WareIQ handles the entire range of intricate operations in the eCommerce fulfillment process, ranging from Inbound Operations such as scanning and quality check, through 100% accurate Pick and Pack, to Inventory Management across all channels. WareIQ’s next day delivery and same-day delivery services are helping eCommerce businesses set new standards with respect to setting customer expectations and fulfilling them with high efficacy. At the same time, WareIQ customers realise significant cost savings and wider reach due to better negotiations with shipping partners, strategically placed warehouses, 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] Logistics Cost FAQs (Frequently Asked Questions) Does 3PL help in managing eCommerce logistics costs?3PL companies do charge fulfillment fees but 3PLs provide the most cost-effective way to leverage resources and manage logistics costs and scale business as these 3PL service providers specialize in inventory storage, packaging, and shipping. What are the different types of logistics costs?• Storage and inventory • Packaging • Transportation and freight • Technology • Financial designing • Structuring processes • Task automation • Fuel Surcharges • Handling Fees • Restocking Fees What are the different types of transportation costs?• Linehaul• Pickup and delivery• Terminal handling• Billing and collecting What is the difference between logistics and transportation?Transportation is basically the movement of goods from one place to another whereas logistics is a broader term that includes freight management which includes storage, handling, sorting, packing and transportation of goods.

April 23, 2022

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