What is a Warehouse Management System (WMS)? A Detailed Guide for eCommerce Sellers: Features, Types, and Benefits of WMS in 2023
The world is now moving towards digital platforms at a supersonic speed. You can find almost everything on the Internet today. This is remarkably changing customer behaviour. Right from ordering foods to getting their favourite camera, individuals prefer online platforms like never before. Moreover, the payment process, shipment tracking, and even returning the product, everything is possible from anywhere, anytime. The overall paradigm shift in the supply chain has put the wholesalers, third-party logistics - 3PL companies, and logistics companies under tremendous challenge. As per the Statista report, in 2022, the number of online buyers crossed the 2.14 billion mark globally. In terms of value, in 2022, the retail eCommerce sales were 5.1 trillion U.S. dollars worldwide, and it is forecasted to touch 7.4 trillion dollars by 2025. There is no doubt that the situation will become more challenging in the future. Therefore, there is a need for an efficient, user-friendly, and fast Warehouse Management System. Managing a giant warehouse 24 x 7 is not an easy task. Additionally, it is like a nightmare without an efficient tool when you need to order many Stock Keeping Units (SKUs). WMS is a great tool to manage the entire activities of a warehouse. The WMS handles everything effortlessly from inventory management, stock replenishment, receiving, warehouse put-away, pick, packing, eCommerce shipping, and tracking of the logistics system. It helps you improve productivity and profit through advanced software and technologies. Barcode systems, RFID labeling, hi-tech automated robots for pallet movement, ERP systems, transport management systems, logistics software, augmented and virtual reality wearables, etc. are some of the hi-tech features of WMS. This article will walk you through the basic understanding of the warehouse management system, its features, how and where it fits with the supply chain, and different WMS systems. We will also discuss the benefits of Warehouse Management Software and the future of WMS. What is a Warehouse Management System (WMS)? A warehouse management system is a software solution that provides transparency and visibility to the entire warehouse operations. WMS is efficient enough to manage inventories, order fulfillment, and inbound-outbound logistics deliveries of any single warehouse or multi-location warehouse cluster. It is highly efficient in manufacturing setup and retail industries as it can track every movement of materials. An effective WMS can optimise your warehouse resources and allow you to maximize space utilisation. Moreover, with a suitable investment in the equipment, warehouse management software benefits the organisation by remarkably saving the material movement time. This, in turn, increases the efficiency of the warehouse. WMS reduces human efforts tremendously by tracking the entire material movement on a real-time basis. These software solutions are so efficient that they can trace the exact time of order placement, the pick-pack time, the person involved, and where the product has been transported by which vehicle. [contactus_gynoveda] What are the Features of a Warehouse Management System? An efficient WMS offers many features to its clients, and the final goal is to simplify the business process while improving overall efficiency. While planning for a software solution for your warehouse, you must consider what feature tools are required. Here are some essential features of a sound WM system. · Warehouse designing: The efficacy of a warehouse operation is maximum when it is appropriately designed, depending on the material flow, loading-unloading dock locations, number of materials to be handled, and many more parameters. WMS provides excellent design solutions to optimise the operations. It takes care of every minute detail of inventory management like storage location, pallet allocation, minimum travel path calculation, and many more. · Tracking of inventory: Modern systems can track every movement and reflect the fulfillment status on a real-time basis. Advanced technologies like AR wearable gadgets, RFID systems, and barcoding ensure that every material has its area and vice versa. Moreover, we can get a clear picture of the invoicing data, packing size, space availability, etc. · Receiving and storing: This includes receiving materials from suppliers, checking with the purchase order, and leaving materials at the correct location without any error. Additionally, the inventory is updated on a real-time basis. · Pick, pack, ship: The intelligent warehouse system analyses several parameters and provides solutions for the best way of picking the material from the shelf, packing procedure, and shipping information. This smart software can generate packing lists, invoices, and bills of lading with a single click and can send advance shipping notifications to the clients. · Workforce management: Hi-tech WMS helps the warehouse manager to run the show efficiently. It provides visibility on the resources and indicates human resources availability. Additionally, you can monitor their performances and set KPIs (Key Performance Indicators) for performance evaluation. · Reporting: Reporting is a critical part of a warehouse. It comprises abundant information from receipt, invoices, inbound and outbound deliveries, inventory status, and more. An innovative WMS can generate customized reports in real-time. · Yard and dock management: It assists the dock supervisor in getting a fair idea about available docks and reduces waiting time for the trucks. Moreover, it helps in managing cross-docking and other inbound-outbound deliveries. Where Does a Warehouse Management System Fit into the Supply Chain? A warehouse is the central part of any supply chain. It plays a significant role in running a smooth supply chain by receiving goods, storing them without any damage, timely issuing raw materials and components to the production shop floor, and delivering the correct finished products to the right person at the right time and quantity. For example, suppose the warehouse cannot provide the suitable material or component to the production line on time. In that case, it will hamper the overall production and SCM process, cause a delay in deliveries, and ultimately hinder customer satisfaction. This is a simple example of how warehouse management can impact the supply chain. The modern supply chain operates on visibility and transparency. The warehouse is responsible for providing the correct information on the inventory front, order fulfillment, invoicing, etc. The more efficiently the warehouse works, the more the organisation can fulfill the customer’s requirements. The warehouse profoundly impacts supply chain management's revenue and business strategies. It plays a significant role in improving SCM performance by Efficient storageStrategic locationSecurityInventory AccountabilityFulfillment of orders and warehouse distribution servicesEconomic benefitsValue-adding operations What are the Types of Warehouse Management Systems in 2023? Basically, we can categorise it into three major types: Standalone WMS This is the most traditional form that most organizations use. It is deployed on the company’s premises and uses its hardware system. According to their business complexities, every organisation can do a high level of customisation on this standalone WMS. Though it is a costly option, you can have tighter control over the system. After the system development and implementation, it is the asset of the company, and they need to bear the cost of maintenance, expansion, and updates. Another drawback of this traditional system is the complexity of integration with other latest next-gen technologies. Cloud-based WMS With the introduction of cloud technology, the latest WMS has adopted this platform to provide seamless solutions. You can enjoy the benefit of horizontal implementation at a faster pace. This, in turn, reduces the implementation cost. This system has the next level of advantages. There is no need to use your own hardware and IT resources for implementation and maintenance. The auto-update facility keeps you away from the headache of regular hassle. This system can be scaled up with your business expansion without investing much. Moreover, as it operates through the Cloud, your data is safe from any internal disaster. SCM and ERP-based WMS There are many software solutions that provide an entire system to the organisations for every function. For example, Enterprise Resource Planning software like SAP and Oracle offers a package solution that includes all the functions as modules. They have a finance module, production planning, material management module, inventory management module, and warehouse management module. The beauty of these solutions is, that they are integrated, and all data is linked to each module. Therefore, such systems are capable of providing a holistic picture to the management and offer end-to-end transparency of the supply chain. What are the Benefits of Warehouse Management Systems? There are several benefits of having a robust WMS in place. This helps the organisations improve their efficiency in every facet in the long run. We have listed some of its crucial advantages: Improved operational efficiency: The WMS is connected to many new advanced technologies, which helps streamline processes and reduce errors significantly. Warehouse management software checks every step to avoid mistakes from the inbound receipt to the outbound deliveries. Moreover, with the help of automated tools, the warehouse team can handle larger volumes with less effort and less paperwork. By eliminating the non-value-adding activities (NVAs) and duplication of work, WMS enhances the overall efficiency of warehouse operations. Better inventory management: Inventory blocks a tremendous amount of money in terms of materials but is essential to manage unplanned situations. An efficient warehouse management system indicates the correct inventory level and defines the min-max levels of items. Based on their usage and the number of picks from the warehouse, WMS indicates the frequent, medium, and rarely used items, which helps in correct material ordering. Moreover, the advanced warehouse management software can identify excess and obsolete inventories and trigger you to take necessary actions. Holistically, to manage a healthy inventory, you need a robust WMS. Improve labour management: You need not worry about labour management if you have intelligent WM software in place. To enhance the productivity of the resources, it can define workloads for the staff and optimise the in-warehouse movement path. It can even indicate the labour requirement and create a schedule for them. Safety is today’s topmost priority, and advanced WMS reveals the possible hazards within the space, ensuring the safety of man and machine. Reduce cost: Modern store management software is smart enough to calculate and advise optimum space utilisation ideas for e-commerce warehousing. It also determines the minimum travel path of the materials to reach the assembly line or loading point. Suppose you adopt the high-tech WMS during the initial warehouse design stage; its advanced simulation will help you to create optimised floor plans. Moreover, it highlights the perfect pallet locations, shelves, and equipment areas to run the warehouse with the highest efficiency, which, in turn, saves you a lot of money. Waste reduction: Modern software is backed up by solid data. WMS automatically identifies and applies the First-in-First-out (FIFO), Last-in-First-out (LIFO), or Highest-in-First-out (HIFO) policy on the goods based on the strategy. In the case of perishable or shelf-life items, this smart system informs you well in advance about the items approaching their end. It triggers you to pick those items first or prompts you for a sales push to avoid wastage. Boost customer satisfaction: Today’s businesses are driven by customers, and boosting their experience and engagement is crucial for success. Top-notch warehouse management software can help to boost your customer delight by improving order fulfillment, quicker deliveries, and fewer inaccuracies. If your WMS is integrated with any CRM software that provides a status update to the customer, it will improve your customer loyalty and brand reputation. Enhance supplier relationship: Suppliers are the pillars of any business. You need a close, transparent, and real-time information-sharing system with your suppliers to have a robust supply chain process. Your WMS can be integrated into the supplier’s system, bridging the gap and establishing a two-way information flow. It makes the process more flexible, and your suppliers enjoy a healthy business relationship. The WMS also benefits as the technology takes the entire industry towards the cloud infrastructure. Advanced cloud-based warehouse management software solutions provide some fantastic benefits as listed below. Fast implementation: Considering the traditional systems, cloud-based WMS is faster to implement. Where the conventional system takes months to implement, the advanced cloud-based platforms can be implemented within weeks, depending on the complexities. Quicker implementation provides minimum interruption to the running business and improves ROI and profit for fast-paced organisations. Fewer upgrade hassles: The beauty of cloud management includes the updates and modifications that occur on the cloud system itself. The vendor takes responsibility for making necessary modifications and changes in the cloud server. There is no need to update the system at regular intervals. It saves time and hassle for the customers. Moreover, it avoids costly customisations like the in-house software. It ensures that you always work on the latest version. Lower upfront cost: Cloud-based WMS is significant in terms of initial and running cost savings. This architecture neither requires any hardware or software installation nor any IT administrator to manage it. Additionally, the auto-updates, installation of the latest version, and modifications help you save tremendous time and money. There is no need to allocate additional resources to manage. Scalability and flexibility: As your business grows, you need to expand the IT systems and WMS. Cloud-based structures are remarkable in terms of scalability. The WMS can be scaled up quickly and can handle more complex supply chain situations. Furthermore, the flexibility of such a system provides a huge advantage to organisations in managing difficult situations. Seamless integration: You may be using different software solutions like ERP systems, software for your accounting process, and likewise for your business. The advanced WMS cloud versions are easy to integrate with your other business software, and you can get an integrated IT solution for your needs. How do I choose the right WMS for my business? There are several factors to consider when choosing the right warehouse management software for your business: Determine your business needs: Identify the specific problems you are trying to solve and the features you need in a WMS system.Research potential solutions: Look for options that meet your business needs and compare their features and pricing.Evaluate the vendor: Consider the vendor's reputation, customer support, and ability to customize the software to your specific needs.Test the software: Ask for a demo or trial version of the software to see if it meets your expectations and is easy to use.Consider integration: If you have other systems, such as an enterprise resource planning (ERP) system or transportation management system (TMS), make sure the warehouse management system can integrate with them.Get customer feedback: Ask for references from other businesses that are using the software and get feedback on their experience.Evaluate the total cost of ownership: Consider not just the upfront cost of the software, but also the ongoing costs of implementation, training, maintenance, and support. What is the Future of Warehouse Management Systems in 2023? With the increasing demand in eCommerce and other industries, there is no doubt that businesses need to deliver the products in the shortest time period. The best possible way to handle such a situation is to manage your warehouse efficiently. WMS is going to solve the major issues of organisations by providing advanced solutions, and the future of this technology looks bright. According to a study, in 2022, the worldwide valuation of the WMS market was USD 4.7 billion, and it is forecasted to touch the mark of USD 8.9 billion by 2030. This shows a significant CAGR growth of 11.1% from 2022 to 2030. But how will the warehousing system reshape itself in these next couple of years? Let us see in detail. Introduction of Robots To manage the mammoth material's inbound and outbound flow, it is evident that warehouse management systems need automation. The introduction of robots in managing warehouse operations is a must. This revolution has already started, and many companies are offering best-in-class robotic solutions in this area. These robots can move materials to designated places, load and unload materials from vehicles, accurately pick-pack and ship, etc. Cobots, which are collaborative robots, work with humans to enhance productivity. Articulated robot arms and automated guided vehicles reduce human errors significantly and provide a safer environment for the warehouse staff. Drones for WMS Organisations are now keener to implement drones in their warehouse management. Drones are primarily used in different events, corporate activities, and defense purposes. However, their high efficiency, speed, and uninterrupted flow can significantly improve the movement of the materials in the warehouses. Many organisations are experimenting with deliveries with drones. It will not be a surprise to see drones lifting materials from storage racks and issuing them to the shop floor or unloading raw materials from vehicles. Using Smart Gadgets in WMS Renaissance in technology from industry 1.0 to industry 4.0 showed us drastic changes in every facet. We saw the shift of store management from pen and paper to computerised systems and laptops. It is the era of intelligent and handy devices. In the Internet-everywhere environment, WMS can be accessed from anywhere, and you only need a smart device and Internet connectivity. The advanced WMS can operate on any device and operating system. You can scan barcodes and RFID, access the warehouse management system, track inventory, invoice shipping notifications, etc. This makes the system handy, increases productivity, and optimises the man force. Augmented Reality Wearables The popularity of using AR gadgets in warehouse management increases daily. These are innovative gadgets packed with ultra-modern features like scanning, WMS access, auto-counting, etc. These devices can help you identify the exact item code of the component and backtrack the order number, WBS element, and even the customer order number. They remove the dependency on human memory, and thus, will reach the maximum accuracy level in the future. Smart Automated Vehicles and Forklifts Auto-guided vehicles are the best gift of technology to the warehouse management system. Due to its high buying and maintenance costs, you cannot find these in most organisations. However, the future smart warehouses will be managed by these machines. Software programming enables these machines to operate automatically without any assistance. This will help organisations to reduce operational costs and increase efficiency drastically. On-Demand Warehousing Solution This is another prospect that will be a popular option in the future. It will offer flexibility to the organisations to manage pick situations demands. The additional capacity of the rented warehouse on an as-on-when-required basis will help small businesses spend less on costs. Big Data and Machine Learning Big data and ML are not new terms but the latest introduction to the warehouse management system. For large organisations, it is vital to analyse all the data points related to warehousing and populate them with decision-making templates. Warehouses store a massive amount of data; therefore, in the future, using Machine Learning and Big data analytics will be essential. You can also read about the top warehousing companies here. Conclusion: Does your eCommerce business need a Warehouse Management System (WMS)? Currently, the business processes are getting highly complex. There are several factors like same-day or next-day delivery, changes in customer demand and expectations, challenges in the lead time, higher competition in the market, etc. To mitigate the ever-changing requirements and stay ahead of your competitors, you need to operate your warehouse efficiently. A warehouse management system can do it for you. If you are planning to set up your warehouse system or thinking of expanding your eCommerce business, it is the correct time to introduce an intelligent and next-gen WMS. It is an investment to increase productivity and take your warehouse operations to the next level. Knowing about WMS and its necessity in today's business environment. You must have thoughts, to access such warehouses to boost your business. You have an option of outsourcing such warehouse plus fulfillment centers run by experts without owning and spending millions on the system. WareIQ provides fulfillment services to amplify your business which not only gives you the benefits of the Warehouse Management System but a lot more. 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 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 & marketplaces enhancing multi-channel sellingHorizontal marketplaces: Flipkart, Amazon, etc.Vertical marketplaces: Nykaa, Myntra, etc.D2C platforms: Shopify, Magento, WooCommerce, etc.Social commerce platforms: BikayiAccess to a superior centralised tech platform for eCommerce operationsML-based prediction engine for efficient warehouse network design & smart inventory placementCentralised platform for core 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 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 report 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] Suggested Read: Warehouse Management Vs Inventory Management: Which Software is Better? Warehouse Management System (WMS) FAQs What software is used in a warehouse?Warehouse management system is the software used in warehouses. This software is made to help users improve the efficiency of tracking inventory and supplies as they move through a warehouse. What is a Warehouse Management System (WMS)?A warehouse management system (WMS) is a software solution that provides inventory visibility and handles supply chain fulfillment operations from the distribution warehouse to the retail store. Is WMS an ERP system?The main distinction between WMS (Warehouse Management System) and ERP (Enterprise Resource Planning) is that a WMS is a stand-alone system that requires other software to function, whereas ERP is an all-in-one solution. What is SAP's role in warehousing?The SAP Warehouse Management System (WMS) helps you process all goods movements and manage stocks in your warehouse complex with ease. Compare SAP and WMS.SAP Inventory Management assists in the management of stock quantities and values across multiple storage sites. The WMS, on the other hand, allows you to map your entire warehouse complex down to the storage bin level and determine where a specific material is now located. What are the different warehouse service offerings?There are 7 warehouse offerings namely:• Pick and Pack services• Sub-assembly services• Site location services• Distribution Center Management services• Vendor Managed inventory• Cross docking services• Fulfillment services Who are the top vendors in the WMS market?The big 4 are;• IBM• Microsoft• Oracle• SAP How much does a warehouse management system cost?The cost of a warehouse management system (WMS) can vary widely depending on the size and complexity of the system, the number of users, and the level of customization and integration required. Some basic WMS systems can cost a few thousand rupees, while more advanced systems can cost hundreds of thousands of dollars or more. Can a warehouse management system (WMS) integrate with my existing systems?Many warehouse management systems can integrate with other systems, such as an enterprise resource planning (ERP) system or transportation management system (TMS). The integration allows different systems to exchange data and communicate with each other, enabling a more streamlined and efficient workflow. When evaluating a WMS, it's important to consider whether it can integrate with your existing systems or any systems you plan to implement in the future. Some WMS vendors offer pre-built integrations with popular systems, while others may be able to custom-build an integration for you. It's also worth considering whether the WMS has an open API (application programming interface) that allows you to easily connect it to other systems. This can make it easier to integrate the WMS with other systems in the future, even if the vendor doesn't offer a pre-built integration. You can contact us here for support. Does WareIQ have a WMS?Yes, WareIQ provides a full stack fulfillment platform with unified OMS (Order Management System) and WMS(warehouse management system) that enables real time inventory & order sync across both softwares for better analytics.
April 30, 2022
How to Reduce Logistics Costs? Top 10 Ways to Reduce Logistics Costs in eCommerce in 2023
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 2023 Source Here are 10 Proven Tips by experts for year 2023 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 Last Mile Delivery Management Software for eCommerce in 2023
In today’s internet-driven world, most of us prefer to use our smart devices to manage our daily requirements. Starting from buying an expensive car to ordering essential groceries, there is a website or an application for every need. The most significant aspect of such websites is eCommerce shopping, which has become an indispensable part of the retail framework. In this exponential growth trajectory of the eCommerce industry, last mile delivery plays an important role. Last-mile delivery is the journey of the final product or service to the customer from the final distribution hub. This is the most significant part of the overall eCommerce logistics process as the customer’s ultimate experience depends on it. In addition to this, the last mile involves substantial costs in terms of fuel, transportation, and other important aspects. The eCommerce fulfillment ecosystem is heavily dependent on on-time delivery. This is where the importance of last mile delivery management software comes in. Several last-mile delivery management software packages are available in the market that help in providing last mile software solutions to delivery issues and are also helpful in tracking and managing the final logistics. Additionally, it boosts profitability by reducing logistics costs and other expenses. This article will provide a brief about the last mile delivery process, its importance, and how the best last mile delivery management software can benefit your business. Stay connected. What is Last-Mile Delivery? The final lap, or the last mile delivery, is a significant process in the entire supply chain network. The journey of a product starts from the production house to the warehouse shelf and then gradually moves to the transport vehicle before finally reaching the end customer. There are several points where the product is housed, known as hubs. It is the final journey of the product to reach its ultimate buyer. Last mile delivery is vital, not only from the shipment point of view but also from the customer point of view. It dramatically enhances customer delight and, in turn, helps in customer retention. It is the costliest and most time-consuming part of the overall logistics chain and could result in higher logistics costs if not managed efficiently. [contactus_gynoveda] What is Last Mile Delivery Management Software and why is it Important? Last mile delivery is the final ride of the product to reach the buyer's doorstep. But as far as delivery is concerned, it may not be as simple as it sounds. The reason behind its complications is that the delivery driver needs to handle a lot of shipments of different customers in a single go. And there are numerous stops and routes that the vehicle needs to cover. To manage the complicated process, software solutions provide services known as last mile delivery management software to last-mile delivery companies. These are advanced and feature-loaded products that offer considerable benefits to the overall supply chain, especially to the end customers. Last mile logistics software solutions can manage large volumes of customers and their orders. With live updates of the shipment status, both the logistics team and the customer can track orders and take necessary actions to mitigate any issue. It is imperative to deliver your product or services in the shortest possible time in this ever-changing business scenario. Due to the evolution of technology, customer expectations have changed significantly. And if you want to stay ahead of your competitors, you need to be intelligent, agile, flexible, and fast. No matter how great your products are, you will definitely lose the market if you fail to adhere to your delivery commitment. Therefore, in any business, supply chain and logistics are gaining attention and can help businesses regulate and de-clutter their eCommerce shipping processes. Read our blog on shipping aggregators to understand how they streamline your shipping and distribution process. Last mile delivery management software can give you the live status of the delivery at ground level. Such software provides information about details like the vehicle location, delivery status, information about ETA, and more. You can do a detailed analysis to improve the process, manage any complaints, enhance customer delight by reducing the delivery time, and much more. In this market scenario, last mile logistics software is a necessity, particularly for eCommerce businesses. What are the Key Benefits of Using Last mile Delivery Management Software? Customer experience is the key brand differentiator over price and quality. If your product can enhance customers’ delight, you will receive orders and if your last mile logistics software can ensure your customer receives your product on time, you will receive what most eCommerce shipping companies strive for - positive customer feedback. But how do the supply chain and logistics help brands to improve customer experience? It's through the last mile delivery, your final touch can make or break the deal. You can see that most of the eCommerce players are now advertising the shortest delivery time as their unique selling point (USP). Same-day delivery is now standard. With this, organizations can now meet the ever-changing customer expectations. Let's check how last mile software solutions can benefit your business: Improves Shipment Visibility As per Gartner, visibility is one of the most significant challenges in the last mile delivery process. Businesses need to get clear visibility of the final lap as this completes the cycle. Last mile delivery management software provides real-time information regarding the final delivery process such as providing the pre-defined optimum route, identifying any delays in deliveries, idling time of the delivery van, and other things. Last mile software solutions are excellent for predicting the final delivery time and committing accordingly. You can better control your fleet process and avoid theft, pilferage, and spoilage. Helps in Route Optimization There are opportunities to improve your business process in every aspect. But you need to measure the elements first. An enterprise-grade last mile delivery management software helps you understand the best possible route to reach the maximum touchpoints and avoid unwanted delays. Drivers get real-time updates regarding the best-optimized path to ensure the fastest delivery. Such software is beneficial to cover the maximum number of deliveries within a short time period and increase savings in terms of fuel consumption. Enhances Customer Delight last mile delivery management software helps to integrate your delivery system with end customers through informative messaging and web updates. These platforms enable customers to have end-to-end visibility, and they can track the shipment on a real-time basis. From order placement to final delivery, buyers get information at their fingertips. Last mile software solutions even share the estimated arrival time with the customer after they place the order. These updates - delivery notifications and updates regarding any delay - boost customer engagement and enhance their delight. A great customer experience is key to a successful business. Introduces Flexibility in Delivery The last mile delivery management software is developed, keeping the practicality of the customers in mind. In today's busy schedule, it is expected that you may not be available at the delivery destination. The advanced software allows you to update your delivery location and time, making the overall delivery process more agile. Boosts Productivity and Scalability Last mile logistics software is highly advanced and responsive. With the help of the latest technologies and tracking systems, these platforms provide live updates about traffic routes to help the fleet avoid unplanned diversions and unnecessary idling. Taking the optimized route saves time and helps the driver complete the maximum number of deliveries, which increases the fleet's productivity. Most last mile delivery management software solutions are excellent in terms of scalability. They are developed keeping future expansion in mind as eCommerce businesses have tremendous growth potential. Even in case of in-house workforce scarcity, these platforms can help you connect with third-party (3PL) delivery providers to manage situations without any hassle. Increases Profitability The overall goal is to increase the profit of your business. With all the features and benefits like quick delivery, route optimization and fuel-saving, managing delivery resources efficiently and the ability to enhance customer satisfaction, these platforms increase your profit margin significantly. Last mile software solutions provide a lot of data, which you can analyze to improve your logistics system. Boosts Transparency Supply chain and reverse logistics are highly dynamic processes that cannot operate efficiently without transparency. With the help of last mile delivery management software, supply chain managers can track every data point, starting from the date and time of order placement. They can get information as to who placed the order, what is the exact SKU, and which one is the nearest hub to deliver, among others. Such information is provided by last mile software solutions. Additionally, they can share the estimated shipping date and delivery time with the customers to make the delivery process even more transparent. 8 Factors to Consider While Choosing a Last Mile Delivery Management Software in 2023 You must be thinking about how to select the best last time software solution provider that suits your requirements. Selecting the best last-mile logistics software is a daunting task. You need to consider a number of parameters and points before you opt for a solution provider. You can read the following list of important things you should consider before finalizing a software company: Pricing Model Budgeting is an essential aspect of any project. Choosing the right last-mile delivery management software for your eCommerce business needs a deep understanding of the available budget. It would be best to think about the quality, features, user-friendliness, flexibility, scalability, and aesthetics before thinking of the cost. This will be the tracking mechanism of your business that can make or break a deal. Ideally, it would help if you considered the long-term benefit and not the short-term one. Coverage Area The network coverage area that the last mile delivery software service provider offers is a vital aspect. As this is a network-based system, the software should cover the maximum area where your business operates. Along with this, checking the responsiveness of the network is a must. If the software faces a significant amount of downtime, it may cost a lot for your business. Dependability Before joining hands with a third-party last mile delivery management software provider, you should check the dependability factor, as in how much reliable it is. For a long-term venture, a trustworthy service provider is required to significantly benefit your business. Check their clientele and portfolio, and visit their website and social media to get a clear picture of their service. Going through customer reviews and ratings is a good practice. Payment Methods Nowadays, several payment options are available. And people use them at their convenience. Therefore, it is indispensable to check if the last mile software solution provider offers all possible options like e-wallets, bank transfers, UPI payments, cash-on-delivery, and credit points. Suggested Read: Which is the Best Cash on Delivery Courier Service in India? Transparency and Visibility To provide a fantastic eCommerce shopping experience, you should prefer a last mile delivery management software that offers you thorough real-time visibility and transparency. A live update and a superior interface and notification system greatly benefit the business for thorough tracking of the entire process. Customers want to get updates on the progress on different platforms like SMS, email, and WhatsApp, and your last mile software solution should be able to provide that. Customer Care Service After-sales service is a crucial part of any business. But unfortunately, many companies do not bother to resolve after-sales issues. Most of the time, businesses focus on generating new prospects as that pays off immediately. But poor customer support drags down all your efforts. Excellent after-sales support is the key to enhancing customer experience and retaining existing customers. And a happy customer will be your advocate at no cost. A mere 5% increase in customer retention can help you raise your profit by 25%. Proof of Delivery Feature Your last mile delivery management software should provide the feature of proof of delivery (POD). The main aim of a supply chain and logistics team is to deliver the right thing at the right time to the right place. POD is a document that ensures that all the points are completed flawlessly, which helps to avoid any future ambiguity and gives you peace of mind. It can include a signature, a picture of the delivery, or a note from the receiver. Ease of Integration A last mile logistics software cannot perform well independently. It needs to work efficiently with other applications like Google Maps, Shopify Fulfillment, Salesforce, Oracle, Microsoft Dynamics, SAP, Amazon Web Services, etc. An easy integration process helps you avoid restructuring the entire tech stack. Search for a platform that plays nicely with advanced tech and absorbs updates efficiently. 10 Best Last Mile Delivery Management Software [Updated List 2023] Tookan Delivery Management Software Source Tookan is one of the most popular last mile delivery management software options available. It helps organizations to modernize their delivery systems and reduce overhead costs. It is the most accessible solution for eCommerce businesses, and companies operating with Tookan are benefitted in many ways. Key features Tookan dashboard helps to get all the details in one place and can be customized as per your requirement.Tookan logistics is highly efficient in managing same-day deliveries.Tookan mobile app offers many facilities to drivers and field operators. From taking proof of delivery, and reminders, to notifications, to-do lists, easy navigation, and bar code generation, everything is possible through Tookan. Upper Route Planner Source This is one of the most advanced logistics solution providers, especially in the last mile logistics field. Upper Route Planner can handle one-day delivery efficiently. It has numerous features like route planning and optimization, a robust reporting system, real-time fleet visibility, etc. Key features It has a unique one-click dispatch feature. It helps the manager dispatch, multiple drivers, over multiple routers with a single click, making the process very efficient. You can download excel or CSV reports from the system for further analysis. With its planned and advanced scheduling, you can improve the time management and productivity of the logistics team. Onro Last Mile Delivery Software Source Another leading last mile delivery management software player is Onro. It offers services to businesses of all sizes, and its unique features consistently help it to stay ahead of its competitors. Key features Onro is highly customizable. You can play with its design and aesthetics to match your expectations.It offers a white-level branded shipping page to its customers, i.e., your customers can see your brand logo whenever they open the application to track the shipment.Another cool feature of this software is that it offers a number of language options to make it more user-friendly.The real-time updates are highly reliable, and you can chat with the delivery agent to provide any specific instructions. Onfleet Last Mile Delivery Software Source Onfleet is one of the leading logistics companies that offer a last mile software solution. Based out of San Francisco, this company operates in more than 90+ countries globally and provides efficient solutions to untie the knots of the final lap delivery process. Key features Hitech Artificial Intelligence powers the application of this company. Onfleet can provide real-time information about weather conditions, traffic congestion, and optimized delivery routes.The efficient auto-dispatch feature allows the closest delivery vehicle to pick up the material and arrange for the delivery.The live tracking of this application works amazingly fast. It relays the actual status of the shipment to the delivery team as well as to the customer.It offers a POD whenever the delivery is done. Shipsy Last Mile Delivery Solution It is one of the best third-party logistics platforms in the Middle East and the Americas. It is headquartered in Dubai and India. Starting in 2015 with only ten people and two customers, this platform now handles 150+ clients globally. Shipsy provides the last mile delivery management software to e-retailers and ensures your product reaches its destination within the ETA. Key features Its application is integrated with a real-time route optimization engine which offers a multi-stop dispatch.The entire process of delivery, right from the pick up from the hub to the final destination, is transparent and visible. With its fantastic features, this software can select the delivery vehicle and allocate delivery packages according to the size of the vehicle to utilize the maximum space.You can get the delivery reports and use those to analyze and improve your business. GSMtasks Last-Mile Delivery Solution Source GSMtasks is a brilliant last mile delivery management software that helps you to manage the entire fleet of vehicles, drivers, and technicians. It helps in optimizing routes, checking working conditions, analyzing customer reviews, etc. Key features Delivery drivers can check the to-do list from the mobile app itself.It shares the ETA and duration of each delivery with the fleet managers and the drivers.It offers tremendous automation to back-end employees, saving time and resources.Customers can change the place and time of delivery, and all changes will reflect on the delivery software. LogiNext Software Source The company provides unmatched customer experience in terms of last mile delivery management software. Loginext is currently providing services in the US, Indonesia, Singapore, and the UAE. Key features The dynamic rerouting feature helps the driver take the best suitable route to avoid traffic congestion, resulting in faster delivery.Along with all the digital payment options, this company provides a cash-on-delivery option. The software accommodates the facility if the customer has opted for a COD option and finally wants to pay electronically. HyperTrack Last Mile Software Solutions Source HyperTrack uses the most advanced technology stacks to build unique last mile software solutions. Through its no-code and low-code infrastructure, HyperTrack helps develop flexible, scalable, and feature-loaded applications for the future. Key features Its advanced no-code and low-code development architecture help developers create amazing applications in no time.Its accuracy level is top-notch.This platform uses AI-based technology, which offers a competitive edge over its rivals. G2 Deals Ecommerce Last-Mile Delivery Management Software Source One of the largest and most trusted software marketplaces is G2 Deals. This platform helps millions of people decide on software purchases through its great reviews and comments. G2 Deals help companies select the best delivery management software as per delivery requirements. Key features You can get authentic reviews and ratings on the last mile delivery management software to make a wise decision.It provides research reports, category taxonomy, and service provider profiles to give you the best solution. Track-POD Last-Mile Delivery Software for Ecommerce Source Track-POD is another provider that works through an application. You can easily download the app on android and iOS devices. The most exciting part is that this application offers a free seven-day trial, giving you full access to its features. Key features It is user-friendly and simple for newbies to navigate its features and pages.The geotagging system provides accurate real-time updates about the traffic condition and optimized route options to the drivers.No paperwork or physical signatures are required. If you want a POD, the customer needs to sign on the delivery person’s mobile screen.The accuracy level is very high. Conclusion: Does Your Business Need a Last-Mile Delivery Management Software? It is indispensable for eCommerce players to have the best final delivery process. Last mile delivery is now the only differentiator as customers are keen to get their products quickly and in excellent condition. The last mile software solutions provide significant benefits to businesses by making them simple, visible, and profitable. So if you are into an eCommerce business or planning to enhance your customer delight through exceptional last mile delivery service, your business needs a last mile delivery management software. WareIQ can help provide software solutions, not only to manage your last mile delivery, but a whole host of other services to enhance your entire fulfillment experience. The distance of the final shipping center from your customers’ location is one of the major factors that can determine how fast the last mile delivery can be performed. The closer the fulfillment center is to the final delivery location, the faster it can be delivered. It also implies that you will be travelling a lesser distance to make that delivery, saving some transportation costs. The math is direct, and this directly affects the volume and costs involved in handling your return orders too. How WareIQ is able to solve the challenges in last-mile deliveries? The distance of the final shipping center from your customers’ location is one of the major factors that can determine how fast the last mile delivery can be performed. The closer the fulfillment center is to the final delivery location, the faster it can be delivered. It also implies that you will be traveling a lesser distance to make that delivery, saving some transportation costs. The math is direct, and this directly affects the volume and costs involved in handling your return orders too. WareIQ is able to bring your inventory closer to your customer with its PAN-India fulfillment network. For example, Organic Riot, a consumer brand was able to leverage this network to perform a 2-day delivery to over 85% of their orders. This was only 22% earlier when they shipped through their central warehouse. With WareIQ handling the logistics, the return rate was reduced to just 3 percent. In another instance, a prominent D2C brand faced a high RTO rate (25-30%) due to various last-mile challenges like non-verified COD orders, fake delivery attempts by courier service partners, and slower shipping speed. WareIQ enabled COD and NDR verification through automated SMS and IVR calls to prevent these issues. It was also possible to bring their inventory closer to demand centers using the fulfillment network in metros. This resulted in a reduction in the RTO rate to just 6%. For last-mile delivery, WareIQ acts as a shipping aggregator and gives an option of 20+ last-mile delivery partners to the eCommerce clients to choose as per their choice & convenience. [signup] Last Mile Delivery Management Software FAQs What is last-mile delivery app/software?The final stage of a company's delivery process i.e last mile delivery is when goods are transferred from a distribution center to a customer's doorstep. The term "last mile delivery software" refers to a group of software tools that aid firms in their last-mile delivery operations. Why do businesses need last mile delivery management software? Last mile delivery software brings lots of benefits with it, such as dispatching orders, distributing duties, tracking trucks and consignments, planning routes, and more. This allows businesses to gain complete logistics visibility, receive accurate ETAs, and make on-time deliveries with the least amount of personnel and money. What is the use of the Last-mile delivery system?Last mile software enables companies to meet ever-increasing client expectations while also improving operational efficiency. It controls expenses and performs a variety of tasks such as delivery scheduling, task allocation, routing, real-time tracking, and more such functions. Who uses last-mile delivery software?This software can be used virtually by any business that sells a physical product or delivers food and beverages to customers' doorstep. What are the Benefits of Last Mile Delivery Software?The main benefits of using last-mile delivery software are:1. Improved delivery efficiency and accuracy: Last-mile delivery software can help optimize delivery routes and ensure that deliveries are made on time and to the correct location.2. Increased visibility and tracking: The software provides real-time tracking of deliveries, allowing companies to monitor their progress and provide updates to customers.3. Better customer experience: With real-time tracking and more accurate delivery estimates, customers are kept informed and have a more positive experience with the company.4. Increased operational efficiency: Last-mile delivery software automates many of the manual processes involved in last-mile delivery, freeing up time and resources for other tasks.5. Improved resource management: The software helps companies manage their delivery fleet, ensuring that vehicles and drivers are utilized in the most efficient manner possible.6. Better data management: The software collects and stores data on deliveries, which can be used for analysis and to make informed decisions about the delivery process.7. Reduced costs: By improving delivery efficiency and reducing manual processes, last mile delivery software can help companies save time and money. How to purchase a last mile delivery management software for your business?Here are some steps to follow when purchasing last mile delivery management software:1. Identify your needs: Determine the specific problems that you are trying to solve with the software, and what features and capabilities are required to meet those needs.2. Research available options: Look at different last mile delivery management software options available in the market and shortlist a few that seem to be a good fit.3. Evaluate software features and capabilities: Compare the features and capabilities of each option on your shortlist to determine which one is the best fit for your needs.4. Consider the vendor's reputation: Read online reviews and check the vendor's references to ensure that they have a good reputation for providing quality software and customer support.5. Look for integrations: Ensure that the software integrates with any other systems or tools that you are using, such as your e-commerce platform or dispatch system.6. Consider the cost: Compare the costs of different options and determine which one is the most cost-effective for your needs.7. Request demos and free trials: If possible, request a demo or free trial of the software to get a hands-on feel for how it works and to ensure that it meets your needs.8. Make an informed decision: Based on your research, evaluations, and experiences, make an informed decision on which last mile delivery management software to purchase. What are the main problems/challenges faced in last-mile logistics management?• Reducing cost• Ensuring transparency • Increasing efficiency• Meeting delivery timelines due to poor order and inventory management• Delay in deliveries due to poor infrastructure, weather conditions Does WareIQ have its own last mile delivery management software?Yes, WareIQ has a full stack fulfillment platform that integrates with the systems of all national and hyperlocal shipping and courier companies who provide last mile delivery. WareIQ’s platform aids in managing last mile delivery and also helps in tracking pick ups and deliveries, providing information on critical aspects such as:• Courier name• Total pickups• Total scheduled pickups• Pickup date• Pickup point• Downloadable content – Labels, Invoice, Manifest, Pick List, Pack List
April 30, 2022
What is Warehouse Management? Definition, Benefits, Strategies and Latest Trends in 2023
Proper warehouse management is essential for the success of any business. If you sell goods, you must have a place to store them. These places are often fulfillment centers, distribution centers, or warehouses. You can purchase land and buy equipment, but many things need to be considered when managing inventory. You can have the most modern and state-of-the-art warehouse but if it's not operating efficiently, you will have lower profit margins, high operational logistics costs, ineffective leadership, and damaged customer relationships. What is Warehouse Management? Source Warehouse management spans all aspects of operation, from accounting to inventory. It includes receiving and supervising employees, as well as planning supplies and monitoring the flow of products through the warehouse. It is a very important aspect of eCommerce because much of the process of order fulfillment begins at a warehouse so efficient warehouse management is needed so that orders are picked, packed, and shipped efficiently and in the least amount of time possible. [contactus_uth] What are the Benefits of Warehouse Management? A warehouse is an invisible process that works to ensure that the customer gets their product on time. The operations are central to the success of any warehouse, and good management helps these processes run efficiently. Some benefits of warehouse management are: Optimized Space and Lower Operating Expenses Warehouse management seeks to make the most efficient use of available space by determining the area size and analysing the floor plans. This determines where and how products can be stored, such as placing in-demand products and products close to expiry at the front, the rate at which products can be located, either to be shipped or packaged and results in the saving of time, resources and money. Inventory Visibility Warehouse Management can also give insights into inventory levels for various products in multiple categories. This helps retailers to accurately forecast demand and avoid over-stocking or shortages. Effective Labor Warehouse management enables maximum utilization of labour by intelligently assigning them to a specific warehouse based on their proximity, their availability, and their skills to ensure the highest levels of productivity and the complete mitigation of underutilization. This, in turn, saves on time, and money spent on labour and removes any chance of manual delays. Traceable Materials Warehouse management enables the traceability of inventory because products are grouped in sensible ways such as by demand, perishability or expiry date. All products have serial numbers which makes them easily identifiable in any given situation. Optimized Supply Chain Warehouse management is designed to optimize existing processes within a warehouse, which can also extend to the external supply chain. WMS systems can troubleshoot any activity that is causing a delay and suggest methods to streamline those activities to mitigate such a delay in the future. It can also remove any unproductive activities from the process to ensure maximum productivity is being achieved. This helps in saving resources, time, effort, and money. What are the Various Strategies of Warehouse Management? By optimizing warehouse operations and managing inventory, warehouses provide the best services for clients. Warehouses that have poor strategy will have increased costs and wasted capacity. Quality warehouse management companies use a client-focused approach to their warehousing strategies. They provide logistics services to clients to support customer demand. The top expense of any operation is the labour required. Nevertheless, 3,000 hours each year are wasted due to inefficient planning of operations. If you're searching for strategies to increase your profits and lower costs, look at these nine ideas to improve your earnings. Use Sales Forecasts It's essential to use both past and future data when strategizing your warehousing. By thinking about how many orders will come in, you'll be able to plan accordingly. Planning for the future ensures that none of your employees is overworked. Having this strategy in place every quarter will help you foresee any potential problems and take appropriate measures to fix them. These strategies are especially useful in warehouses with heavy volumes, as they provide needed relief to your employees. Determine your expenses It is possible to increase your revenue by reducing expenses. For example, there's a lull in dock activity during the last week of every month. It is an opportunity to reduce costs in labor and equipment. Still, without first figuring out where you need to invest money in your warehousing strategy, you won't be able to plan appropriately. Automate your processes Warehouses can use automation to increase efficiency by providing support for operations and analytics. The warehouse's needs determine the type of automation used. Companies often make life more difficult by using inefficient or ineffective technology. Make sure the software you choose is tailored to your day-to-day operations. Too much technology can be a distraction to your employees. Find that balance between state-of-the-art features and simplicity so employees can quickly transition as they would with an old system. Choose the right location When seeking a warehouse, find one where the talent is plentiful. Choose a location for your warehouse that provides access to the best possible employees for your specific needs. A competitive employer will find a place in reasonable proximity to its workforce when feasible, rather than being directly in the area of other businesses that might take away your talent. They also try to find a location within reasonable commute distance for their staff. Get rid of old inventory Unless you're selling long-term storage space, inventory that doesn't sell costs you money. Space is the primary factor in any warehouse and must be treated as valuable. Clear out your unused merchandise. When you find that the items you carry don't sell or only sell marginally, you could be stuck with them longer than desired. Getting rid of these products and saving space is an opportunity to make some profit. Choose centralized Warehouses Warehousing is a popular strategy in warehouse management, against the traditional use of smaller, regional warehouses. Companies see the benefits of a larger facility that serves the same customer base due to increased savings. Warehousing is cheaper, which means that the logistics of processing orders will also be more affordable. Warehouses require transportation, staffing, security, climate control, and lighting, which often leads to increased costs when there are many facilities. A centralized warehouse can take care of this issue. Outsource To third parties Some companies outsource their warehouse management requirements to a lower-cost alternative that doesn't sacrifice quality to optimize profitability. Logistics providers understand warehousing well and can provide relevant information to help companies to improve quality while reducing costs. Read the blog on eCommerce Logistics Companies to know the benefits of partnering with them. Public warehouses are attractive to companies that outsource their emergency or temporary storage needs. You can also see many other services related to logistics, such as shipping aggregators, freight transport, rail and receiving, container delivery, and import-export logistics. These work well for clients who want full-service logistics for an as-needed basis at an affordable rate. Use Electronic Monitoring Systems Warehouses are no longer reliant on security patrols to maintain safety. While security staff still poses a vital function, warehouses employ technological solutions to reduce the risk of theft. Electronic monitoring systems work well for theft prevention, but they can also monitor against other threats like fire and water damage. Using this system is a great way to reduce your chances of being harmed by an internal or external source. This type of warehouse system may deter theft and reduce the number of people who need access to your items. For customers, it means product safety and low prices. With a reduced amount of labor, businesses can keep costs down. De-clutter Warehouse Operations When carrying out warehousing tasks, it is essential to carry out Lean Operations. By optimizing the resources at our disposal and taking into consideration a "just-in-time" approach, we reduce the time it takes to undertake these tasks: Handling inventoryBetter coordination for effective supply chain managementLooking for stockLoading and unloading onto transport Differences Between Inventory Management vs Warehouse Management [table id=14 /] What Facilities Should You Look for in a Warehouse Management Company? No. of SKUs ( stock keeping unit) Before you begin, you should assess your storage needs. Then, identify the SKU you want it under to track inventory in a warehouse. You can also think about the amount of space needed and what will be compatible or not. You might want to invest in durable shelving made of metal, as it will be a cheaper alternative. Warehouses will charge you based on the SKU, and this can get expensive if you have too many cereal items with different expiration dates. Warehouses often require a minimum monthly order from these companies. However, these minimum monthly orders are affordable if the inventory is readily available or rotated quickly. On the other hand, standalone warehouses are cheap for slow-turnover items with high SKUs. Product Type Warehouses usually don't have cold storage facilities. The product you sell will help determine which warehouse management company is best for your business. If a company requires space to store dairy products, it needs a warehouse that offers temperature-controlled storage. Customers will find glassware, manufactured goods, or perishable items like eggs or seafood in this store. Third-party fulfillment services provide workstations where value-added services are provided. Consider what storage option is perfect for your business. If you sell products that require strict safety protocols, you would be better suited to choose a warehousing management solution with trained staff, fire alarms, sprinklers, and adequate risk-reduction measures. Season Finding a warehouse management solution for your business needs is essential. Public warehouses are ideal because they offer short-term storage and competitive rates. It would be best to think about the time it takes them to deliver and their prices. Public warehouses are worth considering when looking to carry and store seasonal goods. If a company has a high demand, it might run out of space when they have periods of low sales. For example, if a store's turnover is generally slow in the winter season, it may find that stocking shelves during that time is difficult. Warehouse management providers solve this problem by providing automated material handling and storage automation solutions, such as forklifts for factories and warehouses. Contract warehouses offer reliable and long-term storage solutions, while short-term storage facilities are suitable for short-term needs. Under the contract warehouse, customers agree to the contract period before they're paid. Factors like the maintenance fees of inventory equipment affect their charges. Location Your warehouse location will affect the efficiency of your business. Location can impact how quickly you can deliver goods to consumers and where they are stored at your warehouse. The closer you are to customer hubs, the quicker the product can be provided. Warehouse management companies with facilities close to a transport hub make fulfilling orders much more effective than those in big cities. Your warehouse's location impacts your ability to meet the customer's expectations, improve profitability, and get products to customers faster.; however, this can come with a higher price if storage facilities are in rural areas. Read our blog on the 10 best eCommerce shipping companies in India to understand how you can outsource your shipping requirements. Here are some points to keep in mind: A small business should consider locating a warehouse close to their market or office.Companies with large market bases should look for warehouses that can hold specific quantities. Software & Technology Invest in a warehouse management facility and warehouse management software to handle inventory and shipments better. With these tools, you can enhance customer satisfaction by ensuring that the product matches their order, so they are satisfied with what they receive. Warehousing software is a vital tool for those who need to track and analyze each order. These programs are operated by intelligent robots, which automatically manage the order fulfillment process. The automatic routing of customer orders to your warehouse allows you to track order fulfillment more efficiently. You can also use automation to collect purchase orders and manage inventory items. Top 10 Trends of Warehouse Management in 2023 As we bid farewell to 2021, it's also time to gear up for the future with new ideas and strategies to make your business more productive. Warehouse management plays a crucial part in the supply chains of any eCommerce company. But sellers often overlook staying up-to-date with eCommerce warehousing trends to help them stay ahead of the game. As customers demand quicker turnaround times and pressure on eCommerce companies builds, warehouses will need to devise new ways of getting products picked, packaged, and shipped to meet the demands. The best way to increase warehouse efficiency is by implementing warehouse management technology. Warehouse management technologies will likely grow exponentially by 2023, with some reaching full maturities, such as warehouse automation and post-purchase processing. Automation (AI & Machine Learning) As the warehousing industry in India enters a period of consolidation, it will likely begin to integrate more advanced technologies such as robotics, machine learning, and artificial intelligence by 2023. Although, in labor-intensive countries like India, the implementation of robotics can be difficult due to specific tasks only being performed by humans. Warehouse management companies are trying to incorporate machine learning and AI into the back-end. Technologies such as autonomous vehicles will cause the cost of warehouse operations to decline, causing this industry to almost double in size over the next two years. What are some ways in which we can plan for the future? The advancement of automation technologies has led to better self-driving with autonomous vehicles and inventory systems that reduce human labor.Receive instant updates about warehouse and shipping operations with the help of AI-powered inspections, packaging, and processes through business intelligence.The adoption of warehousing solutions that predict demand will take off in the following year. Robots Robotics is becoming integrated into the labor market, and this trend is projected to continue. Robotics help companies increase productivity while also tackling warehouse management and supply chain challenges. Robots will become standard in warehouse management operations in the future. We will move away from fixed automation systems to miniature mobile robots. 5G connectivity and machine vision systems will also play increasingly important roles. Cloud-based Technologies Cloud technologies are advancing, and adoption is increasing. Current advances in hybrid cloud solutions, where components of a project reduce time and resources, will allow companies to implement better strategies. Cloud computing motivates many people to move to the cloud because it reduces costs and increases efficiency. It also helps eliminate data silos that predominate in many warehouse management systems and supply chains. Internet of Things (IoT) The Internet of Things has touched every industry and affected how we see the world. It stretches across interconnected devices, including cars, factory machines, appliances, TVs, and phones. Through IoT, your warehouse management processes can run simultaneously and increase efficiency. It can automatically complete tasks while you remotely access data and lowers costs since you have more efficient resource management. Sustainable Warehousing Many business owners will be looking for sustainable business methods in the coming year. It will change warehousing management techniques in 2023. Ways you can opt for Sustainable Warehousing: Invest in Energy-efficient Equipment You can make your warehouse environment more environmentally friendly with eco-friendly lighting. While the initial cost will be higher, they will last longer and save on energy costs in the long run. Use Less Packaging Packaging made from biodegradable materials weighs less and costs less to ship. Switch from traditional packing materials to biodegradable products. Packing materials made from synthetic plastics and biodegradable materials take a long time to break down. Biodegradable materials can only last for months or years, while synthetics take hundreds of years to break down. Making your packing more efficient may mean you need less of it. Biodegradable materials are also compostable and can reduce waste and carbon footprint. Insulate your Warehouse Properly Ensure that your warehouse is insulated to keep air-conditioned air within the building. Insufficient insulation in your warehouse building results in higher energy costs, increased thermal output, and wasted resources. Water in a warehouse management system leads to wear and tear and increased energy bills. Block-Chain Technology Many stakeholders such as manufacturers, suppliers, customers, auditors and warehouse managers, are involved in warehouse management efficiency. Warehouses are looking for technology to manage transactions, assets, and data. The use of blockchain in coming years will be revolutionary for warehouses. Big Data Data is a significant point in supplying products and warehouse management since it helps with these tasks. Businesses rely on data for more reasons, and companies use more data-driven technologies now than ever before. It also allows for data products that can be used in data visualization to understand trends better. Good access to data and predictive analytics enables cross-disciplinary applications, which are instrumental in warehouse management. Proficient Last-mile Deliveries With the growth in eCommerce, last-mile deliveries are becoming more critical for the industry. In 2019, global eCommerce sales grew by nearly 21.5%. In the next few years, many business owners will strive to provide a shopping experience reminiscent of Amazon by working out logistics in a way that would make deliveries close to same-day. When customers place orders, the company will need to invest in more facilities and distribution methods. What are the last-mile facilities in supply chain management? The Right Warehouse Location Warehouses close to major highways and bridges reduce the cost of delivering to destinations. Building Quality Retailers should always look for properties that have features that allow for efficient utilization, given the demand for high volumes associated with today's retail environment. The archaic nature of traditional warehouses has led to structural limitations, and stretching the electrical capabilities of these warehouses is becoming more and more difficult. Substantial Ceiling Heights For warehouses, it's essential to optimize a high ceiling to set up modern racking systems. Every warehouse should consider the way goods flow in and out. Cross-dock Capabilities The food and beverage industry faces one of the biggest challenges regarding last-mile transport. A company may optimize its facilities' capabilities by cross-docking groceries to solve this problem. Cross-docking is receiving goods at one door and then sending them out through another. Perishable items can be delivered to your shoppers more efficiently, and food does not need to be stored. Sustainable Warehousing Electric charging stations will be essential parts of future sustainable infrastructure for that last mile. The gas costs combined with labor for the final stretch of delivery can add up to over 30% of a delivery's price, so cutting those expenses and providing an environmentally friendly solution could give you a winning advantage. Design & Layout One of the driving factors of warehouse management is its design and layout. It can be challenging to make changes to an existing warehouse, but you'll be glad you made an effort once you see improved productivity and lower accident rates. When you lack space for your automated systems, one solution is to use your vertical space. Technology solutions such as mechanical shelving and big data are also available to help more intelligent warehouse layouts. You can use analytics to monitor where your employees spend the most time so that you can create more efficient workflows. Introduction of Drones With technology moving on, these drones are starting to find their niche in warehouses. They're affordable and easy to use and can quickly map large areas. Drone technology has also been used in shipping and delivery, where it's used for scanning barcodes and RFID tags, inspecting goods in the warehouse, and taking items to an airport. Retail companies will likely use drones for warehouse management by 2023. Amazon has already had success in their warehouses by using them, and now smaller companies will probably start to do the same. For example: Humans are being phased out of the workforce. As technology advances, positions are no longer available to humans, and they are being replaced with machines that can do tasks much faster.A drone equipped with a special camera with optical sensors can scan barcodes at 100% accuracy even when the items are 10 meters away. Suggested Read: Warehouse Management Vs Inventory Management Conclusion: Does Your Business Need Warehouse Management? Warehouses have been around for years and have helped businesses with different storage needs. Today, warehouses are not simply storage facilities because they have changed to be more innovative. Companies that rely on warehouse management can expect increased productivity, satisfaction, and accurate demand forecasting. Some warehouse management companies offer additional services that optimize the supply. Warehouse management must monitor your inventory with many companies providing this service, renting out space, and providing other essential information such as the amount of heat produced or stock being moved. WareIQ can help with all your warehouse management requirements. 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 empowered brands to sell more, sell faster & sell everywhere due to: Access to WareIQ’s strong nationwide network of fulfilment centres, micro-fulfillment centers & urban dark stores near their customersAccess to all major national & hyperlocal last-mile couriers at discounted rates for making same/next day deliveries possibleEasy integration across multiple online platforms & marketplaces enhancing multi-channel sellingHorizontal marketplaces: Flipkart, Amazon etc.Vertical marketplaces: Nykaa, Myntra etc.D2C platforms: Shopify, Magento, WooCommerce etc.Social commerce platforms: BikayiAccess to a superior centralised tech platform for eCommerce operationsML-based prediction engine for efficient warehouse network design & smart warehouse 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 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 ecommerce shipping partners, strategically placed warehouses, economies of scale and scope in warehousing and data-driven decision making. WareIQ Fulfillment Centers 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] Warehouse Management FAQs (Frequently Asked Questions) What is the main purpose of a warehouse?The main purpose of a warehouse is to efficiently utilize the warehouse space, labor and equipment to store & manage inventory while meeting customers' expectations and demands. What are the functions of warehouse management?• Storage of goods• Price stabilization• Minimize Risks• Source of Finance• Packaging Why should warehouse management be outsourced to 3PL?• Logistics optimization and scalability • Multiple warehouse and larger geographical reach• Time Efficient • Real Time Tracking and Insights • Warehouse space utilization• Better technology What are common problems in warehouses?• Poor warehouse structure• Poor inventory management• Poor management for seasonal demands• Poor order management• Excessive labor expenditures• Poor damage control Does WareIQ offer warehouse management?Yes, warehouse as a 3PL fulfillment service provider offers efficient warehouse management.
April 29, 2022
10 Types Of Warehouses in eCommerce & How Does it Work in 2023
What comes to your mind when you think of “eCommerce Warehousing”? Typically, we think of a huge shed-like space with an unsightly number of racks and shelves, goods and containers strewn all over, amidst a monotonous surrounding. It is important to note that there are many types of warehouses and it may be surprising that typical modern-day eCommerce warehouses are the complete opposite. They are clean, brightly lit, well-organized, and filled with an unending buzz of frenetic activity. People, parcels, technology, monitors, goods carriers, and mini-cranes, the list is endless. Read further to get a better understanding of the different types of warehouses in eCommerce and which would be the right fit for your business. What are Warehouses? The concept of warehousing: The formal description of eCommerce warehouses is that they are huge structures such as a building or shed that houses goods and cargo (both raw materials and finished goods) till they are ready to be shipped further. Naturally, the sizes, locations, infrastructure, and scale of warehouses vary greatly depending on what they are used for, the position they occupy in the fulfillment network, and so on. Several elements impact the selection of the type of warehouse you should choose, such as the industry it serves, what its ecosystem looks like, and locational and definitive business requirements. Importantly, all this directly impacts achieving customer satisfaction, which is the ultimate metric of a successful business. The eCommerce warehouse is an important cog in the order fulfillment wheel – it not only stores inventory but also forms a close working relationship between online firms, its distribution model, and the final customer. A strong network of eCommerce warehouses is critical-to-success for eCommerce firms. Third-Party (3PL) logistics, warehousing, and fulfillment centers: 3PL fulfillment companies conduct a host of services for their clients. Typical examples are inventory storage, order receipt, processing, dispatch, and cross-docking. Given the range of services and scale that 3PLs offer as a one-stop shop, it enables the supply chain to function more efficiently, faster, and more economically. As a result, its clients can focus on running the core elements of its business, i.e., sales, consumers, logistics innovations, profitability (etc.) without any extra hassle. When an online retailer outsources its warehousing and eCommerce fulfillment requirements to a 3PL, its capabilities - across locations, inventory, trained employees, optimized cost structures and compliance - help firms achieve seamless and efficient warehouse logistics. In addition, your 3PL’s warehousing capabilities should keep pace with your expanding needs as you grow. Additionally, you can learn about different types of warehouses here. [contactus_gynoveda] What Factors Do You Need to Keep in Mind While Choosing a Warehouse in 2023? When contemplating starting a new eCommerce business, or a business of any sort that involves the movement of materials and goods, your warehouses and fulfillment centers become an invaluable element for success. Not only must they synergize with your business strategy, but must also tick all the checkboxes that matter. Listed below are some leading factors that you must consider while selecting between the types of warehouses for your business: Efficiency in design and layout Firstly, the design and layout of your eCommerce warehouse must be determined by your requirements, i.e., the type of goods, the storage guidelines, government rules (etc.). You shouldn’t put the cart before the horse. Not all eCommerce warehouses are built equal. For example, if an old building with limited column spacing or ceiling height would affect that type of cargo and your eCommerce warehouse operations, then other types of warehouses would be better suited for you. Select the one's where the design has been developed, keeping in mind the flow of raw materials into eCommerce warehouses and, likewise, the flow of goods outwards. These warehouses are hubs of activity. People, machines, technological equipment, electrical connections, various controls, and many other components are all working in close proximity. As you would imagine, many of these elements could create a dangerous scenario for life and property if not managed properly. Therefore, make sure to check for an ergonomically designed layout that would ensure a seamless and efficient union of man and machine. For example, rough surfaces or sharp edges of shelves must be eliminated. Availability of workforce By extension of the point above, they employ hundreds of workers who work around the clock. Selecting a warehouse because they are cheaper and whose locations are mostly in remote areas may affect your ability to attract workers or cause them difficulty in their daily commute, and safety, even if you plan on moving your existing workforce from one location to another. Therefore, selecting a location that is easily accessible by your workforce is generally a key criterion for choosing the types of warehouses. Locations with a dense population and the presence of convenient transportation hubs generally score highly while making this selection, especially the latter. Even if commuting takes some time, at least it is made convenient. If your requirements have seasonal variations, then living quarters, canteens, banks, grocery supplies (etc.) to facilitate your workforce also become important. Operational intensity The intensity of operations and which way this intensity will go in the future is another important consideration. If your operations are light enough, then you can select the type of warehouses accordingly. Other variables such as outdoor facilities for storage, noise pollution caused, emissions (etc.) form a part of the consideration set when choosing a location(s) for your eCommerce warehouses. Accessibility to transportation Unless warehouses for eCommerce are closely connected with convenient modes of transport, it would be self-defeating. Remember that transportation makes up about 20-25% of your operating cost and directly affects the delivery times you can achieve. For goods that are fragile or need temperature-controlled transportation, poor accessibility would mean additional difficulties. Whether air, water, rail, or land - whatever your needs are, it is important that the location of your warehouse is easily accessible. For example, if you deal in heavy cargo across international borders and use ships to carry your goods, you would likely need a strong road or rail network to complete the cargo movement (both inward and outward). The capability of handling material Again, the type of products, cargo, and materials that make up your business will always be the determining factor in the types of warehouses you select. If fragile items (e.g., art, crockery, glass, and jewelry) are your main line of business, then ground floor locations are ideal, or at least not on a much higher level. In such cases, the layout of eCommerce warehouses should be spread out horizontally versus one with several floors. If hazardous chemicals or materials form part of your cargo, then you will almost certainly have to use locations that are peripheral to the city. Most governments also have guidelines that regulate the layout and location of different types of warehouses, depending on the inventory. Equipment, cross-docks, and staging facilities are critical in material handling, and you must consider this while choosing a warehouse. Available data makes it painfully evident that a significant percentage of breakages and product damage occurs during loading and unloading procedures. If trucks are your first mode of transport, then eCommerce warehouses must have depressed docks, which may need to be internal, and so on. Similarly, one cannot operate a vast distribution network unless the warehouses have cross-docks. Availability of space Well, this is probably the most obvious requirement of all. Unless eCommerce warehouses are sized to house your entire inventory in all its various shapes and sizes, they haven't fulfilled their most basic requirement. For companies starting or expecting to grow rapidly in the future, the capability of different warehouses for expansion is important. The network maintained by your 3PL is also important – you wouldn't want to select a 3PL that doesn't operate fulfillment centers or warehouses in locations you expect to grow into. Ability to comply with regulations Just like all aspects of business operations have to comply with their applicable rules and regulations, so do eCommerce warehouses. Before selection, you must be aware of the applicable laws in your location and ensure that your warehouse provider adheres to them. For example, you cannot store certain types of goods (e.g., hazardous materials) in certain areas. Or, you may need to hire local workers for your eCommerce warehouses. Proximity to customers Naturally, proximity to your end customers is an important consideration. If your target group is located around a specific region, using warehouses for eCommerce activities in that area itself will offer a strategic advantage. You can fulfill their needs quickly, better understand their requirements, and get accustomed to their purchasing habits. What Advantages Do Warehouses Offer? There are many advantages of using a capable and well-organized network of eCommerce warehouses. Let's look at some important ones: Operational efficiency When you outsource your warehousing requirements to a 3PL firm, you are aware of the capabilities of their services. The relationship is based on a well-defined SLA with clearly defined expectations from both parties. Therefore, once up and running, your partnership enables you to achieve an efficient operation quickly due to: ExpertiseFlexibilityMeasurability The combined impact of all these factors results in a significant saving of time and resources. Inventory management Your warehouse management service's driving objective (WMS) is to keep your customers happy. That means delivering their parcels safely, on time, and at competitive rates. Additionally, customers want to be kept in the loop about the progress of their parcels. Therefore, WMS ensures real-time information on parcels in transit and identifies them with a host of trackers such as SKU, batch details, serial numbers, etc. Data about the movement of goods, to and from eCommerce warehouses, is updated in real-time. The combined effect of all this is that your entire inventory management, including re-order levels, reverse logistics, current and developing trends, and projected requirements, is taken care of. This is very important for retail warehouse since it helps them understand consumer behavior, plan for future requirements, expand their range of products, etc. Flexibility If you decided to retain your warehousing and storage as an in-house function, you would potentially be limited by your ability to handle extraordinary circumstances or obstacles. For example, if an emergency were to arise or a larger-than-anticipated order was received, you would need to dedicate additional resources to handle such a situation. Possibly, workers wouldn't be trained or have enough time to handle the situation successfully. Because of this, partnering with a 3PL for your warehousing needs would set you up to benefit from their capabilities. 3PLs are vast global organizations that deal with a wide range of clients, ecosystems, and geographies. Due to their scale and experience, they are supremely equipped to handle a vast array of functions and annul potential problems. Risk mitigation As you would've guessed by now, running operations of eCommerce warehouses isn't an easy task by any means. It requires significant investment, expertise, a large workforce, the latest technological systems, employee recruitment and training, and tax and legal compliance. While the scale of business offers profit and acquires market share, it also brings risk, i.e., the costs of failure such as being upstaged by competition, being made obsolete by innovation, or just being forced out by better, more efficient players and also a potential increase in logistical costs. Such significant expenses, including CapEx, when locked by order fulfillment and warehouse service activities, create inefficiencies that will show up in your business results sooner than later. However, using efficient warehouse services achieves the exact opposite, i.e., it takes away the risk of investing and maintaining your network of eCommerce warehouses and allows you to concentrate on managing the core business. Over a period of time, this improves profitability and productivity. Therefore, make sure you analyze your needs accurately and select the right 3PL accordingly. Modern technological systems Just like the very birth and growth of modern-day eCommerce behemoths is a result of progressing technology, so are the benefits offered by 3PL warehousing services. Fully integrated systems seamlessly connect with online platforms and stores. Some examples are given below: Order management (receipt, processing, delivery)Order-delivery servicesComprehensive distribution servicesOrder trackingInventory management in real-time Automated re-order levelsDetailed and automated reports What are the 10 Types of Warehouses to Look for in 2023? Let’s look at the top ten types of warehouses. While each has its pros and cons, your business requirements determine which one would help you run your operations in the best possible way. Private Warehouse Source As the name suggests, they are types of warehouses that are owned and operated by manufacturers, traders, and resellers and are exclusively used for their supply-chain management and activities. As the costs and fees of availing the benefits of private eCommerce warehouses can be high, many warehousing companies prefer to use (or combine them with) the services of public warehouses. Maintenance costs include fixed costs and variables. CapEx, insurance, taxes, interest, etc. make up fixed costs, whereas outgoing monthly costs like operating/maintenance are variable. Firms typically use private eCommerce warehouses for: Building a competitive advantage over the competition Servicing a geographic area with an elaborate network of warehouses and fulfillment centersMatching company scale/ growth requirements with the warehouse’s services and capabilities Typical examples of private eCommerce warehouses include: Producers (e.g., farmers) construct and manage eCommerce warehouses near their farmlandsWholesalers/ Retailers construct eCommerce warehouses close to their distribution and selling centers, or production unitsRetailers take eCommerce warehouses exclusively on rentWholesalers lease or own eCommerce warehouses exclusively Public Warehouse Source Public warehouses are types of warehouses that enable their customers to achieve a high degree of freedom of operations in managing their supply-chain network. Since private eCommerce warehouses may not be affordable, this option is always viable for such firms. Naturally, renting or buying is often unaffordable for eCommerce startups. Therefore, utilizing public eCommerce warehouses on a short-term or long-term lease, usually available by monthly agreement, becomes a viable option for such small businesses. Agreements could be based on cost-per-square-foot or even on a cost-per-pallet. Generally, warehouses for eCommerce will also offer services like building maintenance, organizing transportation, inventory management, and employing workers to manage operations etc. It works out well since all costs are apportioned across several clients, and you pay a proportionate amount. Distribution Center Source Distribution centers are types of warehouses that have become a critical cog in the eCommerce supply-chain wheel. Due to the increased usage of technology and electronic tools, these distribution centers can now provide reliable and efficient transportation for cargo. Typically, such distribution centers have a much larger storage capacity than just a warehouse and provide prompt transportation facilities for huge volumes of cargo, on short notice. These centers are also located close to transportation hubs to optimize the speed of receipt and delivery. An ideal example is the distribution of highly perishable products, e.g., fresh vegetables and fruits. The receipt, sorting, and packing/ repacking of such products are done within a working day to minimize wastage. Cold Storage Source Understanding the type of storage this type of warehouse provides is pretty transparent. Cold-storage facilities are types of warehouses that are critical for temperature-sensitive products such as medicines, pharmaceutical products, fresh produce, ice creams, plants, meat products, etc. Perhaps, the importance of such a facility was recently reinforced when the Covid-19 vaccines had to be transported and stored under stringent temperature control measures. This goes a long way in ensuring the projected shelf-life for these goods. Pick, Pack & Ship Warehouse Source When eCommerce warehouses receive an order – whether from a physical store or an online portal – the process followed thereafter is to “pick, pack, and ship” the product. And, hence these are types of warehouses that are named after that process. They use modern gadgets like scanners and workers/robots to pick the products, required to fulfill their list. These "picked" products are then packed, tagged, and loaded into containers and shipped to their destinations. Read our blog on shipping aggregators to understand how you can outsource your shipping and distribution requirements to dedicated companies. Smart Warehouse Source Smart warehouses are types of warehouses that have increased in importance in the Modern Age, where everything is run by rapid advances in technology. The very existence of new business models such as eCommerce and the "App Economy" gives us daily reminders of this sensation. Additionally, tools such as data analytics, Artificial Intelligence, and Machine Learning provide the backbone for running these modern, tech-driven ecosystems. Smart eCommerce warehouses are no different. When businesses seek to eliminate the costs of human error, smart eCommerce warehouses become a go-to option. Extensive use of drones and robots is deployed in warehouse operations, and manual intervention or usage is minimized or eliminated. However, this model does have some limitations and has stringent requirements for successful operation - the entire warehousing procedure needs to be redesigned so that the technology can be incorporated. This requires technical know-how, and upfront investment and necessitates training/retraining of warehouse employees. Breakeven and profitability may take several years. Bonded Warehouse Source Bonded warehouses are types of warehouses that can be owned by both private and government agencies and are a mechanism utilized by the government to ensure that the importers/exporters of these goods pay their due taxes on time. Without paying their taxes or duties (e.g., import duty, excise), an importer cannot even open their goods, let alone claim them. As you can imagine, bonded eCommerce warehouses have a crucial role to play in cross-border trade, and those eCommerce firms that supply orders across international borders are well-served by them. This also works well for importers that can stock their goods here until they find a buyer for these products. Since firms do not have to pay any duty till they want their goods released, it works efficiently. For private agencies to operate bonded eCommerce warehouses, they need to get the required licenses as issued by the government. Climate-Controlled Warehouse Source If you think that simply a temperature-controlled environment for your goods isn't enough, then climate-controlled eCommerce warehouses offer the next level of protection during storage. They are types of warehouses that control the temperature and humidity under which your goods are stored. For many products, the correct humidity levels prevent mold or mildew formation, which harms fabric, wood products, paintings, and artifacts, amongst many others. Both humidity and temperature are controlled to a stringent standard, and the variances allowed are minimal. This ensures a consistent atmosphere. Cleanliness and overall facility upkeep are important features that climate-controlled eCommerce warehouses must be particularly mindful of. Government-Owned Warehouse Source They are types of warehouses that the government, whether State, Central, or an affiliated agency, owns and manages. They are available for use by private eCommerce firms and often present an economical option for startups or businesses that are growing while effectively offering the same services. Importantly, they offer peace of mind since the government manages them. The Central Warehousing Corporation of India is a renowned example. Cooperative Warehouse Source Cooperative Warehouses are one such type that are owned and managed by cooperative societies. They tend to be non-profit since their objective is to promote members of the cooperative, who can use these warehouse services at reasonable rates. Milk, winery, and farmer cooperatives are good examples. eCommerce firms that operate within their purview can take advantage of such types of warehouses. Conclusion: Does Your Business Need a Warehouse? Well, as evidenced by the above article, you should be able to see the numerous benefits that a well-researched, efficiently managed, and elaborate network of eCommerce warehouses brings to your eCommerce business. While there may be cases of companies (e.g., a fledgling startup) that may make do with an in-house option (e.g., garage, basement) in the initial stages, growing companies will almost always opt for type of warehouse that suits their requirement and adds value to their business. WareIQ is a company that offers many ecommerce warehousing services that your business requires. 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 fulfillment is a service where WareIQ offers you seamless management of your inventory and order fulfillment operations in WareIQ fulfillment centers, which are located near high-demand clusters. You store your product in our fulfillment center where we take utmost care of your inventory. WareIQ has customized 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”. WareIQ's warehouses are present across the nation. We place inventory closest to your customer using a smart inventory placement system based on AI-ML algorithms. So when the customer places the order, the item is available in the closest fulfillment center to them and it is then delivered by same/next day via our shipping partners. [signup] Types of Warehouses FAQs (Frequently Asked Questions) What are the different types of warehouses?• Private Warehouse • Public Warehouse • Distribution Center • Cold Storage Pick, Pack & Ship Warehouse • Smart Warehouse • Bonded Warehouse • Climate-Controlled Warehouse • Government-Owned Warehouse • Cooperative Warehouse What is the difference between warehouse and warehousing?A commercial building generally used for storage of goods and is used by wholesalers, manufacturers, exporters, and more is a called a warehouse and the process of proper storage and handling of products and cargo using scientific methods in the warehouse is referred to as warehousing. What are the different functions of an eCommerce warehouse?• Storage of products• Taking care of goods• Transportation of goods• Management of finances• Value-added services • Information management In a warehouse, what exactly is warehouse logistics?The physical flow of products during receiving and shipping, as well as the data connected with this flow, such as delivery times or product information, is referred to as warehouse logistics. Which warehouse is best suited for my business? Does WareIQ provide warehousing service?The purpose of each warehouse has its own requirements and needs. Whichever warehouse you opt for, ensure to keep both your short-term as well as long-term distribution needs in mind.WareIQ has a vast network of fulfillment warehouses, dark stores that allows online brands to store inventory closer to their customers enabling same/next day delivery. WareIQ also provides warehouses with cold storage facilities & also offers custom packaging when requested by the online & D2C brands
April 27, 2022
What is Fulfillment by Amazon (FBA)? How Does FBA Work in 2023?
Fonts must be clear.Labels must not be faded.A direct thermal or laser printer must be used.Only certain types of packaging material are allowed …. And the checklist on how to prepare inventory for FBA or Fulfillment By Amazon goes on and on. Amazon ships 35 items a second and that’s because FBA runs like a well-oiled machine. But it can be a mind-boggling overload of instructions and information for vendors. Failing to comply with FBA preparation requirements may result in being charged for non-compliance, and products being returned, disposed of, or blocked from future shipments. And that’s not a situation any vendor wants to be in. A fulfillment center for FBA prep services can lift the weight off your shoulders. Using the right service, like the one offered by WareIQ for instance, will ensure your inventory is prepared according to Amazon’s regulations and standards and delivered to Amazon. WareIQ is a software-only platform that connects and centralizes a nationwide network of fulfillment centers and last-mile couriers partners. Once products are sent into a fba prep service, you can focus on other aspects of your business, like sales, marketing, and scaling up for instance! Let's first understand what is FBA & how it works in 2023. What is Fulfillment by Amazon (FBA)? The Fulfillment by Amazon (FBA) program offers sellers the ability to ship products directly from Amazon to their customers worldwide, saving them time and money and providing more flexibility in their selling practices. It helps sellers with storage and packaging, too. How to Register Your Business on Amazon FBA? To register as an Amazon seller, go to the Seller Registration page and click the ' Register Now ' button. During the Amazon seller registration process, you will need to provide basic information such as the business entity's name, the company's address, and the company's phone number. Business entity name You should register as a Limited Liability Partnership (LLP), One Person Company (OPC), or Private Limited Company (PLC) when becoming an Amazon seller partner, as these entities offer limited liability protection and are simple to start. Business promoters who sell products through online eCommerce platforms like Amazon could theoretically be sued or held liable by vendors/customers. Hence, it is important to have limited liability protection. Either the entity’s name or the proprietor’s name should be entered. Contact details: Office address and phone number Registration requires you to provide the entity's registered office address or business address and a phone number, which can be a mobile phone number, for voice calls or SMS verification. GST registration information GST registration is not required for sellers selling certain products not covered by GST. However, all other sellers selling products for which GST is applicable must provide a GSTN number to begin selling their products on Amazon India. Bank account information Amazon India requires potential sellers to provide the following information regarding their bank account to complete the seller registration process: Bank Account Holder’s NameBank Account NumberBank IFSC CodeAccount Type Once Amazon receives the above information and the compulsory Amazon Partner Quiz is taken, you can start selling on Amazon India. A seller's dashboard on Amazon India offers complete information about listing products and managing listings. [contactus_gynoveda] How Does Amazon’s FBA Work? Source FBA on Amazon’s platform is easy and direct. First, list all the products you want to sell on Amazon’s marketplace. You will get a notification after a customer makes a purchase, requesting you to ship them the product. You may initiate the delivery of the chosen product to the customer and confirm shipment or allow Amazon to fulfill the order for you. After this, Amazon will credit the funds to your bank account after necessary deductions, such as its fees. How Does FBA Work on Amazon? In short, after you have been accepted to Amazon's FBA program, you will need to register Amazon's fulfillment center as an additional place of business with the tax authorities. Then, you will need to list your products and unit quantities in advance to be fulfilled.Prepare and label products or product lists and packages for shipping.Ship the products to Amazon.Amazon receives and stores product units in Amazon's fulfillment center.Orders are shipped directly from one of Amazon's many fulfillment centers to the end customers. Source What are the Benefits of Using Fulfillment by Amazon or FBA Services? FBA allows your products to be listed on Amazon and makes them eligible for several eCommerce-related benefits. Grow your business by putting Amazon's world-class fulfillment technology to work and delight your customers with excellent customer service. Buyer and End-user Confidence Having Amazon associated with the seller's products makes the buyer feel more confident and makes the seller more attractive to them. One benefit is having Amazon's name associated with the product. Most customers will appreciate Amazon’s quality stamp, making them more comfortable buying from the seller. Unmatched Customer Service FBA provides excellent customer service and efficient delivery without charging the end customer. It also has a 24/7 support team that handles every aspect of selling – from recorders to providing customer service on the sellers’ behalf. Amazon’s customer service team also handles FBA sellers' product return management. Lower Shipping Fees Because of Amazon's relationship with shipping aggregators, sellers can offer shipping at a lower cost than if they delivered their items from their individual accounts. They can also offer free shipping. Multichannel Fulfillment Amazon's fulfillment centers allow FBA sellers to store inventory, ship it quickly, and manage stock outside their own marketplace across multiple channels. These warehouses allow FBA sellers to safely store their inventory in Amazon fulfillment centers, which efficiently ship products quickly from multiple channels. Standardized Shipping Process When a buyer orders an item from Amazon, the product is picked up from its inventory, suitably packed, and dispatched. The shipping process is standardized – customers' orders are dealt with in the same way for all products, whether they are Amazon products or third-party FBA products. Wide Product Range Sellers can scale operations more flexibly without investing in an additional warehouse when selling with Amazon, as it can handle a wide selection of products and large volumes without a lot of growing pains. Amazon fulfills the following categories of products: BooksBeautyConsumer electronicsCamerasVideo gamesDigital accessories, such as mobile and PC accessoriesJewelleryLuggageMobile phonesMoviesPersonal care itemsAppliancesToys, etc. No Minimum Cut Off Required FBA does not require a minimum number of items to use it. Side Hustle In today's world, one of the key reasons people are setting up eCommerce businesses is to earn passive income by outsourcing major business tasks to Amazon. You can automate the rest of the processes by using Amazon software. Income can be generated from anywhere in the world. Huge Storage Space and End-to-end Order Fulfillment Amazon outsources space for storage. This means you can store your inventory in Amazon's fulfillment centers, and they will fulfill your orders on your behalf – you won't have to worry about order fulfillment. In contrast, if you choose the Fulfillment by Merchant option, you'll have to bear the cost of storage and shipping. These costs can be cumbersome, especially if your business has a small budget or no space for storage. Massive Customer Base and Great Brand Image There are over 300 million active buyers on Amazon. Selling on the platform gives you access to all these people. FBA will also boost your chances of increasing sales through branded shipping. You will be selling products with the Amazon logo and packaging material, making customers instinctively trust you and they will be more inclined to buy from you. Ease of Use Amazon FBA is the best option in terms of convenience – you don’t have to handle a shipment, dispatch an order, or deal with packing materials, returns, or customer service issues. What are the Expenses Associated with Fulfillment by Amazon (FBA Fees)? FBA (Fulfillment by Amazon) fees charged by Amazon are: Standard Seller Fees: About 15–18% of a product's price becomes the seller's fee. Amazon charges 15% on certain products. However, hidden costs – for example, refunds – increase the overall charge to the seller. Fulfillment Fees: Fees are determined by unit size, shipping, service, handling, and purchase returns. Referral Fees: This is paid for each item sold and can range from 8–15% based on the product category, such as consumer electronics, home/garden, and personal computers. Storage or Inventory Fees: These are charged depending on the product size tier, the average volume per day, and the calendar month. Besides monthly inventory fees, Amazon fulfillment centers charge for inventory units kept for more than one year, called storage fees. The FBA dashboard's reporting section allows you to see what fees you're paying to Amazon as part of the FBA program, which covers settlement fee reports and stranded inventory reports. Amazon keeps it transparent, which helps calculate costs associated with FBA and make important inventory decisions. International Shipping: Using FBA, with Amazon's 150 million square foot storage space and over 29 million units shipped worldwide, sellers can now export their inventory globally. Amazon offers domestic and international shipping options by air and ocean shipping modes. Fees are charged for these services provided by Amazon for individual accounts. Your products are stored in Amazon fulfillment centers, with increased visibility on Amazon. It picks and packs your products when a customer orders them, ships your products to them, and offers support for Amazon-sold products. Read our article on logistics costs to understand what they are and how to mitigate them. Suggested Read: How to Choose the Best Amazon Pricing Strategy? Why Should You Choose Fulfillment by Amazon? International Shipping: FBA allows the seller to receive inventory that originated in another country, and sellers will have to arrange the customs clearance and other paperwork and arrange for the delivery shipment to the Amazon facility. This changes the game for international product shipping and eCommerce fulfillment. Your products are sent to a district Amazon warehouse, which will be decided by Amazon. Amazon reserves your stock in its warehouse following all safety protocols. Once a customer makes a buying decision, Amazon handles the entire process, from payment to inventory updates and customer support, including dealing with returns and refunds. Amazon credits the profits you receive from your sales every two weeks into your registered bank account. Essentially, Amazon FBA mimics having your own storage space, packaging unit, and logistics partners, providing the same benefits. Amazon takes care of dispatching orders and handling all email correspondence from your customers, including informing them when their order has been shipped and when it will reach the end customer. It takes credit card payments and handles shipping for you as well – all you must do is provide the products. Amazon's Brand Advantage and Reputation: Amazon is a world-renowned and trusted brand. Orders from Amazon are guaranteed to be delivered. Also, customers love the return policy. This is a huge factor in making a purchase decision. Super-fast Delivery: Sellers can ship products to their customers more quickly because Amazon offers a superior, technology-driven online ordering system that provides faster processing and delivery of products and also provides fulfillment status information and tracking facilities for both the buyer and the seller. This provides a better ranking on the Amazon website and better visibility of products. When a seller isn't using FBA, products show the total price (the price and shipping costs together). However, FBA sellers show only price, which is lesser than other sellers, enabling them to rank higher in the search results. Read our blog on micro fulfillment centers to understand how they can contribute to super-fast delivery. Reduction of Overheads: FBA makes it possible for you to focus on increasing your sales and profits without worrying about staff, storage, or administration. Increased Productivity: The biggest benefit of this program is a surge in productivity. In this way, you can spend time improving your business rather than chasing after returns, inventory management, packing, and transportation of products. Flexibility to Run Your Business Anywhere: Regardless of where you live, you can earn consistent income as a seller with FBA. Your orders will be handled by Amazon 24 hours a day. Fewer Customer Queries and Customer Service: With FBA, Amazon handles your customer service. A buyer can contact Amazon's customer service department if they have a problem with their order rather than you. You’ll avoid unnecessary stress and frustration by not needing to speak directly with customers. Amazon Prime: Another feature is that products sold via FBA are automatically eligible for Amazon Prime. When a business becomes a Prime-eligible seller, it can also sell to Prime subscribers, which can double their sales. Vast network: Amazon currently operates in India through several technologically advanced fulfillment centers across Maharashtra, Karnataka, New Delhi, Haryana, Tamil Nadu, Gujarat, Rajasthan, Punjab, Telangana, and West Bengal. Amazon has end-to-end, advanced fulfillment solutions along with a massive network. Great Partner for Business Expansion: As an example of how Amazon FBA can be beneficial to you, consider the following situation: you have conducted your research, sourced your products, and have two or three hot items all selling well on Amazon. Your business is definitely doing well. As a seller, you are probably thinking about buying more stock at this point, but you lack the storage space to store it. You are also concerned about how long it will take you to dispatch more orders. Amazon FBA can do wonders for you to expand the business and ship products to almost any geographic location. Seamless, End-to-end Fulfillment Service: As Amazon's Fulfillment Service is designed to be so seamless, customers usually aren't aware that they are buying from a third-party seller using Amazon FBA. It is so streamlined that when customers purchase from Amazon, they will usually be completely unaware that they are buying from a third party. Purchasing directly from Amazon and through Amazon FBA will be almost identical to each other, with the same delivery options, return and refund policies, and excellent service. Therefore, as you might expect, this solution can be very beneficial to Amazon sellers and can certainly eliminate a lot of time-consuming tasks, but it will require effort to implement, just like any other business strategy. By using the Amazon fulfillment network, Amazon has solved one of the biggest problems in the eCommerce industry: how to make the eCommerce shipping process easy, quick, and simple? Wow Factor: Amazon FBA is a great service, especially for those who want to avoid the hassle of managing their own distribution and fulfillment networks. Customers trust products labeled "Fulfilled by Amazon" products. The "Prime" checkbox or the "FREE Shipping on eligible orders" note in the search results is what people look for when they're trying to meet Amazon's free shipping requirement. Free Shipping: In the past few years, Amazon has built a great reputation for free shipping, and FBA allows you to use that to your advantage. Currently, free shipping is such an important part of Amazon's businesses that if you do not offer it (either through FBA or on your own), many people will look for a competitor that does. Using FBA makes it easy to offer free shipping. Its shipping rates for products sold on Amazon will be much lower than your own rates, so you can offer free shipping to your customers. "Free" shipping is a way of life for many buyers now across all geographic locations. Reverse Logistics: Reverse logistics is no more a hassle with FBA doing all the work, not to mention offering customer service and answering queries. Amazon's "free returns" are not free to the business but only to the customer. If an item is returned through this service, the business must still pay a return processing fee. It's a lot cheaper than hiring a customer service team, but it definitely isn't free. Ease of Use: Anyone can make FBA work for their business. It takes the hassle of dealing with shipping logistics or processing returns from customers away from the business so that one can concentrate on their main business. It does come with a few issues, but they can be calculated and worked out to be a plus for the business. Therefore, looking at the huge customer base and great reputation that Amazon as a brand has built, the answer to whether selling products on Amazon is worth it is for you, as a business, to decide. Related Article: What should you choose FBA or FBM? Who are the Chief Competitors of Fulfillment by Amazon in 2023? Online retailers are vying for customers in India, which is expected to become a $1 trillion digital economy by 2025. Foreign-funded companies cannot hold eCommerce inventory in India at the moment. While Amazon had hoped that those rules would be relaxed, the proposed policy calls for harsher controls – even on the phantom sellers that Amazon and Flipkart use to circumvent the rules. That means the eCommerce giant and its preferred resellers will not be able to offer great discounts on its items. These are Amazon’s main competitors in India. WareIQ Source WareIQ is a startup founded recently in 2019 but has quickly grown to be a great alternative to Amazon’s FBA. It combines the latest software technologies and platforms to give the customer a great fulfillment experience. The low cost and transparency of same-day and next-day delivery make it accessible to everyone. WareIQ provides its customers with a nationwide network of fulfillment centers and ecommerce warehouses close to their location. Moreover, it has tie-ups with numerous couriers, making same-day and next-day delivery cheap and possible for all customers, whether large-volume or small-volume. With the latest cutting-edge technologies and platforms, WareIQ’s WMS offers: Shipping management servicesPrinting of labels and packing services in a technologically advanced manner to make it easy to use for any sellerLatest technology to handle failed deliveries and redeliver them Order management servicesServices to point out where exactly the order is, which phase it is in, and its estimated time of arrival Inventory management servicesWareIQ can disperse inventory boosting for speed, location, and low cost Warehouse management servicesIt takes full ownership of the inventory and provides safety to the stock – a chief reason behind WareIQ’s success The WareIQ platform consolidates both national and local couriers, thereby cutting costs and increasing delivery time. This cut in cost is passed on to sellers, even those selling minimum quantities. This is a big benefit to small-scale and new sellers. WareIQ RUSH is a same-day delivery program that has taken the fulfillment industry to another level. Even small eCommerce sellers can reap economies of scale, low costs, and high-speed delivery, however small the quantities shipped. Many brands, such as Future Group to Kama Ayurveda, have trusted WareIQ as their fulfillment partner. Flipkart Source Amazon's biggest competitor in the Indian eCommerce market is Flipkart, which continues to grow. It was founded in 2007 and is one of India's leading online eCommerce sites. Amazon and Flipkart have similar business models. Flipkart's revenue is increasing steadily, with a reported 12% increase every year. Plus points Low prices Flipkart Fulfillment lets you utilize its latest state-of-the-art fulfillment centers at extremely low prices. Safety protocol Inventory is stored with all safety procedures followed so that the business does not incur any loss. Huge warehouses all across the country Flipkart stores all inventory in warehouses, so sellers don’t have to worry about their stock once it reaches Flipkart’s fulfillment centers. Quality testing All stock and inventory are checked for quality. Packaging and bubble-wrap Flipkart makes sure that the products are packaged and sent to customers in proper condition. ShipBob Source ShipBob is a 3PL logistics and eCommerce fulfillment company that delivers orders with next-day delivery to brands that serve direct-to-consumer customers. It was founded in Chicago in 2014. Plus points With 2-day shipping at affordable prices, this company is transparent and affordable. It manages eCommerce fulfillment from start to finish, which is a huge relief for sellers. The reason for its success is an easy API that integrates with the seller’s platform, providing leverage in terms of speed as well as cost. The seller's platform can easily integrate with ShipBob’s platform and use its highly advanced software to provide the best services to the end consumer. The user interface is simple and provides ease of useA large network of warehouses located in different locationsProviding order management services when a product is out of stock Minus points Its pricing is not easy to understand or calculate, which has been reported by a few sellers.Customer support is not top of the line.Cooling and refrigeration are not possible in ShipBob warehouses. Deliverr Source Deliverr, a San Francisco-based company founded in 2017, provides comprehensive solutions for small business order fulfillment. It provides a 2-day delivery service which has been a major hit with eCommerce logistics companies with a relatively smaller scale of operations. Its goal is to provide customers with an enjoyable and hassle-free experience, including transparent pricing, seamless ordering, and a good customer experience. It provides live data tracking feature which offers an accurate date of fulfillment. It also services direct-to-customer businesses with next-day delivery options. Plus points Pricing is transparent. It provides adequate customer support to its clients.Deliverr provides integration of its platform to the seller’s eCommerce platform, providing the best services to the end customer. Minus points It does not provide international fulfillment services, only local services.No telephone support is offered to customers. Shopify Source A multinational eCommerce company based in Ottawa, Canada, Shopify Inc. was founded in 1998. Retail point-of-sale systems and eCommerce platforms for online stores are an added feature of Shopify. Plus points Shopify allows for creating a business and enabling its online operations from scratch. It helps you build a website from scratch, backed by powerful tools to find customers, create sales, and manage the business.With Shopify’s latest technologies used in its Point of Sale technology, selling products to anyone and shipping to any location is easier than ever.Shopify is spread across 175 countries worldwide and has garnered a business of $200 billion, making it very profitable for small-scale and independent business owners to make profits using its platform.Business owners and companies can easily manage orders, shipping, and other services from any location by using just one dashboard. Pricing is also managed from the same dashboard, making it a one-stop-shop solution.Great customer support is provided by Shopify 24 hours a day, all seven days of a week.Its powerful platform provides much-needed insights into the business, which is fully managed by Shopify Fulfillment. JD Source JD's B2C operation and logistics infrastructure are renowned. Approximately 1,300 warehouses spanning roughly 23 million square meters comprised the company's network as of September 30, 2021. The company is not only a competitor to Amazon but also Alibaba.com, as both of them offer bulk purchase options. It is the largest online retailer in China by revenue. What are the Various Challenges of Using Fulfillment by Amazon? Fees Charged by Amazon FBA The cost of Amazon storage fees can add up if your inventory doesn't sell as quickly as you would like. To minimize storage fees, you should ensure your stock moves quickly, and you are generating sales, so you don't need to worry about additional fees. This is one of the major challenges of using FBA. Amazon has revised their prices, effective from 10th May 2023, which has resulted in a marginal increase in their prices and has put undue pressure on sellers who rely on FBA for their fulfillment services. There is now an 18% increase in Pick Pack Fees, a 25% increase in Closing Fees, and a 25% increase in weight handling fees. Read more about the updated fee structure. Labeling Amazon will give you access to their guidelines on preparing and shipping your items once you register for Amazon FBA. The guidelines are very strict, and if the inventory is not properly labeled, it will be rejected by the warehouse. This can cause delays and frustration, besides extra work. Instructions are to be followed carefully. Product Packaging Has the Amazon Logo and Not Your Brand’s Amazon FBA dispatches all orders using their own packaging. So, when your customers receive their order, the packaging will sport Amazon's branding, making it harder for you to build your unique reputation through brand awareness since your brand is not visible on the packaging. Therefore, if brand awareness is a crucial factor for you, you may not benefit greatly from FBA. An Increase in Returns after Using FBA Since Amazon's returns policy is so easy, there is the possibility of receiving a higher number of returns from customers once you use Amazon FBA. However, you can minimize this risk by always supplying quality products. Sales Tax Issues Using a fulfillment service like FBA makes calculating sales tax even more difficult. When items are sold and shipped directly, calculating sales tax becomes interesting enough. But with FBA, product items are manufactured, shipped, and sold in different regions, resulting in further complications in tax issues. Inventory Management You, as the seller, are responsible for keeping track of your FBA inventory and ensuring that it is restocked as needed. If you don't do this properly, you risk accepting orders that can't be fulfilled because the items aren't in stock. Amazon Fee Structure Amazon will deduct all fees owed to them before paying you, so you cannot use the next sale to pay for the last one. That means a seller will require a credit card to pay off all fees owed to Amazon, and these fees cannot be carried forward. Product Handling Issues You may lose or damage inventory in the fulfillment process, and most often, Amazon is the one who made the error, not you, the seller. In these cases, Amazon will reimburse you. Nevertheless, some cases might go unnoticed, and sellers' money is lost due to damaged inventory. Thus, sellers should keep shipping records in case Amazon short-delivers inventory. Complicated Calculations Involved In addition to the FBA calculator, Amazon offers a chart for its fulfillment fees for FBA sellers. A chart for fulfillment fees can be found on Amazon's website along with its FBA calculator, which allows you to decide if an item is profitable enough to sell on FBA or if you should use another method. This requires foresight and a lot of calculations. Not every seller is well-versed in these complicated calculations. Strict Guidelines The Amazon fulfillment centers have specific requirements for certain products (i.e., poly-bagging and bubble-wrapping) to ensure that inventory is in good shape. A per-item fee can also be charged for Amazon to handle the preparation for sellers. Stickerless Merging of Similar Products Amazon's default inventory setting collects the same products from a manufacturer at the same time, so if a seller sells the same product as another seller or retailer, the inventories will be mixed. This leads to low-quality products from different sellers mixing with superior-quality products, leading to fraud and account suspensions. You must be aware of this as a seller. You can also read different alternatives to Amazon FBA. Conclusion: Why is WareIQ a Better Option than Fulfillment by Amazon in 2023? There are many ways in which Amazon FBA can benefit your online business without having to invest in expensive storage facilities and staff. However, these services can end up being quite expensive and may not offer the exact services that you are looking for. A company like WareIQ offers the same services as FBA, and much more, while also being flexible by giving customers a choice as to which services they need and allowing them to opt for those specific services only. In addition, we offer integrations with a multitude of the biggest eCommerce platforms such as Shopify. WareIQ's prices for similar services are cheaper and more transparent than Fulfillment-by-Amazon with a negligible amount of hidden expenses. We utilise local resources which help to keep costs down. WareIQ offers flexible solutions to labeling. You can either opt for your own custom packaging and labeling to increase awareness of your own brand or you can opt for our standardised packaging, which is well-designed and will make your product stand out from the crowd. All in all, it is a win-win. You can opt for our entire suite of fulfillment services which includes inventory management. If you do, you will not need to bother about the hassle to maintain your inventory levels and keep track of what needs to be restocked as our custom management software will take care of everything. 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”. We also offer multiple services relating to the preparation of inventory to meet Fulfillment by Amazon requirements such as: Pick & Pack by WareIQ: WareIQ's fully automated order fulfillment system guarantees efficient and accurate picking & packing and also has the capacity to fulfill 1 to 10,000+ orders each day. In addition to this, you are only chargeable for the services that you use. So if you ship only 1 order a day, you will only pay a pick & pack charge for that 1 order. Amazon Product Compliance with WareIQ: Amazon has very strict guidelines that retailers need to comply with in order to avoid refusal, disposal, or return of inventory, and charges for noncompliance at the fulfillment center. WareIQ offers services such as repacking and labeling, to make sure that your products abide by all these regulations before it is sent to an Amazon fulfillment center. Smart Tech by WareIQ: WareIQ’s smart technology ensures maximum efficiency by offering API integrations, automated mapping of SKUs across multiple sales platforms, and the ability to bundle products without the requirement of tracking, regulating inventory levels, or handling fulfillment. Hub & Spoke Transport by WareIQ: This important process involves the streamlining of the entire supply chain and results in the reduction of costs, across the entire process. Our most utilized service is the transport of inventory to our warehouse, relabelling of the product, and reorganizing it for delivery to multiple locations. We also take advantage of shipping discounts through consolidations and deconsolidations to ensure a seamless shipping experience. Fulfillment by Amazon FAQs (Frequently Asked Questions) What does Amazon Fulfillment do?FBA (Fulfillment by Amazon) is a service that allows businesses to use Amazon's logistics network to help them grow their business. They send products to Amazon fulfillment centers, and after a customer buys the product online, the amazon fulfillment center manages receiving, packing, shipping, customer care, and returns for those orders. FBA vs. FBM: What's the Difference?In FBA i.e. Fulfillment by Amazon, the sellers send their inventory to Amazon warehouse and it is stored in the amazon fulfillment center and then amazon fulfillment center picks and pack, ship, and ensure customer satisfaction for these products. In FBM i.e. Fulfillment by Merchant of Amazon Merchant Fulfillment Network, sellers have control over their customer’s experience. Basically, sellers list their products on Amazon and choose to ship products to each buyer by themselves and not by Amazon. The sellers are responsible for fulfilling their orders. Read here for more on FBA vs FBM. Is it possible to do both FBA and FBM?Absolutely Yes! It is best to generate profits and grow your business. Who is an Amazon FBA Seller? An FBA seller is an e-commerce business that sells in Amazon's stores and uses the FBA program to outsource inventory management to Amazon. For order fulfillment, the vendor sends the products to Amazon warehouses. What is the cost of FBA per item?In FBA fees or the cost of FBA, Fulfillment fees, and storage fees are included. So for each item, the cost is different. It can be calculated using an FBA calculator. What are the steps taken to sell using Fulfillment by Amazon (FBA)?Step 1: Create your Professional seller accountStep 1: Create your product listingsStep 1: Prepare your productsStep 1: Ship your products to Amazon How do I open Amazon Fulfillment Center?Before opening an Amazon fulfillment center make sure to do your research and if you think it is worth then this is how the process follows; • Search for items you want to sell• Sign up for an Amazon Selling account• Add product listings to your website• Make sure you have your complete inventory • The payment, shipment, and customer returns are handled by Amazon• You get paid for your items according to Amazon policy Is fulfillment by Amazon the same as sold by amazon?No, they are definitely not the same. What is the return policy of Amazon FBA?For FBA retailers and merchants, amazon manages fulfillment and customer service, including returns from customers. Customers can return their new purchases within 30 days if they meet Amazon's eligibility requirements, which is the same as Amazon's return policy. The main control is under Amazon and sellers have limited control over the returns.
April 27, 2022
10 Best Reverse Logistics Companies for Efficient Returns Management in eCommerce in India in 2023
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 2023
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 2023? 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 2023? 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 2023? 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
What is Fulfillment Status? A Comprehensive Guide in 2023
Each process has a result that matters the most. While an end-user may only think about the final outcome, the result can vary if all the steps in a process are not executed well. Fulfillment status is the fulfillment of a promise made to the end consumer that matters. Similarly, every order that a customer confirms has a lifecycle: order placement processingfulfillment When the number of orders per day increases from a few hundred to thousands and then lakhs, it tends to become cumbersome for the business to manage all these orders by themselves. The completion of the fulfillment lifecycle determines the success of every order. When a customer places an order on a website, both the customer and the service provider keep an eye on the status of the consignment to know if it has been fulfilled yet. But what does order fulfillment status mean? Let's take a look. What is Fulfillment Status? Order fulfillment status refers to an order's completion level in relation to the processes of the order lifecycle with the final goal being delivery to the end customer. The fulfillment status of a shipment highlights the stage of the order after the payment gets processed until delivery to the end customer. It depends on the activities of the service provider. It reveals whether the order gets processed correctly and when it can be shipped to the customer. What are the different stages of Fulfillment Status? An order's Fulfillment Status is categorized into six stages as per its readiness to be shipped: Fulfilled: Delivering a complete shipment deserves the status of a fulfilled order. This status does not wait for or depend on the customer accepting or returning the final product. Unfulfilled: A freshly placed order is described as unfulfilled until it is delivered to the customer, or the order query has been closed due to another reason like a return, refund, or decline by the seller. The order stays unfulfilled until the ordered inventory has been picked. Partially Fulfilled: When only some parts of a shipment get transported, it ranks as a partially fulfilled shipment. For example, this can happen when the customer orders multiple items in one shipment and not all are readily available at the time of processing. For the items pending delivery, either a refund gets processed, or they are queued for delivery later. In each case, the customer receives a notification via their preferred mode of communication; text, call or email. Queued Shipment: This is the penultimate stage before the order reaches the customer. This is the stage after the inventory has been picked, processed, and packaged, and the final product is ready for delivery. Then, it just needs a pick up by the delivery personnel and transportation. The customer gets a notification via written communication and a tracking number is assigned the moment the order leaves the service provider's premises. On Hold: The shipment status goes on hold when the customer has added goods to the cart but has not confirmed the order or made the payment yet. The service provider can locate the inventory but cannot begin processing until they receive a confirmed order from the customer. The status changes to unfulfilled when the order is confirmed, which the service provider can then undertake. Scheduled: This status primarily applies to prepaid shipments before their fulfillment date is reached. Their fulfillment date as per the subscription then changes to unfulfilled. The service provider can then begin the process of completing the order. [contactus_lilgoodness] What is the Difference Between Order Status and Fulfillment Status? [table id=12 /] Depending on the stage the customer is at, the status of an order can range from Open, Archived to Cancelled. Open Order: When the customer is surfing and has not placed the order yet, the status stays open until order confirmation or payment. Archived Order: An order goes into the archive when it gets canceled, needs a refund, or faces any other issue. Orders can be manually or automatically archived for viewing after being attended to. Both the customer and the service provider can archive it. It does not mean it gets deleted; instead stored in records away from the sight of the order page. Cancelled Order: As the name suggests, the order status appears as 'Cancelled' when the customer withdraws it. Yet, an order is not fulfilled if a refund is pending for the customer. 6 Step Processes Involved in Order Fulfillment Status in 2023 Source Receipt of Inventory Fulfillment status begins with locating the inventory in the warehouse or a storage unit and retrieving it for assembly as per the customer's order details. Before processing the final product, the service provider needs to ensure that each piece of the inventory is of desired quality and is not damaged. Then SKU labels and barcodes are put on each piece before reading them for pick up. Order Picking The inventory identified needs to be picked from the warehouse or any off-site location. It helps if the inventory is organised as per their urgency. For instance, the items in frequent demand can be placed upfront, followed by less-required products. The company's staff or a 3PL fulfillment company can pick up the shipment. At times, the dropshipping method is also used. This is where the manufacturer directly processes and ships the finished product to the customer. As a result, the service provider does not need to host the inventory or finished product; instead, it is sent directly from the seller to the buyer. In case of an unfulfilled order, the inventory can be picked through single-order, batch, cluster or zone picking. in Batch Order Picking, workers pick up inventory individually according to a batch or group of multiple orders. In Single-Order Picking, they pick up the stock as per the individual order received. In Zone Picking, they retrieve the inventory as per the geographical zone or area. And in Cluster Picking, the pickers gather the inventory from various SKUs and multiple orders rather than concentrating on just one. In another mode called Pick and Pass, the warehouse is categorised into different areas as per the inventory stored. Pickers get positioned in every designated area and then manually pick the required inventory and pass it over. Processing The next stage is making the finished goods ready for the customer. It requires excellent integration between the service provider and customer interfaces for a seamless flow of information from the order to the fulfillment stage. This system needs to prompt the warehouse staff about the inventory required when a customer places an order. Processing includes identifying the inventory required for putting together the final product and locating them in a warehouse or storage unit. Packaging The order must be packed well to prevent damage during transit before being sent for weighing and labeling. Efficiency and transparency are essential in this stage. That is why many companies offer customisations such as automated fulfillment services as per the needs of the service provider and their customers. Because of these features, orders will be packaged with efficiency regardless of the volume. The packers must observe and try to get the lowest possible dimensional surface area while packing a shipment to be able to place more orders inside the truck. This helps in reducing transportation costs and saves time. Shipping and Delivery This is the last stage where the product is in the hands of the service provider. The package gets weighed, labelled, documented, and is ready to get shipped to the customer. The service provider needs to select the fastest and most secure way to deliver the order. The nitty-gritty of the eCommerce shipping method depends on the type of product getting transported. For instance, a perishable product must be despatched with a coolant. In contrast, a fragile product will need proper bubble wrapping. An order is said to be fulfilled when the end customer receives it along with a written confirmation via a preferred mode like email or text. After the delivery, the service provider must seek the customer's written feedback about the whole experience, from browsing to ordering, receiving and using the product. Statistics say that 73.6% of customers believe that delivery is the key to a seamless shopping experience. Returns Suppose a customer doesn't like the product and intends to return it. In that case, the order remains incomplete until returned to the service provider. As mentioned above, including return labels in the shipment saves time for both the user and the service provider and gets brownie points for the latter. Once returned, the item needs a thorough check for damage before returning to the inventory and processing the refund. The service providers still need to stay in touch with the customer for feedback and to encourage future purchases. What are the Benefits of Fulfillment Status? Given below are some of the benefits of order fulfillment Status that service providers cannot ignore: Being a source of Information Information, especially through eCommerce logistics companies, drives all decisions, and fulfillment status provides it in abundance. Customers invest their time and money in the overall delivery experience. 75% of them expect information on the processing of their order. In comparison, 51% of customers wish to receive real-time visibility into their shipment progress. Fulfillment Status does that on behalf of the service provider. Therefore, keeping the end customers informed of their order progress is critical to being successful and encouraging repeat purchases for service providers. Maintaining Order Accuracy This is crucial for both parties. Order fulfillment Status highlights the details of a shipment for scrutiny. Most customers lose faith in a service provider due to wrong orders being delivered. The top reasons for order returns are damaged goods (22%), different looks as compared to online pictures (22%), and receipt of a wrong item (23%). Whether for checking the availability of raw materials, tools for warehouse allocation, or checking processing timings, fulfillment status assists service providers in managing their inventory. Inventory Management Multi-channel selling has raised the need for comprehensive inventory management, which enhances the service provider's reach in a shorter time period. Its tech platform leverages real-time data to facilitate the service provider to predict the future demand for a product. The first and most significant step in successful order fulfillment is receiving and sorting the inventory as per the order. In other words, Order fulfillment status means supplying the service provider with good visibility of the inventory. Customer Satisfaction Leading to Customer Referrals Besides the 3 points above, companies have another primary reason for investing in fulfillment status; the higher the success rate of their order fulfillment, the better their reputation, which profoundly influences their sales figures. New customers rely on a company's ratings before selecting their service. Existing customers would not reinvest unless they had a good experience earlier. How is Order Fulfillment Status Tracked? One can track an order fulfillment status in two ways: before and after the order is fulfilled. Here's how tracking happens. Each status can be tracked by adding a tracking number to the order and displaying real-time fulfillment or shipping details for the customer's order. Customers receive this tracking number at the time of order confirmation so they can check the fulfillment status whenever they want. Before Fulfillment We have discussed the pre-fulfillment process that involves steps like receiving inventory to shipping or delivery and, approximately 30% of the time, returns. Tracking an order status will yield one of the below results if done before fulfillment: Pending: This indicates that the customer did not complete the order.Awaiting Payment: This indicates that the customer did not proceed to payment after adding items to the cart.Awaiting Fulfillment: Awaiting fulfillment indicates that the customer has confirmed the order from their end, and it is the service provider's turn.To be Shipped: This indicates that the order has been packaged and waiting to be shipped to the customer.To be Picked-up: This tracking status appears when the customer needs to pick up the order from a pick-up outlet.Partially Shipped: This indicates only a portion of the order has been shipped.Shipped: This indicates that the completed order has been sent.Partial Refund Generated: This indicates that the refund requested by the customer has been partially generated.Complaint Received/Disputed Order: This indicates that the customer has filed a complaint or raised an issue in relation to the order or delivery. After Fulfillment After fulfillment, tracking will yield one of the below results: Delivered: This indicates that the complete shipment has been successfully delivered to the customer.Canceled: This indicates that the customer has cancelled the order. Returned: This indicates that the order has been returned as per the customer's request.Refunded: This indicates that the amount paid towards the shipment by the customer has been fully repaid.Declined: This indicates that the seller has rejected the order. Conclusion The success of the supply chain, especially in retail, depends on order completion. While fulfillment strategies have always retained the power to disrupt a supply chain, they have managed to arrive at the heart of customer experience in the past decade. A good platform for integrating the fulfillment center's and user's experience can profoundly affect a company's Order Fulfilment success. Having a robust system in place that makes the task easier at every stage of the fulfillment cycle is critical. Many companies employ excellent ERP software that integrates well with suppliers, vendors, and customer interfaces. Such a system helps accurately predict customer demand and optimise inventory, human resources, and finances. This is where WareIQ can help. WareIQ, a Y-combinator backed startup, has rapidly grown to be the leading provider of full-stack eCommerce fulfillment services for 300+ reputed eCommerce & D2C brands in India. WareIQ allows you to reach a larger audience in a shorter period of time with storage facilities spread across India and closer to your demand centers. Our smart inventory placement ensures that your demand centers are well-stocked and enables efficient & prompt delivery. We help you evolve from a 5-15 day delivery system to the same day and next day Amazon-like delivery system and are already helping 100+ other brands in India to do so. 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. 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 fulfillment platform enables eCommerce players to provide a superior post-purchase experience to their customers through an app store that has various apps like branded tracking, post-ship badges, RTO shield, etc. 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] Fulfillment Status FAQs (Frequently Asked Questions) What are the different levels of fulfillment?• Fulfilled• Unfulfilled • Partially Fulfilled• Queued Shipment • Placed on hold • Scheduled Does fulfillment status mean the product is delivered?No, they are not the same. Fulfillment status is basically order status that states whether an order is processed or not or currently awaits shipment. What does "order is in fulfillment" mean?If your order is marked as "in fulfillment," it has most likely been processed and is being prepared for shipment. After fulfillment is complete, order is delivered to the customer. What is "unfulfilled status"?"Unfulfilled" indicates that it has not yet shipped. You'll receive a confirmation email with a tracking number once your order has been sent, and your order status will change to "Fulfilled." What does ‘’awaiting fulfillment’’ status mean?If the status of your order indicates "awaiting fulfillment," it simply implies that the logistics warehouse has not yet begun the order fulfillment process. Picking the products for your order and packaging them into a box for shipment is part of this process. Does WareIQ share complete fulfillment status updates?Yes, WareIQ has its own order tracking system that notifies the end customers of the fulfillment status updates real-time via mail, messages, whatsapp etc. Apart from this, WareIQ also has a branded tracking app exclusively for its eCommerce clients.
April 19, 2022
Detailed Guide on Micro Fulfillment Center: Meaning, Top Benefits & Challenges with Micro Fulfillment Centers and How Can They Enhance Retail Efficiency in 2023
In this day and age, where consumers are used to ordering most of their requirements online, a delay in them receiving that order could have dire consequences for the seller. With so much competition in every sector, businesses are pining for getting their products to their customers at a faster rate than their competitors. To accomplish this goal, businesses and online retailers have had to adopt new strategies to ensure that they don’t fall behind. This is why micro fulfillment centers are important as they can bridge the gap between where the order is being shipped from and the customer's doorstep. Read further to understand all the nuances of micro fulfillment, in more detail. What is Micro Fulfillment? Micro fulfillment is a strategy adopted by companies/eCommerce sellers where the fulfillment cycle is made more efficient by setting up small-scale ecommerce warehouses or storage facilities near densely populated areas, thus reducing the time taken from placing the order to delivering it. In this age of consumerism, where same-day delivery has become a norm in some locations, companies such as Amazon, Flipkart, Big Basket, and other eCommerce/retail companies are finding solutions on how to uphold customer expectations, while at the same time, figuring out how to maximize on their own profit margins. This is where micro fulfillment is the solution. Last-mile delivery incurs the most costs among the different stages of delivery, and is estimated to be between 40-50% of the entire supply chain cost. With the inclusion of micro fulfillment, this cost can be minimised as it reduces the shipping costs from regional/central distribution centers to the local distribution center. [contactus_uth] What is a Micro Fulfillment Center? Micro fulfillment centers are small, fully or semi-automated fulfillment centers situated in close proximity to the end customer and generally covers an area between 3,000 to 10,000 sq. ft. They center can be part of a larger warehouse or can exist as a standalone unit as well. They are also known as dark stores, where the order processing and packing is fully automated with minimal human interaction. A micro fulfillment center usually has limited inventory, lasting for 24-72 hours, and acts as a base for express delivery for products within a certain pin code or geographical location. To state an example, Flipkart may have a large warehouse in Binola, Haryana of 13 lakh sq. ft., but in order to fulfil express delivery for Saket, it can set up a micro fulfillment center in Saket of just 500 sq. ft., and thus cut down on the 1.5 hours of travel time. This will ensure that same-day delivery can be easily met for those end-users in South Delhi and offers an enhanced customer experience for the end-user. How can Micro Fulfillment Centers Boost Retail Efficiency in 2023? With the advent of hyperlocal delivery ecosystems, the aim is to increase efficiency to match the needs and expectations of the end customer. Still, despite automated warehouses and large fulfillment centers, with the latest implementations of picking and sorting technologies, the required efficiency is difficult to achieve. This is where micro fulfillment centers step in. eCommerce companies will find a boost in retail efficiency post the implementation of micro fulfilment centers due to the following reasons: Improved analytics Companies will gain deeper insights into the purchase patterns of customers within a pin code or a smaller geographical location. Thus, the inventory stored will be more precisely suited to the user's needs and will involve faster order pickups as well as cost-saving from unused inventory. Faster fulfillment Even in a semi-automated state, they help reduce the fulfillment cycle duration because the orders have to be picked from a smaller area and can be done with higher accuracy. The order pick up process reduces from 60 minutes in regional distribution centers to just 6 minutes in micro fulfillment centers. Faster delivery With last-mile delivery carving out a significant portion of an eCommerce company’s revenue, they reduce the delivery time and thus aid in cost-saving. Ease of integration They are much smaller in size, aid in the company’s expansion as they can help reach a larger area and are also much easier to integrate into the existing system of the company’s supply chain. 5 Benefits of Micro Fulfillment Centers vs. Traditional Fulfillment Centers As per the real estate firm CBRE, it was seen that for an eCommerce player to earn $1 billion in sales, it requires 1.25 million sq. ft. of storage space. This added to the fact that the majority of players are aiming for a faster fulfillment cycle, shows that micro fulfillment centers provide a solution to the needs of eCommerce players. Micro fulfillment centers prove how useful they are as compared to traditional fulfillment centers in the following ways: Highly responsive to changes in customer demands When the lockdown struck and customers’ demands changed from clothing to groceries, micro fulfillment centers could have adapted to the change in the demands much faster by making space for grocery items and replacing other products. This rapid deployment and shift in resources cannot be matched by a traditional fulfillment center. More customizable products With better insights into the customers’ demands in a certain area, micro fulfillment can stock up on the required inventory that the customers in that area need, and this leads to an optimised, faster and more efficient fulfillment cycle. Improved quality control With a lower order density, it is much easier to ensure that the products being shipped are of the quality demanded and to the correct addresses. Faster delivery time It is common to see commercial vehicles waiting to enter the city limits and ending up in long traffic jams at the city borders. This hassle is saved by micro fulfillment centers being set up close to the end-user, thus reducing the distance and ensuring extremely fast deliveries. Lower operational and set-up costs Micro fulfillment centers take much less time to be set up and the operational costs are lower than traditional fulfillment centers, thus increasing the company’s profits. What are the Best Practices in Micro Fulfillment? Micro fulfillment is a relatively new practice. Thus, eCommerce and other fulfillment companies are striving to ensure that they can fine-tune this to the best of their abilities. The following are some of the best practices that are being followed universally by most, if not all, eCommerce companies: Inventory: Establishing an inventory management system based on the business model, and thus ensuring that the micro fulfillment center is not under or overstocked is essential. Inventory issues can cause a bullwhip effect going back up to the main distribution center as well.Integration with existing systems: Ensuring the software system for handling the micro fulfillment center can be integrated with that of the distribution center’s Warehouse Management Software and/or the Order Management System and e-commerce platforms, to improve visibility and control over operations.Property Selection: Whether it is building a new store or renovating an existing property, the geographical location and ease of approach must be considered. A cheaper location but with an interrupted power supply will, in the long run, prove to be costlier than a location that might be more expensive but with better civic amenities available. 5 Main Challenges with Micro Fulfillment Centers Micro fulfillment is a solution that can revolutionise the eCommerce industry, but for all the promise and excitement, it must be taken with a pinch of salt. Players, new and old, when expanding using the micro fulfillment route, must keep in point the following challenges and be prepared with contingencies for them: Constant inventory replenishment Be it using the Milk-run route or the EOQ model, micro fulfillment centers, due to their smaller size, will require their inventory to be replenished often, and this means a proactive inventory replenishment system must be in place to handle this. Consumer unpredictability A limited storage capacity can sometimes make it difficult to quickly adapt to a certain trend. For example, an influencer posting about a certain product leads to an overnight trend, and this may lead to unfulfilled orders. Risk of stockouts With a limited inventory of certain SKUs, there is a risk of some products/SKUs facing stockouts during unpredictable high demand changes. Not suitable for all products/SKUs They are not suitable for some larger products which cover more area, and given the limited space available, it will be a choice between which SKU to sacrifice. Order consolidation Customers order multiple grocery items simultaneously and expect all the items to be delivered together. But at the micro fulfillment center, if even a single item is out of stock, it can lead to a delay in the delivery or cancellation of the product by the retailer’s end, both leading to depleted customer satisfaction and mistrust of this system. Source Top 8 Micro Fulfillment Companies in India  Micro fulfillment in India is followed using a relatively hybrid marketplace concept. The FMCG sector in India is vastly unorganized, with close to 95% being unorganized. So, rather than only setting up dedicated micro fulfillment centers, many 3PL, eCommerce and fulfillment companies are using the already established infrastructure of these stores as micro fulfillment centers while also setting up their own micro fulfillment centers. While completely automated micro fulfillment centers have not been set up in India yet, many companies dealing in the hyperlocal delivery industry are using this hybrid model of using the existing Kirana stores as micro fulfillment centers. Below are some of the leading micro fulfillment companies: WareIQFlipkartDunzoSwiggyGrofers/BlinkitBig BasketOla DashShadowfax WareIQ Source WareIQ is a category defining, best- in class full-stack eCommerce fulfillment tech platform (with inbuilt inventory planning, order management & shipping system) for modern brands to accelerate online sales/ expedite revenue growth & profits with same/next day delivery. We not only help you reduce your logistic costs but also your delivery timelines – this could be the game-changer your business needs! WareIQ offers centralised tech platform for your entire eCommerce operations ML-based prediction engine for efficient warehouse network design & smart inventory placementCentralised platform for core fulfilment & shipping operationsPost-shipping apps for a delightful experience & zero to minimum supply chain leakages Today, over 300 brands have taken charge of their ecommerce logistics & fulfilment with WareIQ to unlock tremendous value in terms of revenue and customer satisfaction. WareIQ Rush is their same-day-delivery platform. Using this platform, WareIQ is aiming to help online sellers offer same day delivery in every major metropolis in India, with a plus 99% fulfillment rate. Sign Up Now with WareIQ RUSH to avail our superior fulfilment tech platform & enhance your online business growth. Flipkart Source One of the original players to bring about this hybrid concept of using Kirana stores as a micro fulfillment centers, this eCommerce giant has opened up micro fulfillment centers and launched the “Flipkart Quick” service to deliver close to 2000 products ranging from grocery to electronics such as smartphones. It now uses its vast network of micro fulfillment centers to provide grocery services across 1800 cities, 23 states, and 10,000 pin codes in India. Dunzo Source Established in 2014, this hyperlocal delivery system caters to 7 cities. Seeing the changing consumer demand due to the lockdown, Dunzo plans to open 300 micro fulfillment centers across 20 cities and keep the top 2,000 SKUs in each center. Their main goal is to provide delivery in under 19 minutes, in every corner of the country. Swiggy Source Swiggy’s Instamart is now available across 18 cities and has achieved the 15-minute delivery service level by opening up multiple micro fulfillment centers in partnership with local Kirana stores. The potential of this service can be realised by understanding Swiggy’s decision to invest $700 million into establishing a micro fulfillment center for hyperlocal deliveries. Grofers/Blinkit Source Grofers, now rebranded as Blinkit, one of the country’s earliest hyperlocal grocery delivery companies, is opening 1000 micro fulfillment centers across India and providing a 15-minute grocery delivery service. With the onset of services like Swiggy Insatmart and Dunzo, Grofers is trying to claim the mantel of India's leading online grocery platform. Big Basket Source Big Basket, with its BB Daily and BB Instant services, provides hyperlocal delivery services by being able to deliver around 90% of the items within two hours. Big Basket was amongst the earliest adopters of the micro fulfillment service. It presently has ten micro fulfillment centers in each metro city and one each in 50 smaller cities. Ola Dash Source Ola is known for its cab service but its up-and-coming same-day-delivery eCommerce service called Ola Dash, is seeking to up the ante by opening up to 500 micro fulfillment centers across 20 Indian cities. Ola Dash is presently providing a 10 minutes “Store to Door” delivery service across nine cities and across 2,500 SKUs and the micro fulfillment platform is set to expand upon that. Ola is hoping to make a name for itself in the eCommerce space. Shadowfax Source This logistics company provides same-day delivery and courier services and is now being used by retailers to fulfil their online orders. With Shadowfax’s micro fulfillment centers which are actually their delivery and sorting hubs, they provide hyperlocal delivery of products such as groceries and medicines, in a very short amount of time to their customers doorsteps. Conclusion: How You Can Utilize Micro Fulfillment Centers of WareIQ to Offer Same Day Delivery to Customers The Indian eCommerce industry is rapidly progressing towards the hyperlocal fulfillment sector. Zomato recently announced their decision to enter this sector as well, and with multiple other startups also aiming to provide the “10-minute” delivery service, the way forward is through micro fulfillment centers only. As the pandemic restrictions slacken and people are returning back to the offices, the hassles of coming home and buying groceries will return once again too. This will lead to an increase in the demand for hyperlocal delivery services, and subsequently, the need for micro fulfillment centers across metros and even smaller cities in the country. One such company seeking to provide same-day delivery services is WareIQ through their WareIQ RUSH platform. 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 empowered brands to sell more, sell faster & sell everywhere due to: 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 fulfilment tech companies in the world that have same-day delivery service for their customers under their product “WareIQ RUSH”. With world-class WMS functionalities, WareIQ handles the entire range of intricate operations in the eCommerce fulfilment process, ranging from Inbound Operations such as scanning and quality check, through 100% accurate Pick and Pack, to Inventory Management across all channels. WareIQ’s next day delivery and same-day delivery services are helping eCommerce businesses set new standards with respect to setting customer expectations and marketplace 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. [signup] Micro Fulfillment Center FAQs (Frequently Asked Questions) What is the process of micro-fulfillment?Micro-fulfillment is a strategy for improving delivery times by locating small-scale warehousing operations in highly populated urban areas. Does WareIQ provide micro fulfillment services or have micro fulfillment centers?Yes, WareIQ provides micro fulfillment and has dozens of micro fulfillment centers & dark stores across the country which helps in uniform distribution of inventory across India closer to the customers. How much does a micro fulfillment center cost?To fulfill orders through micro fulfillment centers, it costs around 5$ per order. What is the drawback of micro warehousing and micro fulfillment center?• Requires constant inventory replenishment• Depends on irregular consumer demands• Increased risk of stockouts• Depends on customer locations• Not feasible for all SKU types Is micro fulfillment part of last-mile delivery service?Micro fulfillment warehouse is an integral part of last-mile delivery service because it is generally the last node before the order gets delivered to the end customer. Is micro warehousing the future of eCommerce?Certainly yes, because same day and next day delivery at a minimal cost is the future of ecommerce and micro warehousing will play a vital role in the same. Is micro-fulfillment the next big thing for retailers in malls and restaurants?Micro-Fulfillment is absolutely the next big thing for Mall Retailers, and Restaurants. E-commerce companies and merchants can benefit from micro-fulfillment centers to strengthen their fulfillment strategies. Because they are closer to their clients, they can minimize lead times and turnaround times, allowing them to meet increasing Service Level Agreements.
April 13, 2022