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How to Improve Regional Utilization and Optimise Demand-Based Inventory Distribution in 2024 for Faster eCommerce Fulfillment with Accuracy & Lower Inventory Holding Costs?

Published on June 29, 2022

Last updated on February 1, 2024 • 10 min read

Brands must provide faster deliveries and effective order fulfillment as competition in the eCommerce sector heats up. It is essential to be able to predict demand effectively and keep inventory levels in line with consumer demands.

The amount of time it takes an eCommerce business to deliver an item to a customer’s door has a significant impact on how customers perceive a brand. It is essential for both small and large businesses to fulfill orders quickly and accurately if they want to grow their eCommerce consumer base. Smaller brands must increase their consumer base through flawless order fulfillment while larger companies and international brands must preserve their brand reputation and existing customer base.

To make delivery quicker and more cost-effective, eCommerce businesses are practising regional utilization. Optimizing regional utilization can help ecommerce businesses reduce shipping costs, improve delivery times, and increase customer satisfaction. It can also help businesses better manage their inventory and reduce the risk of stock-outs or overstocking. Let us get a better understanding through this article.

Table Of Contents
  1. What is Regional Utilization?
  2. How to Calculate Regional Utilization?
  3. Why Should an eCommerce Business Figure Out Their Regional Utilization?
  4. 7 Ways to Improve Regional Utilization & Optimise Demand-Based Inventory Distribution in 2024
  5. Conclusion: How to Optimise Inventory Distribution and Regional Utilization with WareIQ for Faster Order Fulfillment?
  6. Regional Utilization: FAQs

What is Regional Utilization?

Regional utilization (RU) is an eCommerce calculation term which reflects the percentage of local and zonal order fulfillments out of the overall order fulfilment. It is a measure of how well the fulfillment center is able to meet the demand for orders within a specific geographic area.

Giant eCommerce players consider regional utilization (RU) as a significant factor in determining the seller account status. Electronic brands and sellers often prepare their stock for some of the most awaited eCommerce season sales like Amazon’s Great Indian Festival or Flipkart’s Big Billion Day. Regional utilization (RU) ensures faster delivery and reduces additional logistic costs.

WareIQ – Amazon-prime Like Logistics for Modern Brands in India

WareIQ, an eCommerce fulfillment company, empowers online brands with a superior-tech platform to compete with Amazon like service levels by bringing their average delivery timelines from 5-10 days to 1-2 days.

"With WareIQ’s full stack digital enabled fulfillment solution, we got access to the pan India network of fulfillment centers & cold storage facilities enabling same/next day delivery, without any upfront investment in supply chain infrastructure from our end. During the IPL campaign in April 2022, WareIQ efficiently handled unpredictable 200x surges in daily order volumes of ~20k/day with a 99% fulfillment rate. With WareIQ as our preferred fulfillment partner, we witnessed 172% growth in online order volume in just 4 months, with a significant improvement in the overall customer experience in fulfillment."
- Damanbir Singh, Product & Operations Head, Lil’Goodness

How to Calculate Regional Utilization?

To calculate regional utilization, you will need to gather data on the volume of orders being placed in a specific region and the efficiency of your fulfillment center in servicing those orders. Here is an example of how you could calculate regional utilization:

  1. Gather data on the volume of orders being placed in the region. This might include the number of orders placed per day, week, or month and the average order size.
  2. Gather data on the efficiency of your fulfillment center in servicing those orders. This might include the number of orders being fulfilled per day, week, or month, as well as the average time it takes to fulfill an order.
  3. Calculate the regional utilization rate by dividing the number of orders fulfilled by the fulfillment center by the total volume of orders placed in the region.

For example, if your fulfillment center is fulfilling 1,000 orders per month in a specific region, and the total volume of orders placed in that region is 2,000 per month, your regional utilization rate would be 50%. This means that your fulfillment center is fulfilling half of the orders placed in the region.

The following illustration shows the regional utilization (RU) formula:

regional utilization_formula

Let’s see, with the help of an example, how regional utilization (RU) is calculated.

Suppose you have 10 fulfillment centers across India and the following factors are at play:

You received 25 total orders in the month of July, 5 from New Delhi, 5 from Mumbai, 5 from Bangalore, 5 from Pune and 5 from Chennai. Out of 25, you managed to fulfill 15 orders locally.

Therefore, your regional utilization (RU) = 10/25 X 100 = 60%

Why Should an eCommerce Business Figure Out Their Regional Utilization?

Businesses calculate regional utilization (RU) for a variety of reasons, including:

To Get Faster Order Fulfillment

When inventory is stored in close proximity to your customers, their orders can be fulfilled at a faster rate due to the less amount of distance that needs to be traversed and less time needed to travel that shorter distance. For instance, if your company has fulfillment centers located in Mumbai and Pune and you get the majority of your orders from those 2 cities, fulfilling orders will be much faster than if your fulfillment center was located in Nashik.‍

To Achieve a Lower Amount of Returns

If there is an unforeseen delay in the fulfillment of an order or delivery timelines are generally longer due to the physical distance between the fulfillment center and the customer, there is a higher chance of customers initiating a return. When businesses take advantage of regional utilization, they reduce the wait time that customers have to endure and thus, reduce the number of returns that are initiated.

‍‍To Save on Shipping Expenses

By making use of regional utilization, you can save immensely on your shipping costs because prices increase along with distance and if the distance is shortened due to goods being located to the customers that order them, shipping expenses automatically decrease.

To Increase Profit Margins

Regional utilization not only reduces shipping and logistical expenses, it also increases the efficiency of fulfillment operations, including saving money on returns management. All these elements when put together lead to an overall increase in your company’s profit margins.

Some more important uses of regional utilization are listed below:

  • Finding the inventory allocation across the country according to demand
  • Creating a successful strategy for effective deliveries
  • Changing to a low-cost shipping module
  • Increasing product visibility better helps your seller account on online marketplaces to perform better
  • Reducing RTOs
  • Increasing customer satisfaction by meeting their expectations
  • Offering same-day delivery
  • Storing different inventory items at different locations as per their order volumes

7 Ways to Improve Regional Utilization & Optimise Demand-Based Inventory Distribution in 2024

To improve regional utilization (RU), eCommerce businesses can adhere to 6 methods mentioned below: 

Keep Warehouses at Multiple Locations

A centralized warehouse is easy to manage, but it increases the cost and delivery time, affecting your revenue and customer satisfaction. It is always better to have decentralized inventory at multiple warehouses across the country to reach customers faster, that are located in any nook and corner of the country.

Use a Demand-Based Inventory Model

regional utilization_RU_Demand Planning Forecasting Inventory Optimization
Source

Instead of keeping all of your inventory in a single warehouse, consider using a demand-based inventory model that allows you to store inventory closer to your customers. This can help reduce shipping times and costs, and improve regional utilization.

Have a Trained Resource Pool of Warehouse Operations & Delivery Personnel

Trained human resources in warehouse management & last-mile delivery can make regional utilization easy, as they will ease operations and smooth your delivery processes. They can personally handle any task with great effectiveness.

Opt to Partner with 3PL

Partnering with a trusted 3rd party logistics company helps you to take more and more orders and then easily fulfill them. A few fulfillment partners come with the feature of same-day and next-day delivery and have micro fulfillment centers scattered across the country, which increases regional utilization.

Never Risk Stock-Out of Inventory

Always keep a minimum amount of inventory with you to deliver orders swiftly instead of risking stock-outs. MOQs, reorder quantity and reorder level can help you to avoid stock shortage and purchase it as per your demand, in addition to improving regional utilization.

Optimize Data and Forecast Demand

Data is the equivalent of gold in the digital market. In today’s world, every business is collecting leads. Data will help your company to forecast its demand and improve regional utilization to offer better order fulfillment. You will not be overloaded with inventory or face shortages during seasonal sales. (You can learn more about this here, seasonal demand)

Look at data on where your orders are coming from, what products are selling the most, and when orders are being placed. This will help you understand your demand patterns and identify opportunities to optimize your inventory distribution.

Use a Warehouse Management System

A Warehouse Management System (WMS) is a high-tech software mainly used for warehouse management. It automates multiple warehouse processes which makes fulfilling orders faster and less prone to errors and mistakes. Inventory across multiple fulfillment centers and sales channels can be managed from a single dashboard.

Suggested Read: 6 Steps for Effective Physical Distribution

Conclusion: How to Optimise Inventory Distribution and Regional Utilization with WareIQ for Faster Order Fulfillment?

Regional utilization (RU) is now the standard industry indicator for measuring the effectiveness of eCommerce companies, whereby shipping orders from the same area might greatly raise the market’s profit margin. An increase in regional utilization (RU) can address the unbalanced dynamics of supply and demand, enabling quick fulfillment, significantly reducing shipping costs and enhancing the customer experience. By focusing on regional utilization, businesses can reduce shipping costs, improve delivery times, and increase customer satisfaction, which can all contribute to long-term success.

We at WareIQ personalize your deliveries according to their demand, priority, locations, etc. We offer branded shipping and micro fulfillment centers across the country to enable regional utilization in most cities and towns.

regional utilization_How WareIQ optimises speed delivery

WareIQ is an eCommerce fulfillment platform that offers Prime-like logistics to online brands for same/next day delivery.

You can split your inventory in-house or you can use a tech-enabled 3rd party fulfillment company like WareIQ to get access to fulfillment facilities that are strategically placed all over India.

We combine a nationwide fulfillment & shipping network, a highly-skilled warehouse operations team and our vertically integrated tech platform & inventory planning product to drive:

  • Over 30% accelerated sales with same/next day delivery options across 20+ marketplaces/D2C platforms
  • 80%+ regional utilization & 40% lower holding costs
  • 100% compliance with marketplace SLAs with 0% leakage claims in processing returns

Regional Utilization: FAQs

Supercharge your fulfilment with WareIQ now, contact our team.

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Key Elements: A good product name should include: Adjective (e.g., Stylish) Product Type (e.g., Kurta) Colour (e.g., Blue) Quality Indicator (e.g., Cotton) For example, instead of a generic title like "Kurta," use "Stylish Blue Cotton Kurta for Women." Detailed Descriptions A well-crafted product description provides essential information that addresses potential customer queries and enhances their confidence in making a purchase. Key Features: Highlight the unique selling points of your product, such as material, size options, and care instructions. Benefits: Explain how the product solves a problem or improves the customer's life. SEO Optimisation: Incorporate relevant keywords naturally throughout the description to improve search visibility. Ensure that your primary keyword, "Kurta”, and secondary keywords, like "Blue kurta", are included where appropriate. Competitive Pricing Competitive pricing is crucial for attracting buyers. Research similar products on Meesho to determine a reasonable price point. Cost Analysis: Consider your production costs, desired profit margin, and competitor pricing when setting your prices. Price Comparison Tools: Utilise Meesho's pricing tools to help you arrive at competitive prices that can increase your chances of making sales. Catalog Management A well-organised catalogue can enhance customer navigation and improve sales performance. Multiple Catalogs: It is recommended that at least 5 to 7 catalogues be created initially. This diversity allows you to showcase various products and increases your chances of receiving orders. Catalog ExampleRecommended ProductsFashionEthnic wear, Western wearHome EssentialsKitchen gadgets, Decor itemsElectronicsMobile accessories, Gadgets Regular Updates Regularly updating your product listings is essential to maintain relevance in the fast-paced e-commerce environment. Seasonal Trends: Adjust your offerings based on seasonal trends or customer preferences. Inventory Changes: Update your catalogue when new stock arrives or when items are no longer available. By implementing these strategies for product listings, you can significantly enhance your visibility and success on Meesho. Mastering how to sell products on Meesho involves not just listing items but strategically presenting them to capture customer interest and drive sales effectively. Order Management and Logistics Support Provided by Meesho Effective order management and logistics are crucial for any seller looking to thrive on Meesho. The platform has streamlined these processes to ensure that sellers can focus on growing their business while Meesho handles the complexities of order fulfilment. Efficient Order Processing Once a customer places an order on Meesho, the system automatically notifies the seller via email. This prompt notification allows sellers to manage their orders efficiently. Sellers can access their orders through the Meesho Supplier Panel, where they can view all relevant details, including customer information and shipping requirements. Bulk Processing: For sellers managing multiple orders, Meesho offers bulk processing options, allowing them to handle large volumes of orders quickly. This feature saves time and reduces the chances of errors during order management. Logistics Support Meesho has developed a robust logistics framework that leverages partnerships with various third-party logistics (3PL) providers, ensuring efficient delivery across India. Here are some key aspects of how logistics work on the platform: Valmo Logistics Service: Valmo is Meesho's logistics vertical, which was recently launched and designed to provide cost-effective shipping solutions. It aggregates various logistics providers to offer competitive rates—often charging less than ₹1 per order for services. This model allows sellers to benefit from lower shipping costs compared to traditional logistics services. Nationwide Reach: Meesho's logistics network covers over 27,000 pin codes across India, enabling sellers to reach a vast customer base. This extensive coverage ensures that products can be shipped quickly and efficiently, regardless of the buyer's location. Next-Day Dispatch: To enhance customer satisfaction, Meesho offers a Next-Day Dispatch (NDD) option. This service allows sellers to ship orders within 24 hours of receiving them, significantly improving delivery times and customer experience. Returns and Exchanges Handling returns efficiently is critical for maintaining customer trust. Meesho has implemented a straightforward returns process that benefits both sellers and customers: Seamless Return Management: Sellers can manage returns through the Supplier Panel, where they receive notifications about return requests. The platform provides clear guidelines on how to process these returns effectively. Inventory Management: Returns are processed quickly to minimise disruptions in inventory levels. Sellers can easily track returned items and update their stock accordingly. FeatureMeesho LogisticsCompetitorsCost per OrderUnder ₹1Varies (typically higher)Nationwide Coverage27,000+ pin codesLimited coverageNext-Day DispatchAvailableOften not guaranteedReturn Management SupportIntegrated in Supplier PanelManual processes required The platform's commitment to providing low-cost logistics solutions and efficient order processing enables sellers to focus on what they do best—growing their business. By leveraging Meesho's logistics capabilities, sellers can enhance their operational efficiency, improve customer satisfaction, and ultimately drive sales growth. Payment Processing and Financial Insights on Meesho Understanding the payment processing system on Meesho is crucial for sellers aiming to manage their finances effectively and ensure a smooth cash flow. Meesho operates on a seven-day payment cycle, meaning that once an order is successfully delivered, sellers can expect payments to be credited to their registered bank accounts within a week. This prompt payment processing enables sellers to reinvest in their businesses quickly and maintain operational stability. Payment Dashboard Overview The Meesho Supplier Panel features a comprehensive Payments tab that provides essential reports for tracking financial transactions. Here’s a breakdown of the key reports available: Report TypeDescriptionNext PaymentDisplays the amount scheduled for your next payment cycle, helping you anticipate cash flow.Last PaymentLists the total amount transferred to your account during the most recent payment cycle.Total Outstanding PaymentsEstimates all pending payments owed to you, which may fluctuate due to returns or adjustments.Previous PaymentsOffers a historical view of all amounts previously transferred to your account, aiding in reconciliation.Commission Tax InvoiceGenerates tax invoices for all fulfilled customer orders, which is essential for bookkeeping and tax compliance.Deductions and CompensationsProvides details on any charges or compensations applied to your payments, ensuring transparency. This structured approach allows sellers to monitor their earnings closely and address any discrepancies promptly. Payment Processing Steps Order Fulfilment: Once you fulfil an order and it is delivered, Meesho initiates the payment process. Payment Cycle: Payments are processed every seven days post-delivery, ensuring timely access to funds. Viewing Reports: Sellers can log into the Supplier Panel to view detailed reports that help track payments and understand any deductions. For instance, if a seller receives an order worth ₹1,000, they can expect this amount in their bank account within seven days of successful delivery, minus any applicable deductions or fees. Handling Deductions Sellers should be aware that certain deductions may occur from their payments, such as: Return Adjustments: If a customer returns a product, the corresponding amount will be deducted from future payments. Service Fees: Although Meesho operates on a zero-commission model, there may be nominal fees associated with specific services or promotional tools used by sellers. To clarify any doubts regarding deductions, sellers can click on "View Details" in the Payments tab. This feature allows them to download an Excel sheet containing detailed information about each deduction, including reasons and dates. Financial Management Tips To optimise financial performance while selling on Meesho, consider the following strategies: Regular Reconciliation: Compare the amounts listed in your Meesho Payment Report with your bank statements regularly to ensure accuracy. Utilise Reports for Insights: Analyse sales trends using the data provided in the various reports to make informed decisions about inventory and pricing. Plan for Returns: Factor potential returns into your financial planning to maintain liquidity. By leveraging these insights and tools available through the Meesho Supplier Panel, sellers can enhance their financial management practices and ensure sustainable growth in their online businesses. Marketing Your Products on Meesho Successfully marketing your products on Meesho is crucial for maximising visibility and driving sales. Meesho’s innovative marketing strategies leverage the power of social media, influencer collaborations, and targeted promotions to connect sellers with a vast audience. Below are key strategies to enhance your marketing efforts effectively. Leverage Social Media Platforms Social media is a powerful tool for promoting your products on Meesho. The platform enables sellers to share their product listings across various channels like Facebook, Instagram, and WhatsApp. Here’s how you can optimise your social media presence: Engaging Content: Create visually appealing posts that highlight your products. Use high-quality images and engaging captions that resonate with your target audience. Utilise Stories and Reels: Platforms like Instagram offer features such as Stories and Reels, which can be used to showcase new arrivals or special promotions. Short videos can capture attention quickly and drive engagement. Meme Marketing: Embrace the popularity of memes to create relatable content that engages users while subtly promoting your products. This approach aligns with contemporary trends and can increase shareability. Influencer Collaborations Partnering with influencers can significantly boost your brand visibility and credibility. Influencers have established trust with their followers, making their endorsements valuable for driving sales. Identify Relevant Influencers: Choose influencers whose audience aligns with your target market. Collaborate with them to promote your products through authentic reviews or unboxing videos. Affiliate Programs: Consider setting up an affiliate program where influencers earn a commission for every sale they generate. This incentivises them to promote your products actively. Targeted Promotions and Discounts Promotions are an effective way to attract customers and encourage purchases. Meesho allows sellers to run various promotional campaigns that can enhance visibility. Seasonal Discounts: Offer discounts during festive seasons or special occasions to entice buyers. Highlight these promotions in your product listings and social media posts. Referral Programs: Encourage existing customers to refer new buyers by offering rewards or discounts for successful referrals. Promotional StrategyDescriptionExpected OutcomeSeasonal DiscountsTemporary price reductions during holidaysIncreased sales volumeReferral ProgramsRewards for customers who bring in new buyersExpanded customer baseInfluencer CollaborationsPartnerships with influencers for product promotionEnhanced brand credibility Utilise Meesho’s Built-in Marketing Tools Meesho provides various tools within its Supplier Panel that can help sellers market their products more effectively: Analytics Dashboard: Monitor the performance of your listings through insights on views, clicks, and conversions. Use this data to refine your marketing strategies. Quality Dashboard: Keep track of customer feedback and return reasons to improve product quality and customer satisfaction. Build a Community Engaging with your audience fosters loyalty and encourages repeat purchases: Respond Promptly: Engage with customers by responding quickly to queries or comments on social media platforms. Create a Brand Story: Share the story behind your brand or products, which can resonate emotionally with customers and create a sense of connection. Incorporating these elements will not only help you sell on Meesho but also position you as a trusted seller in the competitive e-commerce landscape. As you explore how to sell products on Meesho, remember that consistent engagement and adaptation to market trends are key to long-term success in selling on Meesho. How to Analyse Sales Performance on Meesho? Understanding how to analyse sales performance on Meesho is crucial for sellers aiming to optimise their business strategies and enhance profitability. With the platform's rapid growth, particularly during significant sales events like the Mega Blockbuster Sale, sellers can leverage data analytics to make informed decisions. Key Metrics to Monitor To effectively gauge performance, sellers should focus on several key metrics: Total Sales Volume: Track your total revenue over specific periods. For example, during the recent Mega Blockbuster Sale, Meesho reported a 40% increase in total orders compared to the previous year. Customer Engagement: Monitor customer interactions, such as visits to your product listings. Meesho recorded around 145 crore customer visits during its latest sale, indicating strong engagement. Conversion Rates: This metric shows the percentage of visitors who make a purchase. Higher conversion rates suggest effective marketing and appealing product listings. Return Rates: Keep an eye on return rates to identify quality issues or customer dissatisfaction. Analysing return reasons can help you improve your offerings. Tools for Performance Analysis Meesho provides several tools within its Supplier Panel that enable sellers to analyse their sales performance effectively: Sales Dashboard: This feature displays real-time sales data, allowing sellers to track performance against set targets. Quality Dashboard: This tool helps sellers understand return reasons and customer feedback, enabling them to improve product quality and customer service. Utilising Data for Growth Sellers can harness these insights to refine their strategies: Adjusting Inventory: By analysing which products perform best, sellers can optimise their inventory levels and focus on high-demand items. Targeted Marketing: Understanding customer preferences allows for more targeted marketing efforts. For instance, categories such as Home & Kitchen saw a 105% year-over-year increase, indicating strong consumer interest that can be capitalised upon. MetricRecent PerformanceTotal OrdersIncreased by 40% YoYCustomer Visits145 crore during the salePrepaid OrdersSurge of 117%Popular CategoriesHome & Kitchen (+105% YoY) By focusing on these areas, sellers can enhance their business operations and capitalise on the growing e-commerce landscape in India. As demonstrated by the success of many sellers during recent sales events, effective analysis and adaptation are essential for thriving in this competitive market. By understanding how to sell on Meesho and leveraging data-driven insights, you can position yourself for sustained growth in this dynamic platform. Unlocking Success on Meesho with WareIQ WareIQ, a Y-Combinator-backed e-commerce platform, empowers Meesho sellers by streamlining their operations and enhancing fulfilment efficiency. Here’s how WareIQ can elevate your selling experience on Meesho: Efficient Fulfilment Network With a pan-India network of Seller Flex and FAssured-compliant centres in 12+ cities, WareIQ ensures quick and reliable shipping across 27,000 pin codes. This extensive reach helps sellers deliver products to customers swiftly. Seamless Multi-Channel Integration WareIQ offers easy plug-and-play integrations with popular marketplaces like Meesho, Amazon, Flipkart, Myntra and D2C platforms such as Shopify. This enables sellers to efficiently manage their inventory across multiple channels while leveraging analytics to optimise performance. Smart Inventory Management The Inventory LogIQ solution uses AI to help sellers minimise stockouts and automate replenishment. This ensures that you always have the right products available for sale on Meesho. Streamlined Returns Process WareIQ provides a tech-enabled returns quality control system that captures high-definition evidence of returned products. This feature helps reduce marketplace claims rejections by ensuring clear documentation of any issues. Comprehensive Seller Support Sellers benefit from dedicated support, including assistance with account management, GST registration, and verification processes for Non-Delivery Returns (NDR) and Cash on Delivery (COD). By leveraging WareIQ’s innovative solutions, you can enhance your selling strategy on Meesho, improve operational efficiency, and drive greater sales success. Conclusion Mastering how to sell on Meesho can significantly enhance your e-commerce journey, providing access to a vast customer base and a zero-commission model that maximises profits. By implementing effective product listing strategies, utilising data analytics for performance evaluation, and leveraging support from platforms like WareIQ, you can streamline your operations and drive sales growth. Embrace the opportunities that selling on Meesho offers, and position yourself for success in the dynamic online marketplace.

November 15, 2024