How multi-piece-shipment (MPS) can potentially reduce your logistics cost by half?
In e-commerce, a multi-piece shipment refers to a single order that is fulfilled using more than one package. This can occur when an order is too large to fit in a single shipment.
E-commerce companies from various categories may use multi-piece shipments, but it is most commonly used in the following categories:
- Fashion and apparel: Ship multiple items, such as clothing and accessories, in one package to customers.
- Home goods and furniture: Large items such as furniture and appliances are processed as Multi-piece Shipments
- Electronics and technology: Ship multiple items, such as cell phones and computers, in one package to customers.
- Beauty and personal care: Makeup and skincare products are put into one package and shipped to customers.
- Grocery and household items: Food and household supplies are delivered in one package to customers.
- Books and media: Multiple items such as books, movies, and music, are shipped in one package to customers.
- Toys and games: Usually ship multiple items, such as toys and games, in one package to customers.
However, not all e-commerce companies from the aforementioned categories use multi-piece shipments. Ultimately, it depends on their specific business needs.
Cost-Saving Potential of Multi-Piece Shipments (MPS)
Multi-piece shipments, or consolidated shipments, have the potential to save costs in several ways.
- Reduced shipping costs: By consolidating multiple items into one shipment, the overall shipping cost per item may be reduced.
- Reduced risk of damage or loss: Consolidation of multiple items leads to lesser exchanges at hubs and thus lesser risk of damage or loss
- Reduced inventory holding costs: Consolidating multiple items into one shipment allows for more efficient use of warehouse space, which can reduce inventory holding costs.
- Reduced handling costs: Elimination of multiple pick-ups and deliveries leads to a reduction of handling costs associated with each individual package.
- Reduced packaging costs: The need for multiple packages and their associated costs (e.g. boxes, packaging materials, etc.) is eliminated due to the consolidation of multiple items.
Here is an example to illustrate how multi-piece shipments can save logistics costs, and significantly improve the consumer experience.
“Imagine a mattress brand receiving an order of a mattress, a pillow, and a comforter from a customer setting up his new house. If the brand’s fulfillment company divided it into three packages – one for the mattress, one for the pillow, and one for the soft furnishing – the shipping cost would be INR 900. On the other hand, if the entire order was shipped in a single multi-piece package, the total shipping cost would be roughly INR 390. This is a logistics cost saving of INR 490 per order!”– Harsh Vaidya, CEO, WareIQ
What happens in absence of Multi-piece Shipment (MPS) capability?
In absence of MPS, customers, generally, receive a broken brand experience.
- Different ETAs for potentially complementary products
- Difficulty in tracking all orders in a single place
- Higher cost of deliveries
- Delay in deliveries of different items from the same order
This leads to overall negative customer sentiment toward the brand and higher levels of customer dissatisfaction
What is required to process Multi-piece Shipments (MPS)?
A confluence of smart technology to efficiently manage orders and inventory and skilled people and operations are what make Multi-piece Shipments (MPS) possible.
WareIQ’s smart fulfillment capabilities combine the above in the following form to enable MPS for brands and sellers across categories and channels:
- Order Management system with the ability to add more packages to shipment details
- Fulfillment tech in the warehouse provides staff visibility on the Order IDs, and SKUs to be clubbed together, and scan-based operations to make it error-free
- Unified tracking engine with the ability to club multiple AWBs into one
- Training of the FC staff on the nuances of this use-case
Here’s a look at how WareIQ helps sellers in creating Multi-Piece Shipments (MPS) easily in just a few clicks: