Top 10 Dropshipping Websites for eCommerce Sellers and the Best Methods to Choose a Dropshipping Company
Are you interested in dropshipping but struggling with where to begin? You’re not alone. Most first-time eCommerce sellers face a similar problem with identifying the best dropshipping websites, as there are a lot of options. Questions often arise regarding the cheapest and best offerings that have the most facilities. We have put together a list of the top dropshipping sites to help you make a decision. We will discuss each dropshipping website and its services in detail and suggest the kinds of retailers that would benefit from using it. What are Dropshipping Websites? Dropshipping websites or dropshipping selling platforms are third-party dropshipping companies that manufacture, store and ship the goods that an online merchant sells using the dropshipping business model. Instead of buying in bulk from a supplier, an online company using the dropshipping business model would buy a single item upfront, straight from the manufacturer and then wait to pay for it when the product is sold. There are many benefits to dropshipping companies for new business owners if you do not have many employees during the early phases of your company. Giving up order fulfillment to a third-party service frees up time that may be used for marketing, customer service and brand development. [contactus_uth] How Can Automated Dropshipping Help Your Online Store? Dropshipping websites have a lot of benefits for merchants wishing to expand their business because it transfers most of the heavy work to a third-party fulfillment firm. Some of the benefits are: Low Operating Expenses With dropshipping companies, you never have to worry about spending money on overstocking your product because you only pay for the goods that have been sold. This decreases the amount of investment needed to fulfill orders as firms do not have to pay for what they haven’t used. Lower Initial Investment Since you don't have to invest in product manufacturing and storage, initial setup expenses become substantially cheaper. The extra savings allow for greater spending on sponsored advertisements and promotional campaigns to kickstart your business's growth. Less Need for Human Resources A supply chain network needs to be very accurate and there need to be several experienced employees to perform every task. While automating your supply chain processes through dropshipping suppliers, there are fewer chances of errors and mistakes being made and also results in lower expenses due to the lack of human resources that are needed. Helps in Inventory Decentralization There are fewer reasons to store your inventory in a fixed location and manage each task from there because the stock is maintained and shipped from your dropshipper's location. You can conduct business from your shop, house or a remote cottage away from the city. The only thing required is a good internet connection and a laptop in order to keep track of all your transactions. This is how it helps in decentralized inventory management. Low Capital Risk With New Items Since most dropshipping websites highlight their best-sellers, you are already aware of the commodities that are in high demand. This gives firms a detailed insight into which products will be successful so that they can focus all their efforts on marketing and selling them. Saves Time It takes a lot of time to manage logistics, secure stock and dispatch goods. You can concentrate on promoting your items and creating your brand image as order fulfillment tasks will be handled by the dropshipping websites you have partnered with. This frees up the amount of time you need to spend thinking about order fulfillment and other operational procedures. 10 Best Dropshipping Websites Importify Source Importify manages product importing and automation for dropshipping stores using WooCommerce, Shopify, Wix or Jumpseller. Importify stands out as one of the greatest all-purpose solutions for enhancing WordPress-based WooCommerce businesses while many dropshipping websites are exclusively targeted at Shopify stores. You can find the products you wish to sell and import them with just one click to your WooCommerce store. If one supplier runs out of a product or they discover a better offer elsewhere, Importify makes it simple to swap providers. To speed up the process of moving from sourcing to selling, users can also establish pricing guidelines prior to importing. Additionally, you get a Chrome extension for even simpler product imports, a product listing editor and round-the-clock assistance. Everything mentioned is included in Importify's $14.95 per month Basic Plan. You can upgrade to the Premium plan for $27.95 per month if you want to import goods from Amazon and AliExpress. Dropshippers with a lot of traffic should choose Importify's Gold Package, which costs $37.95 a month. This enables automation of the platform's order fulfillment processes. You can choose product variants and automatically fill up client addresses on supplier forms, enabling you to sell and ship items at a big volume quicker than ever. Shopify Source One of the most well-known platforms for creating an online store, Shopify is one of the best dropshipping websites and is pre-integrated with a wide range of suppliers. A large number of the other dropshipping sites on the list advise using Shopify as your operational hub, simply because Shopify is an authentic plug-and-play eCommerce platform. It functions equally well for dropshipping as well as conventional internet stores. You can create a Shopify account to access more than 70 different dropshipping applications and join forces with a range of suppliers, distributors and warehousing companies, then start selling. Like other dropshipping companies, third-party fulfillment companies manage the inventory and logistics. You simply need to spread the word about your items where the built-in marketing capabilities of Shopify are useful and you can advertise on TikTok, Facebook and Pinterest or display your products on online stores like eBay so that you can concentrate on selling where it matters and the Shopify dashboard automatically records where buyers are coming from. If you are new to the industry, Shopify is one of the best dropshipping sites and has a tonne of materials as well as live chat and email help available around the clock. Suggested Read: Shopify Inventory Management Apps DSers by AliExpress Source China-based eCommerce company Alibaba owns the internet marketplace AliExpress which in turn operates Dsers, AliExpress’s dropshipping website. Millions of products are available on AliExpress, which is frequently the first choice for dropshippers. AliExpress enables you to order single units of goods, unlike many wholesale merchants on Alibaba. As a result, you can ship straight to clients without the requirement for dedicated off-site storage for inventory. Benefits include free registration and the ability to search through millions of products at competitive pricing. If there is a language barrier, you can place an order simply through the website without speaking to any suppliers. All alerts and tracking for shipments are handled by DSers. Additionally, there are a number of very dependable automation technologies that automate order fulfillment for well-known eCommerce platforms. A few of its limitations are that China is home to the vast majority of AliExpress's suppliers. While this results in lower rates and frequently available global shipping alternatives, it can take some time for products to reach customers in other nations. Although buyers have to wait weeks for their purchases to arrive, the packet option makes this inexpensive. DSers by AliExpress is reasonably priced, simple to use and offers a wide range of goods. It's where dropshippers frequently go to test out new products as a result. However, it's not necessarily the best option for large or quickly expanding eCommerce firms that needs swift and transparent delivery to minimize customer service concerns due to the lengthy shipping durations for many products. Suggested Read: AliExpress Alternatives Wholesale2B Source Customers who may do product research before incorporating listings on their eCommerce platform can handle the purchasing and shipping procedures with Wholesale2B's end-to-end dropshipping solution. US-based dropshipping website, Wholesale2B, is working to automate dropshipping so that suppliers and other logistics providers can be contacted as little as possible. Wholesale2B offers an easy, automated solution to start dropshipping a variety of goods from suppliers throughout the globe. The free browsing service has several integrations with eCommerce platforms and online marketplaces. Although visiting Wholesale2B is free, you must have a separate monthly subscription for each service you choose to purchase from them. For instance, you need to pay separately for each platform if you wish to dropship items on a number of them. Additionally, they only offer limited customer care options during regular work hours. The automated dropshipping platform offered by Wholesale2B makes it simple and affordable to start selling on the majority of eCommerce sites. However, they have various membership costs for different services, which might mount up rapidly if you are using their other features like site analytics or selling on several platforms. SaleHoo Source SaleHoo, a New Zealand-based company, offers one of the biggest global directories of buyers and suppliers which is also into dropshipping and wholesale. SaleHoo offers a fantastic approach for customers to find various suppliers from around the world for both dropshipping and conventional wholesale thanks to the size of its database. In comparison to the competitors, their $67 yearly subscription is relatively inexpensive. Unlike other dropshipping websites like AliExpress, SaleHoo does not accept retail orders. Here, the process is a little more formal and needs to speak directly with the suppliers. As a result, you will need to establish contacts and open lines of communication with other companies. SaleHoo has a sizable global supplier network and charges competitive prices for its services. However, getting started and testing new products is a little more difficult due to the procedures and direct contact with suppliers. Consequently, for dropshippers who have some experience with a specific sector or product, this might be a preferable choice. Inventory Source Source Users can place orders, track inventory and sync products from different supplier networks using Inventory Source's dropshipping automation platform. Inventory Source, a US-based company, specializes in providing a configurable platform for controlling the dropshipping process from beginning to end. Inventory Source allows you to connect to both their own network of suppliers as well as develop and manage your own vendors. Since you are not constrained by their curated lists, this makes it different from other dropshipping websites that enable you to grow your business over time without switching to a different software provider. Despite having a vast network of suppliers and products, Inventory Source charges extra for each supplier seller chosen. One supplier integration, for instance, is included in the $99/month basic package, whereas two integrations are included in the $125/month plus plan. Inventory Source offers adaptable dropshipping automation software that connects to the vast supplier network and controls the entire process. However, their invoicing structure makes it challenging for users to purchase from several vendors, which can be burdensome if you run multiple brands or a general-purpose business. Worldwide Brands Source Worldwide Brands is a dropshipping website that has a network of authentic wholesalers, importers and dropshippers available. The company is situated in Florida and has been screening suppliers for more than 20 years. It has a simple technique for finding vetted vendors. Additionally, it offers training materials for setting up and managing online businesses. You will still need to establish your own contacts and payment terms with suppliers. Also, they charge a $299 one-time lifetime subscription price which makes it difficult to test out the service to see whether it is suitable. With a validated list of reputable suppliers and staff based in the US, Worldwide Brands can assist you in finding the best supplier for your company. However, the initial investment is substantial and you will still need to build your own professional networks. Megagoods Source Megagoods is a consumer gadgets distributor contrary to other services because the California-based company is one of the few dropshipping websites that actually owns and stores its own merchandise, making it possible for quick distribution within the US. Megagoods is perfect for dropshippers that sell electronics items to customers in the US because the warehouse and fulfillment operations are both domestic, so customers in the US don't have to worry about long international shipping periods. In addition, they're reasonably priced at just $14.99 a month. A few of its limitations are in comparison to the bigger dropshipping suppliers and marketplaces, where Megagoods' product selection is somewhat more constrained because of its emphasis on consumer electronics. They also don't have integrations with eCommerce sites or research tools. Megagoods is excellent for electronic dropshipping from the US. Their product selection is rather more constrained, and as Megagoods is not yet integrated with any eCommerce platforms, you will need to create a fulfillment strategy from scratch. Spocket Source Spocket gives you a quality dropshipping database app that works particularly well for customers shipping within the US and abroad. You can easily upload the products into your Shopify store and sort the results by nation. By making it simple to locate US and EU products that will ship from within the nation rather than from China or other manufacturing countries, they reduce shipping delays and timelines. Additionally, this keeps prices down for both you and your clients. You can browse Spocket's product database using the company's free plan. You can upgrade to one of the paid plans once you are prepared to begin selling. The starter package is $24.99 and includes 25 products and unlimited orders. For $49.99 per month, you can upgrade to pro and get access to 250 products and branded invoicing. For $99.99 per month, you can access unlimited products with the Empire plan. You can also get a free 14-day Spocket trial and start selling internationally. Wholesale Central Source Wholesale Central is based in the US and has more than 25 years of experience connecting global suppliers and buyers. Wholesale Central's platform is incredibly simple to use and explore, and they have suppliers from all around the world. Since Wholesale Central is largely an internet wholesale channel, compared to other dropshipping websites and any interactions, correspondences or transactions must be made with the supplier directly. Finding the ideal dropshipping partner will require a little more research because the majority of their suppliers provide traditional bulk wholesale rather than dropshipping. Wholesale Central maintains a reliable database of global wholesale vendors. It is free for customers and simple to use. Finding suppliers who enable dropshipping can be a little more challenging, therefore any partnerships and procedures must be established directly with them. How to Find the Best Dropshipping Websites and Suppliers? For a dropshipping business to be successful, selecting a reputable supplier is essential. Follow the tips below to make the right decision: Go Through Reviews Check the supplier's online reviews to know what people are saying about the company's listed products and customer support. You will get insights into the kind of performance and satisfaction that they have provided to previous customers and will also help you to understand how they handle issues or other inconveniences. Check the Policies You need to know how your suppliers manage things like damaged goods, lost packages, refunds, etc. because such policies will ultimately affect you and your customers. Make direct contact with the supplier to inquire if the policies are not posted on their website to better understand if they coincide with your requirements. Sample The Products Yourself If there's something you're considering selling, place your own order to check the product's quality and shipping time. You can create a precise estimate of how the consumer will evaluate the quality of service based on these findings, for better or worse and will give you a better idea if the supplier meets your expectations. Understand the Rates Most of the time, dropshipping websites include unstated charges and expenses. To understand how these will collectively affect your overhead, you'll need a good understanding of the various shipping rates, monthly subscription fees, stocking fees, etc. to check if the supplier fits your financial requirements or not. Inquire About Automation As your company grows, it could become impractical to manually manage inventory levels, place orders and follow shipments. The supplier should ideally integrate with your eCommerce platform to automate these procedures and free up your time to concentrate on expanding your revenue sources. Software for warehouse management systems that manage inventory, labour, order ratio and other important functions should generally be provided by dropshipping suppliers. Conclusion: How Can WareIQ be a Good Alternative to Dropshipping Sites? When looking at options for dropshipping websites, it is crucial to pay attention while checking the prices, whether its supplier network is vast enough for your operations and whether its platform is capable of syncing with your online store. Although all dropshipping websites and businesses serve the same purpose, their costs, offerings, policies and user-friendliness might be very different. Since each success story of dropshipping sites is different, the perfect dropshipper for one brand may be entirely different for another. It's important to consider the types of products you sell, whether their service fees and shipping costs fit within your budget and whether their shipment durations are fair for the location of your customers. Dropshipping may not be the best option for retailers who require the whole range of eCommerce fulfillment services and partnering with a dedicated 3PL company like WareIQ could be a better option. WareIQ a full stack eCommerce fulfillment platform that provides every service that is needed by eCommerce retailers including storage in multiple fulfillment centers, picking and packing, shipping and last-mile delivery, across India. We have partnered with more than 20 of the largest shipping aggregators in the country and will automatically provide the fastest and most cost-effective solution for each order. We also provide advanced order tracking through our branded tracking pages, that enables users to provide a personalized experience to their customers. Dropshipping Websites: FAQs What refund policies do dropshippers have?The ideal way to manage refunds and returns are to determine whether it would be less expensive to let the consumer keep the product instead of sending a replacement. If not, let your consumer return it to your supplier. Only whether you will cover the return charges must be decided. Is dropshipping allowed on Flipkart/Amazon?You can use dropshipping for your business on Amazon, Flipkart, or any other eCommerce website as long as you follow their dropshipping policies. What percentage of dropshipping websites are successful?It changes with time and the experience a seller has. During the first year of operations, the highest success rate is around 10%. After 3-4 years, it goes up to 60 to 70%. Is dropshipping different from order fulfillment?Yes. Dropshipping is when customer orders are fulfilled directly by the supplier or wholesaler and order fulfillment is the process of fulfilling an order, either directly or through a 3PL fulfillment company.
July 08, 2022
3 Easy Steps to Sell on Meesho and Open a Meesho Seller Account in 2023
Meesho was founded in 2015 as an eCommerce selling platform and is currently headquartered in Bangalore. With a user base of over 2.6 million sellers across India, it is quickly emerging as one of the top online marketplaces in the country, taking on the likes of eBay and Snapdeal. The company’s focus is to provide an affordable alternative to some of the bigger names in the industry and offers a vast variety of categories and pricing options to consumers, as reflected by the more than 50 lakh product options on tap. In addition, Meesho also offers a relatively simple setup and vetting process compared to competitors, which makes it easier for small and medium-sized businesses to get onboarded and start selling their products to a large audience. In this blog, we take a deep dive into why you should sell on Meesho, how you can set up a Meesho seller account, the challenges faced by becoming a Meesho seller and how WareIQ can assist with fulfilling Meesho orders. Why Should You Sell on Meesho? Least Commission Rates in the Industry While most large online marketplaces charge a commission rate of anywhere between 5% to 20%, Meesho uniquely charges much lower rates. While the company labels it as 0% commission, it is closer to a spectrum of 1.1% to 1.4% depending on the commodity type and category. However, this is still extremely low compared to industry standards and thus, enables retailers to achieve higher profit margins by pricing their goods accordingly. High commission fees can often detract from a retailer’s ability to be profitable so the low rates offered by Meesho can be a game-changer, especially for smaller businesses who run on much tighter margins to stay afloat. Lack of Collection Fees In a similar stance as the collection of a commission on every product sold, most eCommerce selling platforms also impose a collection fee and a set of fixed fees on every product that is sold. By the time all these fees are deducted, sellers are barely left with anything other than the scraps, after doing the hard work of researching and developing a product that ultimately generates the sale. Fortunately for retailers who sell on Meesho, there are no chargeable fixed or collection fees, which assists in them getting more money in their own pockets. 24/7 Operation Retailers who sell on Meesho can take advantage of the fact that it does not have to abide by the same restrictions and timings that a brick-and-mortar store does. This means that the window to generate interest amongst potential customers and ultimately make a sale, increases exponentially. No longer do sellers have to open their shops and patiently wait for customers to arrive. Rather, they can be doing something productive in terms of the business or even in their personal lives, knowing full well that orders can be generated, regardless of whether they are physically present at the office or not. eCommerce retail waits for no one as all the infrastructure that is needed to fulfill an order is already in place. Penalty-Free Returns One of the biggest pain points for retailers who sell online is getting return-to-origin (RTO) requests from customers. Most other online marketplaces penalise sellers in some way or another, regardless of the reason for the return. Returns can often be initiated due to the fault of the retailer, such as when the wrong item is packed or the product is damaged in transit. However, the majority of returns happen from the customer’s end, such as them finding a better deal elsewhere, having buyer’s remorse or the product not meeting their expectations, so it is generally unfair for the buyer to incur the expenses in these circumstances. Retailers who sell on Meesho can breathe a sigh of relief as they are not penalised for returns, regardless of the reason and all the forward and reverse logistics are handled by Meesho itself. Lack of Shipping Fees Unexpected shipping fees are one of the biggest contributing factors to customers abandoning their carts. Retailers often have to implement various strategies to combat the impact of shipping charges in order to maintain their profit margins. However, Meesho sellers can be reassured that they do not have to pay a single dime in shipping expenses while selling on the platform. Meesho uses the tactic of bundling the shipping cost into the price of the product. For example, if a seller prices a product at ₹300, Meesho will display the price on the listing page as ₹350, to account for delivery expenses. This means that retailers who sell on Meesho will never have to incur the price of shipping, which can alleviate a very big hurdle. [contactus_lilgoodness] 3 Easy Steps to Setup a Meesho Seller Account and Start Selling on Meesho in 2023 Set Up a Meesho Seller Account If you want to sell on Meesho, the initial step you need to take is to create a Meesho Seller Account. Go to https://meesho.com/ and click on “Become a Supplier” on the upper right of the page. You will then be redirected to the registration page to fill out your mobile number. After you have done that, select “Start Selling”. You will then be taken to the Meesho Supplier Panel where you will have to type the OTP that was sent to your phone. You can then enter your preferred email and create a password. You can opt to receive notifications on Whatsapp if you need to. After that, click “Create Account”. The only things you need to sell on Meesho are: Active bank accountGSTIN (only if your sales exceed 40 lakhs)PAN card Begin Listing Your Products To list the products you want to sell, go to the Meesho Seller Panel and click on “Catalogs Upload”. There are 2 methods to upload products listings on Meesho so you can choose the one that suits your requirements: Bulk Upload Listings Select the “Add New Catalog in Bulk” option, mention your product category and choose the appropriate one from the list. After doing that, you will get an option to download a template or create your own. If you do not have your own, click “Download Template”. Once it is downloaded, you will get access to an excel-like spreadsheet. Enter the details in the form, using the instructions mentioned on the first sheet and enter the product details on the second sheet. Once you have filled out all the information, go back to the previous page and select “Upload File”. Add Single Listings Select the “Add Single Catalog” option and repeat the same process of selecting your product category. After that, upload the relevant pictures to the website. Then, enter the product details and if there are multiple variations, click the “Copy Input Details to All Products” box and edit them individually from there. Finish providing the remaining details and click on “Submit Catalog”. Receive Orders and Deliver Them Once you have finished setting up your account and listing your products, you will start to receive orders from interested customers. You will get order notifications through your Meesho Supplier Panel and by email, whenever you get a new order. You can then choose to accept or reject it. The order can either be fulfilled by Meesho themselves or through your chosen 3PL fulfillment provider. You have now become a successful Meesho seller. Suggested Read: How to sell on snapdeal? Challenges Faced by Retailers Who Sell on Meesho Enormous Delivery Expenses Because Meesho incurs all the burdens and costs associated with shipping and distribution themselves, it results in much higher delivery expenses than other platforms. Sellers are often good at finding ways to evade extensive shipping charges but implementing various strategies in terms of their pricing. However, Meesho doesn’t have this luxury and just has a standard practice of increasing the listing price by a percentage of what they would pay for the shipping charges. While sellers don’t directly face any of the heat that stems from rising shipping prices, they could be in for a rude awakening if Meesho decides that this policy isn’t feasible and starts to charge sellers for delivery. Varying Degrees of Quality Control Meesho doesn’t have very strict quality checking procedures so oftentimes, customers will order a product, only to find that is damaged or that the materials used are substandard. While this may not be the fault of sellers who take it upon themselves to perform rigid quality checks on their own products, it does damage the reputation of the platform as a whole, including all the retailers that sell on, due to the fact that customers might associate the entire platform as not being reliable. This can result in lower sales and trust in companies that sell on Meesho. Slow Delivery and Inconsistent Customer Support Many customers often complain about Meesho products not being delivered on time. This reflects badly on sellers, many of whom rely on Meesho’s delivery service. Customers often associate a bad experience, not just with the selling platform but with the brand itself. If any issue does arise in the delivery process, customers are often greeted by lackluster customer service that doesn’t answer their queries or solve their issues. This can have severe consequences for brands that are trying to attain repeat customers. Suggested Read: You can also read how to sell on Etsy? Conclusion: Is it a Good Option to Sell on Meesho in 2023? Meesho is one of the few eCommerce marketplaces that prioritise the well-being of their sellers, over themselves and at times, even over their own customers. While this may seem like a decision that may not require much thought, retailers who sell on Meesho are also faced with their own unique challenges, just like any other selling platform, while also offering a variety of benefits such as being able to achieve the highest profit margins in the industry. Ultimately, the decision should come down to the short-term and long-term goals of the company, nature of their products, business strategy and type of audience they want to target. Retailers would be best suited to sell on Meesho while also selling on other marketplaces, in order to achieve the highest level of visibility and market share. If you are an aspiring eCommerce retailer or you already have an eCommerce business and are looking to expand, you can opt to partner with WareIQ. WareIQ is one of India’s fastest-growing eCommerce fulfillment providers that uses the most advanced technology in the industry to leverage the performance of our users and help them excel. We help users conveniently sell and manage their orders and inventory across more than 20 of the biggest eCommerce marketplaces, through our custom WMS. Users can track their inventory across multiple fulfillment centers and get real-time updates as and when any changes occur, manage all their past and present order data across every platform they sell on, forecast demand using historical data to determine the appropriate amount of inventory to store, make use of intelligent inventory placement solutions that are closest to their customers and much more. We also offer services that encompass the entire suite of fulfillment operations to achieve faster delivery speeds at more cost-effective pricing. Sell on Meesho: FAQs Can retailers sell on Meesho without GST?Retailers who do not exceed an annual sales revenue of 40 lakhs can sell without needing to pay GST. However, for most retailers, their sales volumes will exceed this amount and will have to pay GST. How does Meesho work for resellers?Resellers can share listings on Meesho with the people in their circle or on social media, which can earn them a profit per sale that they make. The products are supplied by the retailers who have opted in for this scheme. Does Meesho refund money if a product is returned?If a product is returned, Meesho offers a full refund to the seller that will be credited to their source account, in case it is an online transfer and credited to their registered bank account, in case it is a COD order. Does Meesho have its own warehouses?No, Meesho leases warehouses and logistics operations from other companies and consolidates it in a user-friendly manner for sellers. What services does WareIQ offer to Meesho sellers?WareIQ offers services such as a WMS that can integrate with multiple selling platforms, including Meesho and can synchronise inventory monitoring and provide real-time updates across all of them. We also provide order fulfillment for Meesho sellers that includes delivery to the end customer at the fastest and cheapest rates.
July 07, 2022
Dropshipping vs Order Fulfillment: 5 Key Differences in 2022
In this day and age, where competition in the eCommerce space is rife, online sellers have to do everything in their power to ensure that their customers have an exemplary order-to-delivery experience to ensure they return and have a favourable view of the company. In order to ensure an ultra-smooth delivery process, small to medium-sized businesses can opt between dropshipping vs fulfillment, after analysing their own capabilities and requirements. In this article, we go through the differences and pros and cons of dropshipping vs order fulfillment so that you can make a more informed decision as to what would be right for your business. What is Dropshipping Order Fulfillment? Dropshipping Order Fulfillment is a retail fulfillment process where the buyer (e.g., a retailer or an eCommerce firm) doesn’t store the products they sell. Instead, they purchase the products directly from a third party and ship them directly to the customer that has purchased them, inshort they dropship products to direct customers. Therefore, the seller does not directly handle the product. As explained in greater depth below, the greatest difference between Dropshipping and order fulfillment is that the seller does not own, or even stock, any inventory. Instead, it is purchased from a third party (e.g., manufacturer or wholesaler) to fulfill the orders as required. Why does a dropshipper not show up as a stakeholder in the supply chain? The simple answer is that dropshipping order fulfillment is a service and not a role. Additionally, any of the three pillars that typically form the supply chain i.e manufacturer, wholesaler, and retailer, can play the role of a drop shipper. For example, suppose a manufacturer ships its goods directly to your customer. In that case, they are conducting dropshipping on your behalf. A retailer can also offer to do the same on your behalf. However, remember that the competitiveness of the end consumer pricing would depend on who the dropshipper is. Typically, a wholesaler or a manufacturer would hold the advantage here. [contactus_uth] What is an Order Fulfillment Company? Order Fulfillment is defined as the chain of receiving orders, processing them, and delivering those orders to the customer. By extension of the definition above, an Order Fulfillment Company is a third-party firm that executes this process on behalf of its client companies that receive orders directly from its customers. Examples of such clients for an Order Fulfillment Company include an online eCommerce portal or a chain of offline retailers dealing directly with the end customer. The starting point of this process is when a customer places an order, and the order information is delivered to the inventory storage location or a warehouse facility. The line items in the order are located, packed, and dispatched in a timely manner so that it reaches the customer’s doorstep on time, thereby completing the order fulfillment process. In cases of order returns, the return process and transactions are also managed by the Order Fulfillment Company. Although the end customer doesn’t see any of this behind-the-scenes activity, the many parts of executing order fulfillment are crucial in achieving the most critical metric of a successful business, i.e., customer satisfaction. Essential Requirements for Dropshipping vs Order Fulfillment From a Warehouse Quite naturally, each buyer has different needs for their order fulfillment based on their business requirements. Buyers are dependent on their suppliers to provide them with accurate and timely information to enable them to satisfy client expectations. Typical data points and information required include goods and item data, inventory levels, legal and financial documents, shipping details (etc). Some Common Requirements for Electronic Trading of Dropshipping Fulfillment Centers are: To have a setup to receive electronic ordersTo have comprehensive information about products to effectively sell the supplier’s (wholesaler, manufacturer) products onlineTo contain updated information about inventory and stock levelsTo possess the ability to furnish order confirmations, provide ETAsTo be able to manage order cancellationsTo be able to manage varied shipping documentation including packing slips, tags, shipping labels, retailer’s brands, logos, and information about shipment tracking.To be able to handle invoices electronicallyTo be able to handle order returns and manage financial and re-order-related transactions Some Common Requirements for Order Fulfillment to a Warehouse or Storage Facility: To have comprehensive product informationTo receive, acknowledge, manage, and process orders electronicallyTo be able to handle invoices electronically To be able to hand scale and rapidly expand operations as orders increase quickly, manage cyclical peaks, e.g., holiday season orders and promotion-led demand. Dropshipping vs Order Fulfillment Services: Key Differences [table id=6 /] Dropshipping vs Order Fulfillment Services: 4 Tips to Consider Which Option is Best Suited for Your Business in 2022 Determine the Nature of Your Products and Vendors To help you determine whether you should make use of dropshipping vs fulfillment, you should consider the nature of your products and the services offered by your supplier or manufacturer. Not all vendors offer dropshipping services so if yours doesn't provide them, it immediately disqualifies dropshipping as an option. Similarly, if you deal in goods that require special storage facilities such as cold storage facilities, not all fulfillment services would qualify. You need to make this decision based on the types of goods you offer and the requirements you need to store and transport them to the customer in the safest and fastest way possible. Identify Your Customer Base It is in every retailer's best interest to identify their customers and it should be no different for you. Depending on the products you have, the audience that will have interest and eventually convert that interest into a purchase will vary vastly. You need to identify your customer base, which regions they are located in, and which delivery option, whether dropshipping or order fulfillment, would be the best to deliver their orders swiftly and reliably. Shortlist the Technology Needed You, as an eCommerce retailer, need to make use of advanced technology in order to provide the best service to your customers and keep up with your competitors. Whether it is a WMS, advanced transportation systems, or inventory management, you need to determine your needs and which dropshipping or order fulfillment company can meet your requirements. Fulfillment companies are generally better in this regard as they have to keep up with the crowd, but different retailers will have varying technological requirements. Determine Your Profit Margins You need to determine the number of financial resources you have at your disposal. Prices vary when it comes to dropshipping vs order fulfillment, but prices charged by fulfillment companies are generally higher, due to the fees associated with storage, transportation, and technological solutions. Conversely, dropshippers mostly only charge you for the shipping of products that are already sold, so this is convenient if your sales volumes are lower and far between. You need to check how much you are willing to spend and balance it out with your requirements to make the best decision. Dropshipping vs Order Fulfillment Services: Advantages & Limitations Dropshipping vs order fulfillment companies meets different needs of eCommerce sellers. Depending on your business needs – and as they change with time – you could outsource your fulfillment to either, or both types, at different points of your business journey. Remember, one isn’t exclusive to the other, and you can use both simultaneously. For example, 3PL fulfillment centers can be used for stable products and a drop shipper for testing or launching new ones. Advantages of Dropshipping Maintenance of Broader Product Lines You could sell various lines of products with greater choice since you can tie up with numerous drop shippers. Maintaining a wider product line is more feasible since you aren’t purchasing or carrying inventory. Trying New Products Dropshipping allows you to test new products with minimal risks since your financial costs and risks are minimized. You can test out product innovations, logistics innovations, and new trends that could potentially become cash cows of the future. Lower CapEx Needed With drop shipping, the only significant investment is to get your eCommerce portal up and running since you aren’t buying or stocking inventory. This eliminates any significant CapEx needed to get you off the ground. Limitations of Dropshipping Limited Profits Using drop shipping fulfillment companies excludes you from the advantages of bulk discounts since you buy one product, or a limited number of them, in small quantities per order. Limited Control of Inventory Supply With a drop shipper partner, you are dependent on them for inventory. They may distribute their available stock based on preferences that exclude you. For example, during holiday sales, you may not get as much supply as you could potentially sell. Slower, Costlier Shipping You don’t control fulfillment locations or the speed of order processing when you partner with a drop shipping company. Delayed or failed orders could cause severe, even irreversible, damage to your company's reputation. Advantages of Order Fulfillment Centers Maintain Inventory Control Perhaps the most crucial strength of using a 3PL fulfillment company for your business is that you can track your inventory levels closely, eliminate (or at least minimize) out-of-stock opportunity losses, and maintain an optimal mix of product inventory. Get Orders Out Faster Partnering with a 3PL fulfillment company with conveniently located warehouse facilities (both central and satellite) enables your parcels to reach in 2-days (or less) since this is now the delivery standard. This keeps your fulfillment-cycle competitive with industry benchmarks. Storage Cost Becomes a Convenient Variable Expense There isn’t any need to maintain fixed storage space since you can rent out only the amount that you need. This ensures a healthy cost structure for the business. Limitations of Order Fulfillment Centers Limited by Inventory Held You are limited to selling only the inventory you have bought and stored. This burdens you with the risk of unsold inventory, increased carrying costs, sudden obsolescence, etc. Suggested Read: How to reduce Inventory Carrying Cost? Blocked Capital While this business model yields a higher ROI, it also needs a higher CapEx. It also means that your funds stay locked till you can turn it around by liquidating the current inventory. Cost of Damaged Inventory While 3PL fulfillment centers tend to have a 10% allowance for damaged or lost items, you still risk losing money on unusable items. A drop shipper always owns and maintains the stock, and therefore, damaged goods aren’t your liability. What’s the Verdict for Dropshipping vs Fulfillment? Dropshipping vs fulfillment may seem like an easy choice. However, both satisfy different client needs. They should be used judiciously to serve different product lines at different stages of a company's life-cycle and, importantly, should be used in tandem. Both can grow client businesses in different ways. Analyzing your business requirements – adjusted over changing times and scenarios – will enable you to decide on the type of fulfillment service best suited to you. Top 5 Dropshipping Companies WareIQInventory SourceOberloImportifySaleHoo Top 5 Fulfillment Companies WareIQShipBobRakuten Super LogisticsFedEx ExpressFulfillment by Amazon Dropshipping vs Order Fulfillment: Conclusion As is evident, comparing dropshipping vs order fulfillment companies is necessary, not only because they operate on different business models but also offer a different set of advantages and limitations. Depending on your business needs, company, product life-cycle and target customers, you should choose the option best suited for you. WareIQ provides a whole host of products including same-day order fulfillment, warehousing, and everything in between where customers can choose exactly what they need, which proves to be a more cost-effective option. Established in 2019, WareIQ, a Y-combinator backed startup, has rapidly grown to be the leading provider of full-stack eCommerce fulfillment services in India for some of the most reputed brands that spans more than 300 e-commerce brands such as Kama Ayurveda, Future Group, Piramal Group, Wingreens Farms and many more due to the ability to help them accelerate online sales with next day delivery and same day delivery service. WareIQ contributes to client success by not only providing 3rd Party fulfillment but also helping businesses store their inventory closer to their customers using our platform connected to a nationwide network of fulfillment centers and last-mile couriers - billed entirely on usage. We offer a comprehensive centralised platform that assists you in your eCommerce operations. In addition, we also provide an ML-based prediction engine for strategic warehouse network design, smart inventory placement, and integrated shipping apps to offer transparent ETAs, branded tracking experience, RTO risk insurance, and NDR control. We help you not only to reduce your logistic costs but also your delivery timelines – this could be the game-changer for your business needs! [signup] Dropshipping vs Order Fulfillment FAQs (Frequently Asked Questions) What are the top 3 fulfillment methods?• Merchant Fulfillment• Third-party Fulfillment • Dropshipping What should you avoid when dropshipping?• Worrying About Shipping Costs. • Keeping Too Much Faith in Vendors. • Looking for Quick Cash • Making Order Information Difficult to Access. • Not Enough Brand Display. • Not Managing Order Changes and Cancellations Properly• Mishandling Damaged or Lost Items • Return Issues What are some ways to avoid copyright dropshipping?When dropshipping, make sure to avoid any products that imitate protected brands. When you are dropshipping true branded products, you must present an authorization document from the brand supplier, or customs will refuse to let the products pass. Is dropshipping insurance required?To secure both your dropshipping business and yourself, you'll need business insurance. Business insurance is a plus as it helps to ensure that your dropshipping business continues to deliver goods to customers for years to come. Do you have to pay taxes when you drop ship?Yes, dropshipping does require payment of taxes. It's a little off-putting, because dropshipping is supposed to improve revenues. But the truth is if you don't pay taxes, you're putting your company at risk and its reputation at stake. Can I avoid the fulfillment process with an eCommerce fulfillment business?If you choose to start the ecommerce fulfillment route, it doesn't mean you have to spend hours packaging and shipping orders yourself. Various fulfillment service companies and centers are available to handle this for you, just choose a reliable one as it does add up to your overall budget. Dropshipping vs Order Fulfillment: Which one is the more common option for eCommerce retailers?Order fulfillment is generally the more widely adopted option because of the flexibility and additional services involved in it, compared to dropshipping. While each method has its own users, most eCommerce companies opt to partner with 3PL companies.
July 07, 2022
How to Start a Dropshipping Business in India? Step By Step Guide on How to Create a Successful Online Dropshipping Business
The e-commerce market has advanced significantly due to the widespread adoption of online purchasing for most goods. For many new e-commerce firms, dropshipping has proven to be revolutionary. Because the business strategy provides relief to the seller, it is becoming more and more common. As a result, most goods handled through the dropshipping channel are consistently in demand, according to consumer trends. Due to its minimal start-up expenses and lack of inventory holding requirements, future business owners find dropshipping quite enticing. The value of the worldwide dropshipping market in 2020 was $128.6 billion. The size of the worldwide dropshipping industry is anticipated to reach 476.1 billion USD between 2021 and 2026. Its expansion cannot be disputed. It is a legitimate business concept and has the potential to succeed over the long run. The advantages of establishing a dropshipping business are substantial. We have already talked a lot about dropshipping. Now let us know how to establish a dropshipping business in India. How to Start Dropshipping Business In India? It is advisable to thoroughly understand the industry before starting a business anywhere in the world. This includes knowing how the industry functions, the costs associated with operating that particular business, the legal requirements that surround it, who your competitors are, the technological and material aspects of the company, and your management skills. The same is true for dropshipping businesses in India; before engaging with this kind of venture, you must be fully knowledgeable in this field. Once your study on the dropshipping industry in India is complete, you must create a business plan. In this plan, you must include information on the company's location, legal form, all employees' names, the amount of money invested, marketing plans, and other essential details. After you have prepared your business plan, you must first register your company. You may register your company by selecting a business entity, such as an LLP, partnership, private limited company, or OPC, and applying to the Ministry of Corporate Affairs. You may also obtain a Business Registration Under MSME to start your business. Additionally, you must obtain a Shop Act License from the appropriate state authorities. Finally, you must also get a GST Registration for Service Providers In India to engage in dropshipping in India. In the meanwhile, you should get finance for your company. Today, you may do this through banks, financial institutions, gold loans, and venture capitalists. The process of business registration will take some time to complete entirely. You should also be aware that after obtaining MSME Registration, you should apply for a Mudra Loan. As a result, you will receive a Mudra Card that you may use to apply for loans for your business's operations or other financial needs. Once you've taken care of everything we've just discussed, it's time to start the business operations. First, you should speak with the online merchant about this, and then you may make a website or register as a dropshipper on listing websites. Further, we will discuss the step-wise process of establishing a dropshipping business. [contactus_uth] How to Create a Successful Online Dropshipping Business in 15 Easy Steps? Due to current laws and regulations controlling international money transfers and eCommerce fulfilment services, this can become a little tricky. So let's go step by step to learn how to launch a dropshipping business in India. Examine Indian Laws & Regulations You must complete the following step before beginning a dropshipping company in India. First, check the laws and norms governing the selling and importing of various items into India. For usage in India, some items may require prior certification and approvals from various governmental agencies. Therefore, the list of importable things that are forbidden, limited, and authorized is periodically updated. Check the import taxes on anything you want to purchase from foreign dropshipping vendors. For obvious reasons, you cannot require your consumer to pay customs duty after accepting an order at a specific price. Register Your Business You must register any business under the current legislation in India. There are several ways to register your business. Read some top-notch articles on setting up a company or business in India. A business or company can now be registered online through the Ministry of Corporate Affairs webpage. Your dropshipping company must be registered. If you don't, you might have a lot of difficulty with the different Indian government officials. However, you may gain much from the federal and state governments after registering a corporation or organization. Tax breaks and low-interest loans are some of these. Do acquire your business a Goods & Services Tax Identification Number (GSTIN). This is crucial nowadays if you want to purchase or sell anything in India. Additionally, you'll require it for payment-related formalities. Establish a Current Account You're in this business to earn money. So the following step is to open a current account with any top-notch Indian bank. Even though banks must adhere to strict rules set forth by the Reserve Bank of India to offer current accounts, you should compare several options to discover the finest ones. Due to their extensive global networks of branches and correspondent banks, I propose international institutions. Transacting is now considerably more straightforward and quicker as a result. You will require a current account with a bank that provides quick money transfers to any international manufacturers or suppliers if you plan to engage in dropshipping. A worldwide online compatible payment gateway from vendors like Razor Pay, CC Avenue, or others should also be available through the bank. Check for international transaction costs as well. Some banks impose absurdly high costs when sending money overseas. Keep in mind that these costs will reduce your earnings. Select Your Preferred Product A specific pattern appears when you look at some of the most prosperous dropshippers. They don't waste time dealing with commodities that are easily accessible. Instead, by creating a borewell for them and limiting competition, they oversaturate the market with speciality items in particular categories. With dropshipping, you'll be free to see how well these things do on the market. If they do well, you can permanently alter your mind and offer a new item. As a result, you'll avoid having an overstock of unsold goods and save money. Along with other things, you may use Google Trends to discover what's in style right now, browse through top-selling items, and keep an eye out for the "People Also Ask" sections of Google search results pages. You can also take advantage of new trends and unexpected requests. Research Your Competition Research your rivals' product offerings before starting your dropshipping business in India. You may get a lot of helpful information about the market rivals you otherwise wouldn't know about by conducting a quick online search. For example, you may get a list of competitors, information about where they like to operate, market prices, and other pertinent information. Find out how your rivals operate and the many product specialities they use to set themselves apart from you. Learn about the many marketing tactics they use to boost sales and profitability. Additionally, note the many value-added services they offer and any potential improvements you may make to increase client acquisition. To learn more about what your target market is looking for, go through some of the best-selling goods in your niche's customer evaluations. It's not a good sign if no significant rivals for your goods exist. That suggests that there isn't a market for that particular product. Lack of competition for a product is caused by various circumstances, including high transportation costs, supplier and manufacturing issues, and slim profit margins. Try to identify things that do not have these restrictions as a remedy. Create Listing You are now prepared to launch your dropshipping business in India once all legal and banking requirements have been satisfied. The next stage is to make a finalized list of the items you want to offer as a dropshipper. This may be pretty challenging and perplexing. Consequently, sound judgement is required. Again, confusion arises from the need to recognize online commodities that sell rapidly. It will be challenging because you'll be up against industry leaders like Amazon and Flipkart. Other dropshippers have shops on Facebook, Shopify, Etsy, and other websites. Spend time and effort searching for the top-selling items online. The best course of action is to identify evergreen and trendy things to offer online. Items like mobile phone accessories, vehicle accessories, equipment spare parts, and others typically have a significant number of both private and industrial clients. Create a list of the items you want to sell from your dropshipping marketplace and decide the industry you want to enter. Contact Suppliers For The Best Prices Several websites link retailers like you with producers, distributors, and suppliers, like Ali Express, IndiaMart.com, and TradeIndia.com. The top three websites can be accessed with certain benefits. They have a carefully chosen list of goods not subject to Indian government regulation. As a result, shipping these goods is simple. Additionally, some items are exempt from customs taxes. Before selling anything, it would be good to check on any import taxes. These top websites also include providers who have excellent, verified credentials. As a result, there is a far smaller likelihood of a supplier stealing your funds or delivering defective items. Dropshipping calls for this because you won't be physically examining each item. Instead, you can order a few product samples to evaluate the quality. Do not blindly trust the supplier's word over quality and performance. Get Quoting Price & Discuss Returns Policies After choosing your suppliers, get quotes for the items you want to sell through your dropshipping company in India. Since it's best to give a consumer a selection of things, you'll need to request quotes from several suppliers. Suppliers may frequently ask you for an average order volume. Avoid answering inquiries like these until you know the market and bagging orders. Verify the supplier's return policy, too. Customers frequently receive products that are defective or do not fulfil their expectations. Despite good treatment, sometimes things might still get damaged while in transportation. You cannot give a consumer a defective, incorrect or damaged product. As a result, you should inquire about the supplier's return procedures to choose whether to receive a replacement or a refund. Choose The Selling Price Of The Product The most crucial step in launching your dropshipping business in India in 2022 is now. Set a final price for the items you are selling. It would help if you considered all factors, including import duties, GST and other relevant taxes, returns and refunds, bank fees for online payments, and your operational costs. You can add your margin only once you've established fair pricing that considers all the factors above. Determine the item's cost and associated importation, tax, or other fees. Otherwise, you risk overpricing the products. Launch An Online Store Launching your eCommerce service website may start a dropshipping business in India in the best possible way. I'm not saying you should directly compete with online retail behemoths like Amazon, Flipkart, and others. However, owning a dropshipping website lends some legitimacy to your company. But if you decide on a marketplace, think about Shopify and Etsy. While Etsy lets you connect with customers in the US and other western countries, Shopify is more well-known in India. You can also start an online store on Facebook Marketplace for minimal cost. Facebook Marketplace's sole issue is that your viewers will be localized to your town or city. Integrate Widgets, Tools, and Apps Several such free and paid materials can help you start a successful dropshipping business in India. In addition, many dropshipping operations may be automated and sped up with the aid of these applications, widgets, and tools. Here is a comprehensive collection of top-notch free applications, resources, and solutions for your dropshipping marketplace. Using these tools and applications, you can run your dropshipping business reasonably efficiently. Doing this may increase sales while giving clients a better online buying experience. However, for the integration of these applications with Shopify or other marketplaces, you could need the assistance of a capable digital marketer. Operating Region India is a sizable nation with a variety of landscapes. Therefore, it's possible that your provider won't be able to deliver everywhere. You have two choices in these situations. One is to set boundaries around your business to ensure your provider can get there quickly. The second is to look for several providers that can deliver to most locations in India. There is a third choice you might want to take into account. To have your items delivered to the specified place, register with third-party logistics, a fulfilment partner service. Uploading Content & Images Upload top-notch pictures and material for each item you plan to sell through your dropshipping company. Look at global eCommerce fulfilment giants like eBay and Amazon for some great examples of how to use photos. The key has the buyer experience the thing virtually, without touching or physically seeing it. Therefore, the better your photographs and descriptions, the more likely your company will convert leads. Create Your Own Smartphone App In India, cell phones are used for over 50% of internet purchases. This is due to the availability of low-cost cellphones and low-cost, high-speed mobile Internet services today in India. It is common knowledge that most internet transactions are made on mobile devices on the spur of the moment. As a result, apps are a crucial tool for any dropshipper looking to grow their business and succeed in India. Utilize Social media To Promote You may promote your dropshipping company through a Facebook page, Twitter account, Instagram, Pinterest, LinkedIn, and other social media sites. Compared to traditional marketing, which entails expensive physical advertising, this is relatively affordable. In addition, you might build a blog for your dropshipping company and publish fantastic yet truthful product evaluations. Make affiliate marketing links available on the blog to assist readers in placing orders right away. You may create a free video channel on YouTube. Utilize this tool to post top-notch films promoting your goods and earn money. Tell stories to draw in more clients. You may collect client testimonials to produce videos that viewers will relate to. This increases your sales by bringing in new clients. Conclusion Be patient and take the proper actions because your audience could or might not immediately take to your new shop. If your first items weren't successful, there might be several causes, including poor marketing, inappropriate product selection, the incorrect target market, a lack of variety, dull media and website messaging, poor customer service, and so on. Therefore, use the early phase to explore, provide variants, and improve your decisions and methods. You will undoubtedly succeed and turn your dropshipping business successful one. WareIQ As Fulfilment Partner For Your Dropshipping Business Model Although dropshipping enables businesses to enter the market and begin selling swiftly, it has several drawbacks. For example, branding, refunds, and product accessibility issues can affect a company's marketability and sales potential. Sellers may get through these difficulties by integrating WareIQ services with dropshipping. Sellers can leverage WareIQ's current network to increase their reach and deliver in 24-48 hours, design a comforting returns policy, and provide the best items for their company. WareIQ enables simpler purchasing and returns procedures, improved market positioning, and brand quality and loyalty improvements.Dropshipping is an excellent option for many online merchants thanks to these advantages and WareIQ as a fulfilment partner. [signup] Frequently Asked Questions Is dropshipping legal in India?Drop shipment is legitimate, yes. It functions as a model of order fulfilment where the supplier manages the delivery and the merchant handles sales. How much money can you make in India via dropshipping?Income through the dropshipping method in India might include monthly revenues of anywhere between 20,000 and 5,00,000 Rupees. Your monthly revenue from these transactions might range from $4,000 to $200,000 per month. This is a typical sum of money you may make through dropshipping. As your business grows more successful, everything is always changing. What is the dropshipping profit margin?The typical dropship margin starts at 20% and gradually declines to 15% over time. You must pay this margin before any credit card dues or other fixed expenses. If you buy in bulk, you may be able to save 40 to 50 per cent off the retail price, which will make it easier for you to network with other suppliers. Do dropshippers pay tax?Yes, taxes are required for dropshipping. Given that dropshipping is a method of boosting earnings, it does seem a little gloomy. Taxes are unfortunately due when dropshipping. If you don't, there is a great risk to your company. What number of goods should I dropship?When you first start out, it is advised that you import 5–10 goods for your dropshipping business, but you should actually just concentrate on 2-3 products. You'll start your advertising campaign with these items as the initial ones. The remaining items are there to give your business a lively, authentic appearance.
July 07, 2022
What is Physical Inventory? Meaning, Types, Steps & Best Practices of Physical Inventory Counting Methods in 2022
The highest growth rate the sector has had since 2011 was $5.15 trillion in retail spending in physical locations in 2021. Retailers are retaining more inventory than ever before to meet demand. It's understandable why the number of warehouses in the US has been steadily rising since 2013. Despite the exponential rises in warehouse storage and inventory levels, evidence indicates that merchants aren't doing a great job controlling their goods. Only 8% of smaller companies keep track of their inventory. A pen and paper are used manually by another 14% of people. This article will explain the advantages of maintaining a physical inventory count for your retail shop as well as how to go about doing it. The tangible goods that retail establishments, manufacturing facilities, and warehouses stock are essential. Companies should do physical inventory counts of their products to maintain appropriate and correct inventory levels. Physical inventory counts can monitor stock levels, confirm current numbers, and spot internal problems or theft. In this article, we define physical inventory counts, list various inventory counting techniques, and outline the procedures for doing accurate inventory counts. What is Physical Inventory Count? Physical inventory counts are a method used in inventory management to track every physical item a company has. Cycle counting often referred to as periodic counting or yearly counting, are two ways to do physical inventory counts. A corporation can find out if there is any loss, or shrinkage, that they can account for in their financial records by performing a physical inventory. Physical inventory counts take place in a variety of companies, although they are most frequent at manufacturing plants, distribution centres, and retail outlets. 4 Major Purposes of Conducting Physical Inventory Count The physical inventory count serves a variety of functions, which includes- Ensuring Accurate Stock Levels Physical inventory levels frequently differ from what digital records indicate. For instance, inventory levels might change in a production setting if a worker takes a replacement item but fails to register it. Employees may unintentionally enter inaccurate inventory into the system when working in retail. Additionally, there have been incidents of stealing, theft, damage, or incorrectly recorded returns, giveaways, or ruined goods. The physical inventory levels go out of sync with the records when this occurs. The resolution of a physical count can explain these differences. Keeping Track of Theft, Damaged Goods, or Internal Problems A corporation can monitor for internal and external theft, damaged items, or internal problems by doing physical inventory counts. Theft, often known as shrinkage in the context of inventory, may make it difficult for firms to stay profitable. Employees must also take proper care of damaged inventory by reporting the damage to a manager or supervisor so that inventory levels may be adjusted and the product can be returned to the manufacturer for a warranty replacement or credit. The need for staff training on inventory protocol, shipping and receiving policies, or manufacturing best practices is just one internal issue that inventory counts might highlight. Reporting Wages and Income Accurate revenue statements and other financial papers may be produced by businesses with the use of adequate inventory levels for reporting. For instance, making actual earnings and precise balance sheet statements depend on maintaining an accurate inventory. The board of directors, top management, and investors of an organization utilize this data to make choices regarding the course of the business. The accuracy of revenue, wages, and inventories is so crucial. Creating a Precise Budget Inventory counts are also used by businesses to assess how much has been sold and how much stock is still available. When determining which things are the most popular, this might give helpful information regarding the inventory turnover rate or how frequently the item sells. As a result, this can assist businesses in developing a precise inventory budget. They may choose which items and how many of each to have on hand. To prepare for the upcoming year's purchases, a retail business can, for instance, do an inventory count on seasonal items. [contactus_lilgoodness] 6 Main Types of Physical Inventory Count Methods The main types of physical inventory counting procedures include- Point Of Sale or Electronic Counting Electronic counting scans and tracks goods digitally using specialized computer tracking software. For instance, many businesses utilize point-of-sale (POS) systems, which enable staff to scan things as consumers buy them. The application automatically subtracts the quantity from inventory as soon as the buyer purchases the item, and the team monitors it through the POS system. The warehouse receiver adds new products to the system when the shop gets them using the same technology to increase stock. POS systems frequently communicate with other types of software, such as enterprise resource planning, accounting, or merchandising software. The firm employees may, for instance, conduct a physical inventory count to ensure that the physical and digital numbers match. Although this technology helps to increase inventory accuracy, the associated fees might raise a company's costs. Employees have time to become familiar with the system and appropriately carry out the operations. Manually Counting Unlike automated counting, manual inventory counting involves staff members writing down the inventory results on paper. The management of a corporation can assign workers as necessary or have a dedicated employee or team perform physical inventory counts. To count, they can go about the shop, warehouse, or storage area to identify the things and add up the amounts, using a spreadsheet or printout of the products. By using this technique, a business might avoid paying for the initial expenditures of building an electronic system. It is also helpful in confirming POS system findings. It's crucial to remember that human inventory counting might produce a range of results based on the size of the business, the accuracy, and the care taken by the counters. Periodic Counting Periodic Counting or Cycle counting is a method of physical inventory counting in small increments over the course of a month or year. For instance, to assure accurate data, a retail shop would tally the most popular produce items each Monday morning. Fourth Tuesdays, the specialized section receives a similar treatment, and so on. The corporation will gain from this in a number of ways. First of all, it enables the business to continue operating rather than shutting down to finish an entire physical inventory count. Additionally, since inventory is constantly counted and faults can be found promptly, it enables any inconsistencies to be resolved sooner. This is advantageous for quickly transporting goods or products that the business wishes to monitor. Many companies choose to perform a complete inventory count once a year, and the regular cycle counts. Complete Physical Counting Companies frequently do a comprehensive physical inventory once a year. Organizations can utilize their own workers to count, engage temporary help, or pay an inventory counting agency to complete this task. Many organizations arrange shelves, storerooms, and warehouses before finishing a complete inventory to make sure that goods are located correctly and are simple to find. Depending on how things go at the firm, the business may temporarily close or stay open on inventory day. Counters can be given inventory lists or spreadsheets by managers, along with instructions on how to record the number of things sold accurately. At the conclusion of physical inventory counting, all counters give in their sheets to the supervisors, who then compile the findings. Spot Counting Spot Counting, Arbitrary Counting or Ad-hoc Counting is a type of physical inventory counting method which is frequently started by the user and is not planned, making it useful in unusual circumstances. Let's say you counted a zone, but a few days later, the system malfunctioned because of someone or some procedure. Instead of waiting for the next cycle count, you can construct a new, empty order and begin adding counted items to it. Of course, your system must be able to compare the quantity that was tallied to the data stored in the programme. Arbitrary counting is sometimes referred to as blind counting since it typically takes place in unplanned, tiny store/warehouse zones or locations. Tag Counting The personnel of the store or warehouse should physically tag each item prior to tag counting. The worker must complete the required slots on the tag with the item ID, counted amount, and other pertinent information during physical inventory counting. Some labels have two sides, allowing an additional worker to check the data and, if necessary, fill in the adjustment on the second side. These tags are gathered and added to the system as journals when the counting procedure is complete. The primary distinction between tag counting and all other counting techniques is that tag counting does not involve a direct comparison to system data. As opposed to just producing a counting order and comparing it to the tag counting list, it is more like creating a rough draught list of your goods and quantities, refining it (e.g., updating with sales that have occurred during the counting), and then comparing it to the final list. How to Take Physical Inventory Count in 12 Easy Steps? A successful retail business is built on effective inventory management. Customers will always find what they're looking for in a well-stocked backroom, and your workers will always have what they need to do their jobs. In the best-case scenario, organized stock supports your everyday operations so that personnel may concentrate on customers. At worst, you're left with a logistical nightmare of missing items and lost sales. Your staff will need to count meticulously, track, and process products on a regular basis to keep your inventory operating correctly. Are they driven to complete the assignment as inventory season approaches, or would they prefer to skulk off? The given steps for counting physical inventory can help you manage stress if you run a retail firm. Check the Date It can be a big deal if you have to manually count your physical inventory every month, every three months, or at the conclusion of a reporting period. It may be necessary to take stock outside of regular business hours because it is a laborious operation. Give your team plenty of warning so they can plan accordingly around their commitments, and be sure to schedule workers correctly, so nobody takes on an opening shift. Post a sign in your store or on your social media accounts informing clients if you need to close your store during regular business hours. The secret is to plan. Assign Your Counters Physical inventory counting needs expertise. Before you allocate your counters, make the position a learning opportunity for both inexperienced and experienced workers by letting them train one another and providing checks and balances along the way. Make a written protocol and include information on how you'll establish a precise cut-off point for stock movement for an accurate count. Count teams typically consist of two individuals: one who counts and the other who records. To make sure that everyone will be accessible at the specified day and time, provide your team with their schedules as far in advance as you can. Notify All Storage Facilities Make sure to inform relevant third parties that they should likewise undertake a physical count of inventory on the given date, whether your organization has merchandise in outside storage or on consignment. To ensure that they are not counted, make careful to separate any recently acquired products. Deliveries to the warehouse should be delayed if at all feasible to prevent variations from occurring during the count. Before starting the count, you'll want everything to be free of clutter. Examine Your Stock A few days ahead of time, check your inventory to make sure everything is in order. Search for objects with missing or partial component numbers and those that are in a state that might complicate the procedure. Adjust your inventory as needed to make it ready for the physical count. Make a Proper Warehouse Plan Make sure your staff has a map of your floor, backroom, and storage, so they know where to go when they need to. A map can let you allocate personnel to their stations more efficiently, whether you need to take photographs or sketch up a plan. Create a tracking sheet for each sector and assign a different number to each display, rack, and shelf. Visualizing your inventory area will reduce confusion and make it easier for your personnel to get started. Make Your Own Category You may count and group comparable objects together with the aid of categories. The categories for a retail setting may be footwear, tops, bottoms, outerwear, and accessories. Depending on your industry, these groups can be further divided based on colour or gender. The counting procedure will be more smoothly executed if a systematic system is created. You'll run into certain things that don't have a designated spot in your store when you're arranging your physical count. It would be best if you made a decision on how to handle objects without a clear home. They can be transferred or returned from other places. Start the Pre-Count Make sure everything is tagged correctly and labelled before the count starts. After all the things have been tallied, failure to deal with stray objects can lead to problems and anger. Start early by counting some of the items. Put the objects that were counted in sealed boxes when the pre-count is done. The goods will need to be recounted if, on the day of the physical count, you discover broken seals on packets that have already been counted. Frequent Reminders Give your staff a review of what they learnt in training before the big day. Walk your staff around the shop if you've relocated any stations or merchandise to prevent confusion. Distribute instructions that break down the counting procedure into simple stages. Despite the fact that there shouldn't be any things without labels or pricing, emphasize the significance of gathering such items in a specific location so they may be handled last. Explain the Procedure Lead by example and demonstrate to your staff the correct way to do a physical inventory count. Give them a sample of a completed form, then have them go over their initial try to ensure the form was filled out correctly. Assign the count teams to various areas of the shop using the map. To prevent double-counting, mark the regions on the map that have been counted. Get Set and Go Counting You may pair off your teams and start physical inventory counting now. The second person completes the count tag using the sample data below after the first person has finished counting: LocationItem informationportion numberQuantityMeasurement unit The team attaches the original count tag to the inventory item, keeps a copy, and turns the tags into the person in charge. The person in charge will verify that all titles have been completed entirely and none are missing. Recheck Your Possessions Perform spot checks in sections to see whether the items were appropriately counted. Take advantage of the chance to verify each section double if this stock audit finds a mistake. It will be worthwhile to double-check the counts that have previously been made. To assure the correctness of the inputs, a data entry team should additionally include two members. Complete the Reporting To add up your computations, record your physical inventory counts on a spreadsheet. Your inventory reports will enable you to find any discrepancies between the physical and book counts so that you can develop a strategy to eliminate them. To find potential patterns, compile physical count inventory records over a specified time period. Is there, for instance, a particular low count spot in your store? Are there any procedures you might strengthen to prevent the loss of goods? Your business should be impacted by your reports and results in all areas, from financing to visual merchandising. 5 Benefits of Physical Stock Counting To maintain accurate and up-to-date inventory records, physical inventory counts are a crucial component. Better sales and purchase estimates may be made thanks to correct inventory records, which also guarantee that you always have the proper quantity of stock on hand. Your consumers will benefit from having a physical inventory taken, and precise physical inventory counts are essential for the reasons listed below. Provides an Accurate Insight into Inventory Levels You will have a far better knowledge of how much merchandise you will need to have on hand to satisfy consumer needs when you effectively manage your inventory. You won't have to worry about running out of supplies all the time, thanks to this. By being aware of your inventory levels, you may prevent clients from making orders for items that are not currently in stock. Without having to worry about keeping too many goods on hand, shortages will be less of an issue. Improves Demand Predictions An essential component of inventory management is demand forecasting. It occurs when you foresee a product's level of demand, the rate at which it will sell out, and the time at which that SKU has to be restocked. A physical inventory check can enhance buying and forecasting of inventories. For example, retailers that see demand forecasting reports that suggest which products to replenish based on their profitability and restock rate can do so in a way that allows them to do so based on both the popularity and profitability of the items. Improves Sell-Through Rate of Slow-Moving Inventory An actual inventory count does more than avoid stockouts. Retailers also reduce the chance of keeping out-of-date stock at the total price for an extended period of time. Retailers should have access to inventory grading data that group items according to their cost per unit, selling price, number of sold units, and overall income over time. Merchants should proactively think about re-merchandising items in-store, advertising them to generate interest, or offering a special discount to encourage sales for those that aren't selling as intended. In order to recover your initial investment and create a place for more in-demand goods that either sell at a larger volume, better profit, or both, it is helpful to move through failing inventory. Reduces Inventory Shrinkage Inventory loss is a frequent and annoying issue for merchants. When your actual stock is less than the amount listed in your inventory management software, this occurs. Theft by employees and shoplifting are the two main reasons for stock shrinkage. A weekly partial inventory count, for instance, can assist retailers in identifying discrepancies between a store's actual inventory and the inventory levels recorded in its point-of-sale system with a smaller sample size of inventory that is easier to count (one particular product category, for example), giving them enough time to determine what caused the shrinkage and reconcile it. Prevents Overstocking and Understocking Lack of physical inventory tracking can lead to carrying too much (or not enough) goods, which could lead to budgetary concerns if not maintained under control. Overstocking, often known as the gap between available inventory and demand, has resulted in markdowns totalling more than $300 billion. Discounting at scale leads to lost income because of lower-than-expected margins on each transaction, despite the fact that it has valuable use cases. You can allocate enough money to inventory to satisfy demand without overstocking or understocking by maintaining an accurate inventory ledger and using the information from your POS system to understand better how well-liked the products you carry are with customers. 7 Best Practices to Implement for Counting Physical Stock Make a Map of Your Shop, Warehouse, or Stockroom Make a map of the locations where your inventory is kept, whether it be on your shop floor, in a stockroom, or in a warehouse, as part of your preparations. Label each product category's location and the person in charge of counting it on the map. This will aid store employees in getting their bearings and assist the manager you assigned to maintain track of who is in charge of what. Give each employee a list of the SKUs they will count in their assigned region as well. This may be a helpful tool when they scan product barcodes and enter their count into the POS system. Box and Shelf Labels Label shelves and boxes according to the things they hold and make sure the contents of each are located where they should be according to a map of your store. The shop map you made in the previous step should be reflected in these labels. Prior to the inventory count, it will be easier to stay organized and save time when it comes time to account for the miscellaneous things if boxes and shelves are proactively labelled and products are placed in their proper locations. Clean the Locations Where You are Counting Make sure there is enough space for employees to count large quantities of items in each location designated for stock-taking. Get rid of any boxes or inventory items that are unnecessary. Any freestanding furniture, such as mannequins or display cases, should be moved to one side. Use Barcode Readers While it is possible to hand count the objects, teams are more prone to make mistakes. For quicker and more accurate counting, choose barcode scanners. Store employees scan the barcode on the product's tag, and the inventory levels connected with that product's SKU are automatically entered into the POS system as opposed to each product having to be manually counted and recorded in a spreadsheet or on paper. Miscounts are unlikely unless the store employee scans the exact same item twice. Barcode scanners are necessary for teams charged with counting enormous volumes of merchandise. Setting a Time When Counting Will Be Handy Setting a deadline for your inventory count is worthwhile. Depending on how many things you carry, performing a physical count can take one business a whole day and another just a few. In either case, giving oneself too much time is preferable to not enough. Additionally, some retailers choose to conduct nighttime inventory counts, appointing a team of staff to enter the premises during off-hours. Just bear in mind that in many areas, paying employees more for midnight labour than for a shift during regular business hours is the norm. Train and Inform Staff Members Before beginning a comprehensive physical inventory count, take the time to teach and instruct your store personnel on how to perform it. To count inventory and record outcomes, every member of your team should be able to operate a barcode scanner and your POS system. Spend some time outlining the typical difficulties they may encounter. What happens if a tag is missing, a product is defective, or a label is mislabeled? To ensure that staff members know what to do in each instance, share the solution and the procedure you've put in place. Utilize Technology for Physical Inventory Count Pen and paper counting takes more time than electronic counting. It's simple to make a mistake when counting, leading to erroneous inventory data. Additionally, a physical stock count across many retail locations will generate more data that will require much more time to process and understand than if everything were recorded using inventory management software. Inventor management technology provides solutions to these issues. Inventory reconciliation is sped up, and merchants have a single source of truth for both their financials and inventory when they scan products since the point of sale system will automatically register inventory levels for that SKU. Suggested Read: Physical Distribution in Supply Chain Management Conclusion In conclusion, it is crucial to perform routine physical inventory counts even if you have an inventory management system in case-specific procedures are not operating as effectively as they should. Inventory counts assist you in reducing unexpected shortages and identifying which internal processes need to be changed to enhance your business operations as a whole. Improve Your Physical Inventory Counts With WareIQ One of the top providers of inventory and data collecting services is WareIQ. We offer physical inventory counting, merchandising, and space optimization services to the majority of large retailers across the nation using our warehouse management software and professional team. The integrated, one-handed inventory count terminal and eCommerce fulfilment services and warehouse management solutions are the technological advancements for which WareIQ continues to hold an excellent reputation in the market. This will not only handle your complete inventory but also make doing an inventory count simple by offering a section just for counting your inventory and notifying you right away if there are any shortages or overages. [signup] Physical Inventory FAQs (Frequently Asked Questions) Why is the physical inventory count performed?The Inventory account balance is updated to reflect the actual amount of accessible inventory using the physical count. To ascertain whether there have been any theft, loss, damage, or inaccuracies in inventory, a physical count is performed. How frequently should physical inventories take place?At the very least once a year, a physical inventory count should be done, however more regular inspections might be helpful. You may ensure that your inventory and your records match by frequently verifying your stock. Additionally, you'll be able to see any issues with your record-keeping practices. How are physical inventories managed?Wireless inventory scanners make it simple to scan a product wherever it is stored using barcodes to distinguish between each SKU type. You can simply monitor things by SKU, know how much is in stock, and identify every SKU in a warehouse by adding a barcode to your product tags or packaging.
July 07, 2022
B2B Fulfillment: A Detailed Guide Including Definition, Processes, Differences with B2C Fulfillment and Use Cases of B2B Order Fulfillment in 2022
Understanding the differences between B2B and B2C fulfillment and the roles they play in the supply chain may be difficult at first if you're new to the industry. Both of them deal with inbound and outbound logistics processes. B2C fulfillment focuses on smaller orders, whereas B2B fulfillment is primarily concerned with less frequent orders but larger product quantities. B2B fulfillment is also subject to stricter rules and depending on a number of variables, the costs involved can be much higher. Compliance regulations for B2B businesses may include tax laws, product limitations, SKU codes, shipping labels, barcodes or a particular invoicing system. Shipments might be anticipated to cost more and take longer to arrive because orders are larger and bulkier. Let us look at the ins and outs of B2B order fulfillment and how it should be done to get better results. What is B2B Fulfillment? B2B eCommerce fulfillment is the process by which products are transported directly to a business or another retailer. Orders are often placed in bulk so that the receiving company can have adequate inventory to sell. Businesses usually order in advance and in large quantities to save time and money by avoiding the need to constantly place purchase orders. If you decide to use a 3PL to fulfill your B2B orders, they should prioritize reliable and quick delivery. eCommerce sellers need these fulfillment providers to be optimized to enable cost reduction and greater efficiency because of the nature of B2B order fulfillment. They are essential to be able to fulfill orders on time. A 3PL's delays and poor management might result in penalties, refund losses that they would be required to provide and damage to the reputation of the company they represent. [contactus_lilgoodness] Working Processes of B2B Fulfillment The B2B eCommerce marketplace or B2B sector is solely concerned with transporting goods to other companies and shipping in bulk to avoid purchases on a frequent basis. It includes providing goods to other businesses for resale, including to numerous big-box retailers. The B2B fulfillment process is handled by fulfillment centers, which critically emphasize speedy shipment. In B2B fulfillment companies, quick shipping is always vital but there are times when efficiency must be prioritized over providing excellent customer care. A factor for focusing on fulfillment speed is the complicated routing processes that warehouses must follow. B2B fulfillment regulations are very complicated and can result in severe losses, if not followed. It can be very stressful to deal with chargebacks to fulfillment facilities for improperly following the correct procedures. Electronic Data Interchange, also known as EDI, is required by many big-box retailers for B2B fulfillment centers, in addition to compliance with barcodes, shipping labels, and invoices. As a result, B2B fulfillment is far more difficult to complete than B2C fulfillment. B2B vs B2C Fulfillment: Key Differences [table id=37 /] Use Cases of B2B Fulfillment for eCommerce Businesses Due to the benefits that many firms are realizing from online product ordering, the B2B eCommerce fulfillment market is expanding. Now is the best time to provide B2B products if you want to grow your e-commerce company, get a competitive edge, and enhance B2B fulfillment services. Businesses With Small Products Maybe you get shipments of a few wholesale orders to your different small stores each month. If so, you might not require a B2B fulfillment-focused warehouse. Like big-box merchants, small shops do not need to have tight inbound freight needs. If your products are small, you can ship wholesale orders by a common carrier. This B2B fulfillment can likely be handled by your B2C fulfillment center. Businesses With FTL Orders B2B fulfillment services are required if you ship LTL or FTL (full truckload) orders. You will need to create a B2B fulfillment protocol if you have an account with a major retailer. It is crucial to complete the paperwork correctly, and doing so can be expensive. Put your B2B fulfillment plan in place even if you don't yet have the necessary accounts, in case your business plan includes selling to major chain retailers. You'll be prepared to act when you get a big wholesale account. Online Wholesalers The market for wholesale eCommerce is expanding. To more easily access the wholesale market, several internet retailers are launching online wholesale stores. Although wholesale margins are smaller, you can compensate for it by placing bigger orders. A small number of lucrative wholesale accounts can significantly increase your profit margin. In general, customer service is less necessary in B2B sales. Additionally, a happy B2B customer will frequently place additional orders, saving you the occasionally high customer acquisition fees for retail consumers. Are you interested in expanding into the lucrative B2B market? You can grow your firm to new heights with the assistance of outsourced logistics providers. Setting yourself up for B2B fulfillment will pay off in the long run for your company. Conclusion: Role of WareIQ in Helping eCommerce Retailers With B2B Order Fulfillment Do you require specialized B2B fulfillment for your eCommerce business? If you have a variety of customers, including other businesses, then yes. It would be helpful to partner with a third-party logistics firm, whether you distribute primarily to customers or other retailers. While managing your inventory and selling processes, WareIQ also helps you to secure the right amount of inventory from the best manufacturers, wholesalers and other merchants. When it comes to B2B order fulfillment services, accuracy is the most important factor and with WareIQ, accuracy is guaranteed with our extensive use of advanced technology such as our custom WMS. WareIQ can help you forecast demand, determine how much inventory you need to store at a time and can automate your reorder process, in addition to managing your inventory. B2b Fulfillment: FAQs What is the meaning of B2B in logistics?Instead of items being supplied directly to the end-user or consumer, a business-to-business service involves one or more commercial transactions between two businesses. The majority of companies rely on B2B service providers to deliver a positive customer experience. What is B2B warehousing?B2B order fulfillment entails shipping large numbers of orders to companies. A typical form of B2B fulfillment involves wholesale orders that are shipped to merchants for resale to consumers. What is B2C fulfillment?Orders that are sent directly to an end-user rather than a company or other entities are referred to as B2C fulfillment. How do B2B companies earn profit?Businesses frequently purchase products in bulk from manufacturers or wholesalers at a lower cost with the intention of reselling them at retail prices. Which four forms of B2B exist?The B2B marketplace is generally divided into 4 categories: 1. Producers2. Resellers/retailers3. Governments4. Institutions
July 06, 2022
What is Dropshipping? How Does Dropshipping Business Model Work? [Detailed Guide in 2023]
Most likely, if you're looking for an online business opportunity, you've heard about dropshipping. For the aspirant e-commerce business owner, dropshipping model is a profitable online business concept. This business can be started with a minimal amount of initial money and some labour. Then, when you begin to experience success, you may grow by devoting additional resources to branding and promotion. In 2019, the global dropshipping market had a value of $162.44 billion. As per a leading research agency, the dropshipping industry is projected to be worth a whopping $591.77 billion by 2027. From 2020 to 2027, the market is projected to expand at a CAGR of 18.3%. How did the concept of dropshipping begin? Dropshipping was first introduced in the 1960s when customers could purchase products from the catalogues they received in the mail. A warehouse would deliver the goods you choose when you place a call and specify where you want them delivered. How does dropshipping operate, and why should you use this strategy to fulfil your business aspirations? You must understand the definition of dropshipping before moving ahead. Read our blog on dropshipping vs order fulfillment to find out which model is right for your business? What is Dropshipping? Dropshipping is a retail fulfilment for online retailers where merchants buy goods from outside suppliers as consumers place orders rather than storing inventory. After that, the merchandise is delivered right to the customer. In this manner, the seller is relieved of direct product management. Sounds recognizable? The shipping and order fulfilment process is hands-off, mainly for a retail store manager. The retailer is not required to have stock on hand, place large orders for goods, or physically complete any orders. Instead, the third-party logistics or vendor will handle the merchant's goods shipping. Read the blog on dropshipping vs 3pl to understand the key differences. Dropshipping is advantageous for business owners since it requires less operating capital to operate a store than the conventional retail model. For example, you don't need to start a brick-and-mortar business, employ staff, maintain lighting, pay expenses, or carry inventory. Instead, you set up an online storefront and purchase bulk from suppliers with inventory and storage facilities. Who is A Dropshipper? A manufacturer or supplier who handles inventory for a retail merchant and sends orders to their customers is a dropshipper. Since the merchant is mainly in charge of bringing clients to the business and handling orders, you will essentially be acting as a middleman. Despite this, you will make most of the money by adding a markup to the things you sell. It's an easy business strategy that has the potential to be incredibly lucrative. Due to its minimal entrance requirements and inexpensive startup costs, dropshipping is a popular business model with millions of businesses. You're curious for that reason. However, the most exciting news is that this business model enables you to launch a viable long-term business from the comfort of your laptop. Before launching your own dropshipping eCommerce fulfilment business, it's critical to consider this business strategy's challenges, benefits and disadvantages. But once you know the advantages and disadvantages, mastering this business model will be simple — especially with the fantastic modern-day tools offered to entrepreneurs! A Complete Overview of Dropshipping Order Process Having established what dropshipping is, let's examine the procedure in detail. The supply chain in this business model is the path a product takes from a manufacturer to a client. The chain technically starts with the mining of the raw materials. However, concentrating on the major players - manufacturers, suppliers, wholesalers, and retailers- will be enough to comprehend the dropshipping model. There are three prominent players in the dropshipping supply chain- Manufacturer The person who makes the things you dropship and sells them in bulk to suppliers and wholesalers. You can choose to have your purchases sent straight from the makers. So, for instance, you may get in touch with manufacturers at Alibaba rather than going to AliExpress to search for suppliers. As a result of skipping the supplier, you will pay less for your goods in this manner. Additionally, you will be able to alter your logo slightly. The issue is that manufacturers typically have minimum order requirements that you must satisfy. This entails making a sizable initial financial investment, which might be problematic when you're just establishing a drop shipping firm. Supplier OR Wholesaler A supplier or wholesaler is the individual who purchases goods from producers and resells them to retailers. Suppliers frequently focus on a specific industry, making it simple to locate the goods you want to sell. The goods are a little marked up. It is far more convenient for you because their purchase minimums (if they have any) are often significantly lower than those manufacturers impose. Retailer You are the one making the direct sales to the consumer. Your consumers' place of purchase is here. Your job is to ensure your profit margins are high enough for you to make money but not too high that your potential consumers would select your rivals after the product has gone through the supply chain and been marked up numerous times. [contactus_uth] Process Of The Dropshipping Business Model Let's examine the procedure for handling a dropshipping order. For example, we'll use a hypothetical order placed with Laptop Outlet, an online retailer specializing in laptop accessories. All of the products sold by Laptop Outlet are dropshipped from its pet supplier. Here is an illustration of what the whole ordering procedure may entail: Source Step One: The customer places an order with Laptop Outlet in step one. The customer uses the laptop outlet's online store to order a new laptop for his professional use. However, several things take place after the order is approved. The store's software automatically sends an email confirmation of the new order to the customer and laptop outlet. Payment from customers is taken during the checkout process and is immediately put into the bank account of the laptop retailer. Step Two: Place an order with a supplier through a laptop retailer. Usually, all required to complete this stage is for the laptop retailer to transmit the email order confirmation to a wholesaler salesperson. The wholesaler will charge the laptop outlet's credit card on file for the wholesale price of the products, as well as any shipping or processing costs. Step Three: Delivery of the order by the wholesaler If the product is in stock and the wholesaler successfully charges the laptop outlet's credit card, they will package the order and send it straight to the consumer. Even if the cargo comes from a wholesaler, the packing slip and invoice will have the outlet's name, address, and logo. In addition, the wholesaler will provide the laptop outlet with an invoice and a tracking number once the shipping has been completed. Step Four: The consumer is informed of the shipment by Laptop Outlet. The laptop outlet will likely use an email interface embedded within the online shop interface to provide the consumer with the tracking information once it has received the tracking number. The order fulfilment process is finished after the order is dispatched, the payment is received, and the client is informed. 7 Common Dropshipping Challenges for eCommerce Retailers in 2023 Unquestionably, dropshipping products is one of the most extraordinary developments brought about by the internet and our new way of life. With this new business model, savvy entrepreneurs may enter the e-commerce market with less funding and still make progress. Although this business model provides many advantages, there are also some inherent difficulties. Dropshippers must manage the challenges that the business model presents as entrepreneurs. Here, we'll go through seven of the most typical problems with dropshipping and how to fix them- Order Processing Delay Customers anticipate that their orders will be completed as quickly as feasible when purchasing from your e-commerce website. Most clients are unaware that, in most cases, you have little control over how fast you execute their orders. Sometimes, a producer's order that you've previously placed will be delayed. As clients wait for their tracking code, the delay may cause some irritation to them. Let it go quickly. Contact your provider to resolve the issue if you don't hear back from them within 24 hours of making your purchase. Then, you will at least know why the order hasn't been handled and how long you have to wait. Supplier Compliance and Transparency Your consumers will hold you accountable for the quality of the products they purchase from your store since you are the face of your company. Even if you have nothing to do with creating and packing the products you sell through dropshipping, you are still in charge of them. A robust service level agreement (SLA) with your suppliers is one method to manage this difficulty. You must be very explicit about what you anticipate from them regarding adhering to the agreement. The SLA should also be detailed about the repercussions of breaking it. Consider every client complaint seriously and look for measures to confirm that your providers are constantly following the SLA requirements. Delivery to the Wrong Address Some orders are sent to invalid or incorrect addresses, as unpleasant as it may sound. You could also have to deal with that as an e-commerce business owner. Preventing address errors on your end is the easiest method to deal with this issue. You must double-check the address you submit to the supplier for every order. Some kind of documentation should support any shipping address you provide. Returns of Products In e-commerce, you can't get away from this. Since dropshipping usually involves a third party, it is rarely ever your responsibility. You cannot also set all the rules in this place. You must discover ways to explain suppliers' various return policies to your consumers. Remember that your consumers will come to you rather than the provider. On your website, be explicit about your return policy. Make all necessary efforts to ensure that the procedure is simple for your consumers. Handling Finances Even though dropshipping needs very little initial commitment, sound money management is essential if you want to make money over the long haul. Keep track of the profit made from each sale, and if your present line isn't bringing in the desired amount of money, don't be hesitant to look into different product options. Additionally, you must regularly review your business alliances. Then, you might be able to locate a new vendor who provides the same goods at a lower price. This level of customization is essential for optimizing your earning potential. Finally, take taxes into account while calculating your budget. Because sales tax computations are partially based on the supplier's location, dropshipping makes taxation a little bit more complicated. Supplier Issues Finding reliable suppliers is the first big problem most dropshippers encounter. Many producers and sourcing firms might act as your suppliers, but you need to agree on the partnership's specifics. Next, you must locate reliable vendors who can maintain the calibre of their vendors. In practically any niche you pick, finding suppliers is not too difficult. You may find a lot of materials to aid you in your search. Just make sure the provider you choose can accommodate your demands. Think about supplier costs, order minimums, industry-specific expertise, and scalability. Running Low On Supplies Even if you are already in business, this might still occur. It is one of the most widespread issues and is more common during particular seasons. Additionally, organizations with just one supplier are particularly impacted by this issue. If you are dealing with a huge producer and order fulfilment company, you might not feel the full effects of running out of stock. Even if you look for alternate ways to complete customers' purchases, you must notify your clients as soon as you run out of stock. It is wise to use many suppliers. Like other business concepts, dropshipping has several difficulties. These seven are typical and are covered here. However, overcoming them can assist you in expanding your e-commerce firm in various ways. Benefits and Drawbacks Of Dropshipping Model A straightforward approach for potential business owners to get started in e-commerce is through dropshipping. You don't need a pricey degree from a business school or a lot of money to enter the industry. You also benefit from the trend of consumers favouring e-commerce over physical storefronts. Despite the considerable flexibility of dropshipping, there are several drawbacks. Let us examine the advantages and disadvantages of this business model to determine if this business strategy suits you. 7 Advantages Of Dropshipping Business The following are some of the benefits of becoming a dropshipper. Easy To Setup Starting a dropshipping business doesn't require any prior business expertise. You can establish a business fast and pick up the rest of the knowledge as you go if you take the time to understand the fundamentals. This business is simple to launch since its startup expenses are inexpensive compared to other retail company models. For instance, you don't need a crew or a warehouse to keep your items. Additionally, you don't have to bother about shipping or inventory. Surprisingly, once you get rolling, it's hands-off. Low Startup Costs Businesses that use dropshipping strategy don't have to spend money on stock purchases or setting up a place to store it. Additionally, they are spared the time-consuming tasks of inventory organization and staff hiring for order fulfilment. As a result, dropshipping has a shallow entry barrier since anybody may start this business even if they lack the financial resources required to operate a regular retail firm. Scalability Because order fulfilment is not reliant on the size of a physical location or the number of employees required to ship an order, dropshipping retailers may grow swiftly. Dropshipping may thus be quite advantageous for merchants whose sales fluctuate due to seasonal variables or other considerations. Easy To Manage, No Office Is Required You may run an entire business from your laptop without needing to make any significant financial commitments. Your most considerable outlay will be advertising, which you may increase as your store's popularity grows. Your expenditures will be cheap, especially compared to typical business expenses, even as your organization expands. Minimal Inventory Management Costs This Business model lowers the administrative burden that retailers must bear by doing away with the requirement to retain physical inventories. In addition, because shipping is outsourced to suppliers, they do not have to spend time maintaining or tracking the merchandise's infrastructure. Numerous Product Offerings This business model lets you expand the range of products to sell. As a result, retailers can carry a broader variety of goods, enabling small businesses that would not otherwise be able to provide as many alternatives. Flexibility Dropshipping gives a retail firm more freedom in a variety of areas. For example, a brand may operate from any location, provide a variety of items, and simply modify its selection as consumer tastes shift. 4 Disadvantages of Dropshipping Model and Strategies to Avoid Them Shipping goods from independent vendors have inherent drawbacks, just like any other company strategy. Shipping Might Become Quite Challenging Calculating the delivery expenses is simple if you buy your items from one provider. Dropshippers typically employ many suppliers for various things, though. When many goods from the same purchase have varying shipping rates, determining the delivery costs becomes slightly more challenging. Additionally, various vendors could use different invoicing methods. The Solution Start with a single provider and add more later. Limited Ability To Regulate Branding When you dropship things, there isn't much you can do to customize them. Yes, you can have a well-designed website with excellent product descriptions. However, if you want to take branding to the next level, you may organize professional photography of your items. You can't do anything about the packing or the instructions that come with the items you sell, like most dropshippers. The Solution You may decide to dropship your goods from an online retailer like Alibaba. This website enables direct product shipment from producers. In this method, you may get in touch with manufacturers and ask them to add your brand name (if you want one) or alter the packaging of your goods. Since adjustments frequently need the minimum order quantity (MOQ), be aware that you will be asked to pay extra up front. But you may always practise your negotiating abilities! Customer Service May Be Annoying Up until a client complains, it's fantastic that you don't have to handle inventory management yourself. After that, however, you are responsible for the suppliers' failures to fulfil your requests. Therefore, to prevent receiving unfavourable evaluations, be prepared to apologize profusely and offer top-notch customer service. The Solution If the goods are damaged, you may send your client to the supplier for assistance. You'll need to track the shipment with your supplier. That is why choosing a reputable supplier is crucial. Additionally, you might wish to spend money on software enabling online shopping and connecting you with clients. To be more effective, use can use Shopify applications with customer support. Profit Margins Can Be Pretty Low You'll probably encounter a lot of competition due to the low admission criteria. So keep your pricing as low as possible to stay alive until you establish a strong clientele. The Solution However, many business owners that maintain extremely low margins don't consider how their store seems. You must outperform your competition in marketing if you want to win over potential clients. Make your business appear legitimate, and customers will be willing to pay a little more for your products. Conclusion Dropshipping involves practice, careful preparation, and study. However, entrepreneurs still choose it since it is the simplest method to launch an internet business and is fantastic for testing new product concepts. Moreover, you may try your hand at eCommerce with little risk because it needs little initial cash. Dropshipping may be combined with various useful tools and services that can simplify and automate some of the more challenging portions of the process while avoiding some of the issues we've covered in this essay. With the help of these resources, you can focus on creating effective marketing strategies and building your brand to maximize earnings. [signup] Frequently Asked Questions What distinguishes a drop-ship order from a standard charge?Since sellers don't own goods, dropshipping differs from the conventional retail business model. Instead, a third party, such as a wholesaler or manufacturer, fills the order after the buyer makes a purchase. How do drop shippers make money?Businesses that dropships serve as product curators by choosing the ideal assortment of things to sell to clients. Keep in mind that marketing is an expense you expend to assist potential consumers in discovering, evaluating, and purchasing the correct product. Every time there is a problem with a product or shipment, you'll additionally need to account for the expense of giving customer care. The initial price that your supplier offers the item for is last but certainly not least. How much money do drop shippers typically make?The target market and the niche determine the average monthly income. Seasonal variations, market trends, your marketing plan, etc. are just a few of the variables that play a role. Typically, drop shippers may earn between $1,000 and $50,000 per month or 10 to 40 per cent profit on each transaction. A dropshipper should strive to make a profit margin of at least 20% on each sale of a dropshipped item. What is branded dropshipping?Selling unbranded goods obtained from suppliers without keeping any inventory is known as branded dropshipping. Here, dropshippers can privately label the goods and create an online store with a product theme using their own brand. What distinguishes e-commerce from dropshipping?The selling merchant serves just as an intermediary, which is the main distinction between dropshipping and the traditional e-commerce retail business. Instead, to fill orders, the seller buys inventory as needed from a third party, typically a wholesaler or manufacturer. Is Dropshipping business model legal in India?Dropshipping operations are entirely legal, secure, and safe in India. With the seller's consent, the drop-shipper is selling goods and items under this business. Therefore, it is not against the law. Additionally, conducting this company is legal as long as you abide by all applicable laws that are in effect in the nation. In reality, it is popular right now since the majority of buyers and sellers are moving to online marketplaces. Is it worthwhile to launch a dropshipping business?The main advantages of starting a dropshipping business are a low risk, lack of financial commitment, and lack of investment. It is a sort of independent work done at the seller's discretion. According to consumer preferences and market trends, the drop shipper can explore new markets and provide new items. There is no turning back in this industry if the adequate study is done on the goods to be sold and the suppliers to deal with.
July 04, 2022
What is Sell Through Rate in eCommerce and How Can it Impact Your Business in 2022?
Most eCommerce sellers attempt to manage their inventory in the best way possible but while many of them spend a lot of time on inventory costing techniques, they neglect to consider how effectively the inventory is flowing through their supply chain. A high sell through rate indicates that you are placing the proper amount of orders in relation to demand for those goods. However, a low sell through indicates that you have ordered too much of a product. In many cases, your demand forecasting, purchasing or pricing strategies are fundamentally flawed. Let us get a detailed understanding of what sell through rate is in eCommerce and how it can impact your business. What is Sell Through Rate (STR)? Sell through rate or STR is the ratio of inventory received from your manufacturers during a given time period to inventory sold during the same time period. Your STR is a performance metric that compares monthly sales to a predetermined goal. You can track sales, modify your objectives and maintain supply-chain efficiency by measuring the sell through rate of your company. STR varies depending on the industry and organization but ideally, a rate of at least 80% is preferable. [contactus_gynoveda] How to Calculate Sell Through Rate? Sell Through Rate Formula To calculate your sell through rate, you need to total your sales during a specific time period and the total amount of stock available for sale for that same period. You can calculate STR using the sell through rate formula which is as follows: Sell Through Rate (Percentage) = (Total Sales / Stock on Hand) x 100 You can calculate your sell through rate weekly, monthly, quarterly, half-yearly or annually, depending on your sales goals and target time to achieve it. Real-World Example Suppose you sell electronic items. If you order 250 Bulbs for July, you would want to calculate your sell through rate at the end of the month to understand what your sales figures are. If you sell 200 bulbs out of 250 then your STR is: =(200/250) X 100 =80% Hence, your sell through rate for July is 80%. Why is Sell Through Rate Important? The sell through rate is important for several reasons: Helps Discern Your Best Performing Products Your sell through rate is more than just a general indicator of total sales. STR is frequently determined by the supplier, product line, store location and other factors involved in eCommerce retail. As a result, your STR is a useful tool to assist in your understanding of the most popular products. Utilizing this data will enable inventory optimization and a more accurate assessment of consumer demand. It will also help you to focus on refining and promoting those products to generate more revenue. Assists in Calculating Your Inventory Holding Cost A low sell through rate highlights inaccurate forecasting of your goods and possibly under-utilisation of storage space. To learn more about how you can reduce your storage costs, you can calculate STR. Stock that will soon expire or that will become obsolete due to changing seasonal demand can make overstocking even more expensive. The unsold inventory occupies space that could be used to store goods that are highly in demand. You can decide on the amount of storage space you need by taking into account storage expenses versus anticipated transportation costs or losses from stockouts, both of which have increased significantly during Covid-19. Helps in Segmenting Your Supply Chain Unexpected delays frequently occur in different stages of the supply chain, especially during COVID-19. Manufacturers, vendors, retailers and customers are all attempting to compensate for supply cycle bottlenecks. Many businesses make up the difference by placing excessive orders or overstocking before they know whether products will truly be profitable. Your STR gives you clarity on sales trends so you can collaborate with your suppliers to order the appropriate goods in advance and stock up on high-selling items. Assists in Determining Your Targets Every retailer has sales objectives and they will differ for each depending on multiple factors. Setting goals enables you to monitor performance, hold sales representatives responsible and inspire your team and other colleagues. Sell through rate measures your targets and enhances sales via suppliers, product lines, store locations, sales channels and other factors. STR can be used to analyze sales from any angle and gain a better understanding of how various aspects of your retail operation are doing so that you can accurately frame your targets and meet your objectives. Helps With Managing Capital An important tool for comparing your revenue to the cost of goods is your sell through rate. A decreasing STR over time indicates that you are spending more money than you are bringing in. On the other hand, as you alter your inventory orders and storage expenses, a growing STR indicates that your profit margin is increasing and will keep doing so for the foreseeable future. 5 Ways to Improve Your Sell Through Rate If you have determined that your sell through rate is poor after calculating it, here are some strategies for increasing STR and expanding your clientele: Maintain Accurate Inventory levels The practice of buying goods in bulk and then putting them aside until they are needed is no longer viable for retailers. A product has a minimal possibility of making a profit when it is sold after being on the floor for ten weeks or more. If your sell through rate is steadily declining, you might want to think about lowering your inventory levels. Slow-selling products could be eliminated or reduced in quantity and you could stock up on high-demand products that will increase your revenue and profit margins. Make Sparing Use of Discounts The quantity of stock you initially ordered may be the reason your sweaters aren't moving as quickly as you'd like, even though you're not selling them at full price. Post the end of a particular season, most items are not sold as frequently and now you have to wait for a whole year to sell them, which will most likely cause them to become obsolete. Suppose a product is out of stock, business is slow or you only have a few of the less sought-after sizes left, discounting current products makes sense to make space for new inventory. Although it could seem like an appealing strategy to increase sales, keep in mind that you'll also be lowering your profit margins. You should use discounts and promotions rarely and if you do run them, keep the break-even threshold in your mind. Forecast Demand How much merchandise you sell in a specific time frame depends on the season. For instance, the sell-through rate of school shoes in December is likely lower than it is in May. Similarly, woolen items' sell through rate in May is much lower than it is in December. Your STR may showcase a few product lines that are out of season even though it doesn't take seasonality into account. Demand forecasting can be used to fix this. Use Social Media More customers translate into more sales and an increased sell through rate. Make a list of prospective marketing tactics to raise the profile of your retail establishment. Consider working with major retailers on campaigns that promote your brand and merchandise to attract new clients, potentially through branded or merchandise-specific retargeting, advertising or Instagram posts and stories. Use social media tools to increase awareness, such as the "swipe up" feature on Instagram (alternatively you can sell on Instagram also) stories or Facebook's shopping ads. This makes it possible for customers to access your product page directly, increasing the likelihood that they will convert. Working together with an influencer or group of influencers who are relevant to your audience will work more. Make Use of Bundling Combining two or more products to be offered for sale at a discount is known as bundling. Product bundling is frequently used by retailers to increase cross or up-selling and lessen the "pain of paying." It's also a wonderful way to sell surplus inventory and slow-moving items, particularly if your products are close to expiry or become out fashioned rapidly. Sell Through Rate vs Inventory Turnover Rate [table id=34 /] Many shops have attempted to make the connection between the two figures or, more specifically, to determine whether inventory turnover and sell-through are correlated, but it is pointless. Manufacturers frequently devise special advertising campaigns or promotions to boost the sell through rate of their goods at the retail level. They will help a retailer move items out of their store using specialized funding known as cooperative funding (co-op). They can be used as advertising funds or, in some cases, as actual cash to mark down your inventory. Conclusion A high sell through rate indicates that you are placing the proper amount of orders according to demand and a low sell through indicates that you have ordered too much compared to demand. One of the best ways to optimise your sell through rate and get a better understanding of how to maintain inventory levels in relation to demand is to partner with a 3PL company like WareIQ. WareIQ employs the use of a custom WMS that gives you access to historical data and all the metrics you need to measure your sell-through rate. We can also help with demand forecasting and suggest the optimum amount of inventory you need and which fulfillment center location it would be best suited for. We also help in determining your EOQ and MOQ to always have the appropriate amount of inventory on hand. In addition, we handle multiple other processes involved in order fulfillment such as storage, inventory management, delivery and returns, and also provide access to our advanced technology and applications through our custom app store. Sell Through Rate: FAQs What is a sell-through agreement?For large shops, a sell through agreement is a set of guaranteed sell-through functions like an insurance policy. For example, a designer is compelled to sell a specific percentage of their products at full price when they have a sell-through agreement. What is sell-in vs sell-through?Sell-through refers to sales that actually reach the customer. Sell-in refers to product transactions that are kept on shelves that customers may or may not choose to purchase. How do you calculate the sell-through rate?STR is calculated by dividing the quantity of units sold by the quantity of units received and then multiplying the result by 100. Every 30 days, most shops calculate their sell-through rate. What is a good sell-through rate?Industry and organization specifics vary, but as a general rule, a sell-through percentage of at least 80% is preferable.
July 04, 2022
What is Shopping Cart Abandonment? Top 10 Strategies for Reducing Cart Abandonment Rates in 2022
The most disappointing thing that a seller can experience is when a buyer shows genuine interest but doesn’t end up purchasing anything. It reflects a loss of all the resources and time that is dedicated by the business. Shopping cart and checkout abandonment are all too prevalent among online buyers in the modern eCommerce space. Data shows that the current average shopping cart abandonment rate is more than 70% in India, which is severely eroding retail revenues. As a result, many retailers have made reducing shopping cart abandonment a top priority and are investing increasing amounts of money in doing so. Fortunately, there are a number of approaches and personalization techniques that aid in abandoned cart recovery and boost returns. Let us look at it in detail. What is Shopping Cart Abandonment? Shopping cart abandonment happens when a potential consumer begins the online check-out procedure for an order but leaves before making a purchase. A commodity that is added to the shopping cart but never purchased is regarded as having been "abandoned" by the customer. In simple terms, it is the same as a customer going to a store to buy products, choosing which ones they want and are about to have them scanned, but suddenly decided against it. In a real-world scenario, a shop attendant can inquire if there are any issues and recommend them better and cheaper products. [contactus_uth] How to Calculate Shopping Cart Abandonment? To calculate cart abandonment rate, you need to divide the total number of completed transactions by the total number of created carts. Subtract from one and then multiply by 100. The formula is as follows: The total number of transactions initiated. This will show you your rate of shopping cart abandonment over a given time frame. For instance, you can take into account all of the transactions from the previous month or quarter and split them by the number of completed transactions or the goods that customers added to their carts but did not end up purchasing. For example, if you have a total of 500 carts created and 120 completed purchases, the cart abandonment rate is 76%. The 3 Stages of Shopping Cart Abandonment Pre-Abandonment It might be challenging to determine visitor intent during the pre-check-out stage because they might simply be browsing your website without making a purchase decision. In some cases, factors contributing to their final abandonment may be related to the user experience. No one will purchase from your website if it appears to be shady or fraudulent. A reliable website can influence users' behaviour significantly by lowering hesitations and fears. The usability of a website that is simple, transparent and convenient can frequently convert a potential buyer into a loyal customer. Both internal and external aspects of the eCommerce experience, including security seals, shipping procedures, customer testimonials and more, may have an impact on the trustworthiness of your business, as determined by customers. Buyers need to feel secure when making purchases from a website. Broken links, poor image quality, inaccessible sites and site timeouts can make visitors lose faith in your company and their ability to make wise purchases. Three efficient strategies to encourage trust in your business and develop confidence in your site include displaying well-known verification seals and logos, making customer product reviews easily accessible and providing complete disclosure on security standards. According to a study, unanticipated expenses, like expensive delivery fees or additional prices, are the main reasons for cart abandonment. Preventing customer frustrations and significantly lowering pre-abandonment dropouts can be accomplished by streamlining the checkout process and offering upfront prices, clear payment options and transparent delivery charges. Display of Abandonment Intent The warning for impending cart abandonment is set off by a number of the buyer's telling behaviours and intent signals. There are efficient personalization and abandoned cart recovery options that let you recuperate in real-time and convert those potential abandonments into sales. Customers could feel confused when websites have an excessive amount of content. When buyers lose interest and indicate that they are ready to go, eCommerce companies can deliver personalized and incredibly compelling messages to them. Powerful ways to keep visitors engaged before they go back to their referral source include triggering an incentive-laden overlay with limited-time offers, free shipping, money-back guarantees or an inducement to subscribe to a newsletter upon display of this behaviour. For instance, assume that your user has chosen to quit your website rather than completing the checkout after being confronted with unexpected shipping expenses. By automatically launching an exit-intent overlay or message with a tailored incentive for finishing the order when you notice your visitor's exit intent, you can successfully re-engage with them. Employing flashing tab notifications that change the title of the abandoned browser's tab to attract the user's attention and persuade them to purchase if they already have items in their cart is another strategy that is simple but effective in reducing shopping cart abandonment. Post-Abandonment To get your customers to return, resulting in abandoned cart recovery, there are a variety of retargeting tactics and technologies you may use. For instance, businesses can use targeted display advertising to retarget cart abandoners, reminding them that they still have products in their carts and providing them with special offers when they come back to finish their purchases. When a user visits a website, browsing cookies are used to retarget them with highly relevant advertisements for things they have already shown interest in. eCommerce businesses can create customized abandonment email campaigns to remind customers to finish their shopping or to provide discounts when out-of-stock items have been restocked. While requesting input from customers might assist in identifying the issues that contributed to shopping cart abandonment, providing personalized marketing messages is an incredibly successful method to encourage returns. Sending out surveys to your visitors and clients regularly will help you remain on top of their expectations and will provide you with information on the most pertinent and efficient marketing methods to use to decrease future abandonments. Abandoned cart recovery strategies can be quite successful in re-engaging customers at all stages of the cart abandonment process. Customers' demands are rising, and eCommerce merchants in charge of omnichannel shopping should adopt creative new approaches to address their needs on a personal level, throughout the customer journey. Top 10 Causes of Shopping Cart Abandonment Unintuitive Checkout Process The buyers should reach the finish line as soon and as easily as possible. A lengthy checkout process with numerous steps and forms might cause friction and slow down your customers. As a result, the buyer not only detracts from the present checkout experience but may never make another purchase on your website. Unforeseen Shipping Expenses Unanticipated delivery expenses typically hit a customer after they've entered their shipping information and discover that it is more costly than they anticipated. Once they notice those fees, customers might reconsider their purchase and, if their expectations aren't satisfied, they might even abandon their cart. Forced Account Setup Prior to making a purchase, users should not be required to register an account. This is especially true for new customers who might not be prepared to open an account. The checkout experience is complicated and order completion is slowed down when customers need to generate a username and password in order to finish a transaction. Payment Safety Concerns Understandably, most buyers are extremely wary of making purchases online. They won't complete their purchase if they don't feel secure about giving their personal information or if they worry that their payment information won't be handled securely. Shopping Cart Restrictions Customers don't want to add things to their cart only to discover later that they are unable to purchase them due to limitations on the amount that one person can buy. Being forthright about quantity restrictions helps reduce consumer resentment by establishing expectations that a product may have restricted availability. Better Deals Elsewhere Customers now have access to a wide range of options when purchasing online and can compare those options quickly, thanks to the wonders of the internet and the growth of mobile commerce. Deal-seeking customers frequently place items in their carts with the intention of buying them later from a different store that is offering a better deal. Lack of Variety in Payment Options Online buyers prefer to finish their transactions with the payment options that are most practical for them. Some customers may be content with the default selection but others may decide to quit your site entirely if you don't accept their chosen payment method, whether it's card payment, UPI payment or the purchase now, pay later option. Rigid Returns Policy After adding items to their cart, customers frequently receive information about warranties and return policies. A vague or insufficient return policy may make customers think twice about their purchase. Customers want to know that they can simply return a product to a shop and get a refund if anything goes wrong with it. Long Delivery Timelines Customers expect to receive their order as soon as possible. The advantage of shopping online over visiting a store is lessened if consumers must wait too long. Instead of waiting for your store to ship, a consumer who needs their purchase by a certain date might decide to search elsewhere. Glitches in Website Performance A glitchy or unsteady eCommerce site may make customers lose faith in your checkout process or simply become irritated and leave. In the event of an unexpected crash or lengthy page load, customers are less likely to provide their payment information for fear of being charged twice for the purchase or having their payment fail. 10 Best Strategies to Reduce Shopping Cart Abandonment in eCommerce Provide Ultra-Fast Delivery The online shopping space is expanding and enhancing the delivery process to fulfill orders as soon as possible has become very important. Same-day and next-day delivery has become the new standard USP provided by sellers. In many cases, some sellers, with the help of a third-party fulfillment company, can deliver an item within a few hours. This has a positive impact on customers' buying experience and reduces shopping cart abandonment rates. Offer a Mobile-Friendly Experience A streamlined, appealing mobile interface of a website is essential to boosting online sales because younger consumers are increasingly using their mobile phones for shopping. When combined with typical distractions such as calls, messages, social media, etc. an unorganized and unfriendly user experience will increase the rate of cart abandonment. Mobile-friendly websites are fantastic due to their responsiveness and optimization. However, developing a mobile app for both Android and iOS would be the greatest method to appeal to millennials, as no website can match a native app in terms of usability and navigation. Some of the top merchants in the world like Amazon, Flipkart, Mesho and others, have repeatedly demonstrated this. Have a Simple Check-Out Process Customers tend to favour eCommerce websites with simpler checkout processes because there are now more options available to them than ever before. They will immediately leave to locate a website with a simpler interface if they see a lot of pop-up windows or they need to confirm an action more than once. If customers find a website with a good user interface, that brand will easily win them over. Customers dislike filling out registration forms, verifying their phone numbers and email addresses, and entering their billing and payment information. Allowing customers to register using their social network accounts would be a more appealing method to accomplish this. Simple measures like these can greatly increase abandoned cart recovery. The shopping cart must have a clean appearance and show the products clearly. The price breakdown in terms of cost, shipping and taxes, as well as information on the return/exchange policy and delivery, must all be prominently shown on the page. By enabling one-click ordering, other eCommerce companies can learn from Amazon. Another example is Mesho, which has recently introduced a new feature that enables prospective buyers to click on a picture of an outfit they like and make a straight purchase through the app rather than going to the retailer's website. Reduce Any Uncertainties The discrepancy between the actual goods and their online description or product image is among the most common complaints about internet purchasing. Realistic product imagery, snappy, in-depth product descriptions and product films that portray the item more accurately and highlight its features can all help to lessen this. When describing something, it is important to be as truthful and accurate as possible. In a time when consumers seek credibility above all else, images that have been heavily modified are considered unacceptable. Conversion rates can be greatly increased by using images of the use case of the product. Provide Transparent Pricing Most websites display a starting price in their ads or even on the product description page, then raise it when you add items to your cart. This makes customers wary of unexpected price increases. Making sure that all costs, including shipping costs and taxes, are expressly listed on the product description page, is the simplest technique to reduce shopping cart abandonment. This prevents customers from leaving the checkout page after noticing an increase in the overall price. One thing that websites can do is include tax in the cost of the goods and, if applicable, state the threshold for free shipping and delivery on the home page or product page. Undercut Your Competitors When a buyer lands on your website and starts shopping, they might abandon their cart because of price comparison with your competitors. You lose the deal and the customer for further sales, so you need to check competitor costs and price your product in a similar vicinity or even below it. Additionally, a website can reassure users of this by providing details regarding discounts, customer feedback and reviews for each product page which may add value to the product if the pricing is high in comparison to competitors. Implement a Fair Returns Policy eCommerce's ability to offer a doorstep return/exchange facility is one of its biggest advantages. To reassure customers, an effective policy backing this needs to be prominently shown on the checkout page. Free returns enable customers to make purchases without hesitation or concern. Offer Customization Options Many times, buyers choose a seller because of the colour and size of the product, fast delivery, favourable payment options, etc. They seek the easiest possible transactions and the best customer experience. So you should offer customization options to increase the rate of cart abandonment recovery and finally earn their money. Have Multiple Payment Methods Retailers must provide numerous payment gateways, including region-specific payment alternatives, as well as the choice to remember customers’ payment information and preferences. Additionally, new payment providers could provide promotional offers and cashback plans to entice customers to finish their transactions. Send Emails to Customers Who Showed Interest Staying in touch with customers who have shown interest in your brand and your products can increase their chances of returning to your company and making a purchase. It pays to have a form where users can record their contact details before check-out so if you notice that a customer has abandoned their cart, a personalised email can be sent inquiring about the reason for their sudden abandonment and can suggest similar products or offer a solution. Provide Assurances on Listings Assurances such as a money-back guarantee in case a product is returned or shipping badges that specify the exact delivery speed will reassure customers that they are dealing with a professional company. This will reduce the chances of them suddenly abandoning their cart because they are apprehensive about the company. Additionally, it will give them more clarity on when they can expect to receive the order and anything else that you wish to convey. Conclusion: How Can WareIQ Help to Reduce Shopping Cart Abandonment? To reduce shopping cart abandonment, you should primarily start by measuring and analyzing shopping cart abandonment KPIs in order to figure out where you are going wrong and increase sales and the rate of repeat customers with the help of various technology and experts. Differentiating between cart abandonment and checkout abandonment has proven to be successful for many retailers. WareIQ, one of the country's most trusted third-party fulfillment companies, provides a whole range of eCommerce fulfillment services from storage to delivery and everything in between. We assist retailers with reducing their shopping cart abandonment rates by providing super fast delivery services like same-day and next-day delivery through our WareIQ Rush product. This assures customers that they will not have to wait for multiple days to receive their products and can encourage them to make the purchase after they have added products to the shopping cart. Additionally, you can display custom shipping badges on your product pages to convey faster delivery timelines, which provides assurance to them they will receive their products within 1-2 days of placing the online order. Shopping Cart Abandonment: FAQs What percentage of online buyers abandon their cart?In India, more than 70% of shoppers abandonment their cart. Why do online buyers abandon their cart?Buyers remove items from their shopping cart due to multiple reasons such as excessive checkout rates, increased shipping costs, lack of discounts, slow website performance and much more. How do you calculate shopping cart abandonment?To calculate cart abandonment, divide the total number of transactions by the total number of carts created. Subtract it from one and then multiply by 100. What is the shopping cart abandonment rate in online shopping?The shopping cart abandonment rate is a crucial metric for online shopping to keep track of buyers removing items from their shopping cart and don’t end up purchasing anything.
July 01, 2022
Multichannel Inventory Management: A Detailed Guide to Successful Multi-Channel Selling for eCommerce & D2C Sellers in 2022
Mismanagement of inventory costs businesses $1.75 trillion annually, and the probability of inventory errors only rises as organizations grow and sell through many channels. Brands must now use multiple retail and distribution channels to succeed in eCommerce fulfilment services. As a result, businesses must not only sell through various media but also navigate the challenges posed by the multichannel sales fulfilment model, such as tracking, managing, and delivering inventories. Inventory management may become extremely difficult rapidly, and your company may fail under strain if you don't have the framework and resources to acquire inventory and complete orders. In a multichannel inventory management system, purchases and manufacturing orders further increase the difficulty of managing inventory and storage space. Because of this, inventory management software (IMS) has grown to be a crucial component of multichannel operations. This kind of software provides various functions, including inventory, shipping, warehousing, accounting, and vendor administration, all of which work together to stop missed sales and dissatisfied consumers. Today, firms selling on several channels and managing inventory across multiple warehouses need to use multichannel inventory management. Let's examine what it is and the problems it resolves. What Is Multichannel Inventory Management? Monitoring inventory from various sales channels and storage facilities is known as multichannel inventory management. This comprises stock for retail, wholesale, online markets, and e-commerce. Your business can effortlessly manage stock levels, reorders, and inventory forecasts using multichannel inventory management, allowing you to precisely predict inventory turnover each quarter. Instead of wasting time and resources managing your inventory details, multichannel inventory management solutions let you concentrate on expanding your company. Practical Example Of Multichannel Inventory Management System Let's say your business deals in fashion and apparel. One of your products is men's jeanswear that you sell online and offline. All client orders are placed through the online platform, and you've listed denim jeans for sale in your shop. This makes it simple to keep track of your outgoing inventory and ensure you only sell what you have on hand. But when business picks up, you start searching for ways to grow and connect with other prospective clients who use different platforms for shopping. Because you created shops on Flipkart and Amazon, keeping track of stock levels is considerably more challenging because orders are now being placed on three distinct platforms. For instance, if you have 100 blue denim jeans ready to sell, you might set your inventory to 100 on all your sales channels. You now face the chance of overselling, in any case. For instance, you might end up selling 20 denim jeans that you haven't even created yet. Suppose you sell 70 pieces of denim of the inventory you have on hand on Myntra and 50 on Amazon the same day before. In that case, you can update the inventory counts on each site. Therefore, maintaining an accurate product count today is practically impossible without a centralized, automated system for inventory management. You could certainly give it a go. However, you now face the risk of upsetting clients when they place an order for an item only to have it delayed or even cancelled because there is no inventory on hand. Additionally, you'll need to acquire warehouse space and potentially even a business to manage your eCommerce fulfilment if your production increases and you need a place to store items and complete orders more quickly. Sending inventory to numerous sites is required, and you are no longer the sole person in charge of adequately wrapping and shipping each of your goods. Incorrect stock may harm sales, fulfilment processes, and your reputation, so providers won't want to cooperate with you. Your entire organization may fail if you can't keep it in check. Currently, 55% of e-commerce companies handle inventory manually, frequently using spreadsheets or pen and paper. But there are a few drawbacks to this approach. For starters, manually controlling inventories takes time. In addition, you'll waste time and resources tracking every transaction on every eCommerce platform rather than concentrating on growing your business. Thus there is an opportunity cost involved. It is also simple to make mistakes due to the lack of visibility across sales channels and warehouses, which results in overstocking and overselling. Additionally, it is more challenging to manage and obtain data to make informed judgments, making it more difficult to expand your firm. Multichannel inventory management is the answer. Let's examine how it will help your business and why it works. 8 Common Challenges In Multichannel Inventory Management Making a significant influence on online markets like Amazon and Walmart requires using the appropriate technologies. However, there are still some potential problems faced during multichannel selling. This is because various sales channels expose organizations to multiple hazards, and depending on inadequate solutions will probably get you into trouble. The following are some of the most typical problems multichannel eCommerce businesses encounter: Multichannel Inventory Management Becomes Challenging Planning your inventory is crucial if you sell through numerous channels. It might be challenging to predict how much inventory you'll need for each channel and when you'll need it. Overstock, and you'll have too much stock for a month. You risk running out of merchandise if you understock when you need it most. The impact of overselling on client satisfaction can be significant. Directing your goods to the most effective warehouse reduces expenses and expedites delivery. A consumer at your physical store with an empty shopping cart and a credit card in hand are of little value to you if you have high inventory levels in a warehouse for your online business. Processes For Fulfilling Orders Gets Complicated When you were starting out and only selling on one channel, checking SKUs off on spreadsheets, printing individual shipping labels, and straightforward manual picking and packaging certainly sufficed. But now, since you're on several channels, everything is much more difficult. The number of orders that need to be completed increases, and so does the complexity of the order fulfilment workflows. Since you could apply various fulfilment strategies for multiple channels and move inventory between warehouses, the appropriate software may simplify the process by enabling you to process orders in a single location and in real-time, update order statuses automatically, and, most significantly, automate the multichannel order fulfilment procedures specific to your company. Excessive Stock Too much inventory is a resource drain that might prevent future investment since unsold inventory results in increased storage costs and insurance rates. This increased overhead will result in a cash flow restriction, which is never the intention. Inefficient Management Of Warehouse Space Your finances and overall storage space are impacted when the incorrect items are stocked in many warehouses. It is tougher to restock things selling well with less space you have to fill. In addition, the insufficient room makes it much harder to satisfy customer needs, which leads to dissatisfied customers who could stop patronizing your establishment again. Additionally, you must pay holding charges for storing the unsold merchandise, which reduces your overall profitability. Overselling When a company sells through several channels, they frequently discover that there is a chance that they may accept payments for goods that are not yet in stock. As a result, overselling can make consumers dissatisfied. Cancelling an order may harm their experience, hurt your reputation, and raise the likelihood that they won't shop at your online business again. Erroneous Forecasting Insufficient data has a cascading impact. Additionally, because business is constantly changing in e-commerce, it is incredibly challenging to reverse course once inventory planning goes awry. It doesn't help that, according to a Zentail poll, 54% of sellers still don't use forecasting tools and instead try to compute shifting objectives manually. In addition, the same merchants frequently use a conventional forecasting methodology of 30, 60, or 90 days. As a result, they lack unified, real-time data to identify new purchasing patterns and instantly reorder (or reduce) product quantities. High Rate Of Order Defects Order cancellations, wrong shipments, delivery exceptions, or late deliveries might result from an absence of inventory control. Your selling performance will suffer if they get out of hand. An ODR over 1% on Amazon is grounds for suspension. The cutoff is 2 per cent on eBay and Walmart. Beyond understocking and insufficient data, an inventory storage system that doesn't connect your various facilities might sabotage your productivity. Channel Performance Insights The most valuable player of any e-commerce organization is data. Unfortunately, having a selling presence across various platforms might leave you with a mountain of dispersed and disorganized data. That's before you factor in additional difficulties like dropshipping or Amazon FBA. Identifying your organization's areas where you should spend more time and energy might be challenging. You won't be able to see clearly how the demand is shifting or what's doing well. 6 Benefits Of Having Multichannel Inventory Management Not only does a system that updates inventory automatically across platforms for sales and warehouses keep you organized and spare you the hassle of making manual modifications. Multichannel inventory management immediately benefits your businesses bottom line in several different ways. Prohibits Overselling and Overstocking When your inventory is off, you can sell products you don't have in stock. This can cause delays in order fulfilment, irate customers, and even lost revenues if you have to issue a refund and the buyer goes shopping somewhere else. Deadstock or overstocking of some products can also occur from not having a solid grip on inventory or customer demand for particular products. With contemporary software solutions, multichannel inventory management streamlines this procedure. Each sale of items made anywhere will draw from the same inventory if you have a central database. Thus you can always be sure that your inventory is accurate. Improves Visibility The merchandise availability across all sales channels and warehouses can be quickly seen and evaluated by sellers using a multichannel inventory management system. The impact of sales on inventory is also visible to sellers in real-time. You can thus check inventory at any time to know quickly what goods are available, which ones you need to refill, and which products are selling where – and you can do it all in real-time. Provides Insights Without data, no e-commerce company can grow and prosper. As an e-commerce merchant, you must know what products are in demand, which isn't moving, and how your inventory varies with seasons, trends, and sales to optimize your inventory and order fulfilment. This enables you to anticipate demand and plan for special occasions. Suppose you're planning for Christmas Day, for instance. In that case, you may consider what products you'll need to resupply before the event and then use historical sales data to forecast which things will sell quickly and make the necessary preparations. Using data and insights to influence your decisions, you may also rapidly take advantage of fresh possibilities. For instance, you can find that a specific pair of denim jeans isn't selling well and decide to give a one-day flash sale to persuade people to buy. Or, you can discover that sales of a specific product vastly outpace those elsewhere and opt to keep it solely in a local warehouse. You may streamline your business and concentrate on the most lucrative platforms by eliminating the selling channels that aren't doing as well. Improves Customer Experience It would be best if you offered the same high standard of service regardless of whether a consumer decides to purchase your product—on your website, Myntra, or anyplace else. Whether you conduct business online or in person, you need a multichannel inventory management system that offers real-time visibility. Let's look at this on a much bigger scale for a company with several retail locations. When a buyer visits your online store to buy a pair of medium denim pants, they are out of stock. To find the item, the consumer might travel to other shop locations or check online to see whether the trousers are in stock. However, a multichannel inventory management solution makes it simple for customers to ask a staff member to verify the inventory at different shop locations. Finding whether local businesses have the item in stock so the consumer can pick it up the same day or have the trousers sent right to their house will take a second. When an inventory management system is in place, it eliminates the need to search across many retailers for a pair of trousers. Expedites Delivery Regardless of your location, a multichannel inventory management system enables your company to handle inventories worldwide. As a result, shipping times will be quicker, and merchandise may be located closer to clients. With capabilities like route-optimization and last-mile delivery, multichannel inventory management software helps your company further enhance the fulfilment process and ensure that orders are delivered efficiently, precisely, and economically. Enables To Expand Your Business Quickly You may scale your business in various ways, such as adding more items, expanding your distribution channels, partnering with more suppliers and manufacturers, and keeping inventory in multiple warehouses. Additionally, growing in any of these methods becomes more challenging if inventory needs to be manually tracked. By implementing multichannel inventory management to enhance the delivery process, you can also increase the productivity of your business. In addition, numerous software capabilities, such as automatic planning, route adjustment and order monitoring, analytics, and more, may completely transform your company. In addition to guaranteeing quick, correct delivery for your clients, doing this will free up your time to concentrate on the essential aspects of running your company: developing, promoting, and selling high-quality items. 8 Key Features Of Ideal Multichannel Inventory Management To have an impeccable multichannel inventory management system, look out for the key features mentioned below- Native Integrations Without extra third-party connectors, every multichannel management system is worth being competent. In addition, it should be able to connect to every e-commerce channel you use. By taking third-party integrations out of the picture, disconnections will decrease. A seamless connection guarantees a smooth workflow. Additionally, you often receive better and quicker assistance with native integrations built and managed in-house without an intermediary. Integrations for e-commerce can help speed up the payment procedure. For instance, businesses that accept payments through various payment gateways would want an order management system with robust integration capabilities. By doing so, businesses may control payments and refunds without ever leaving their main system. Flexible Alternatives For Order Fulfilment Flexible order fulfilment solutions are necessary if you want to deliver orders to customers as quickly and affordably as possible. Based on your procedures, a multichannel order management system should be able to automate multichannel order fulfilment. For instance, based on the channel the order came from and the location of the delivery address, it should be possible to choose the fulfilment strategy or warehouse automatically. Inventory Management At Multiple locations When it comes to inventory management, a multichannel order management system excels. You will be able to view all your inventory in one seamlessly connected location, as opposed to having to view it individually for each e-commerce channel or manually combine it with other goods into a basic inventory management system. For order fulfilment, the inventory may be sent to warehouses with stock available using multichannel inventory management software, saving you the time required for manual rerouting. They can even start backorders or buy orders with suppliers to restock stock levels in the future. Point Of Sale Integration Do you ever wish that the inventory you sell through your e-commerce channels and the merchandise you trade in your physical shop could be promptly reconciled? That is possible with multichannel order management systems with integrated POS. This is extremely helpful if you give your clients a choice to buy online and pick up in person or to click and collect. Planning Inventories Using Data When you use a multichannel order management system with integrated inventory planning, you can access all your data from every channel at your fingertips. As a result, you can predict which things to sell when and through which channels. A data-driven inventory planning system can improve your inventory management using useful KPIs, enabling an effective data-driven growth strategy. Process Automation The world is evolving due to automation. Nowhere is this truer than in the e-commerce fulfilment industries. Workflow automation may be scaled to your company's demands, taking over the time-consuming tasks so you can focus on the things that require human interaction. To build a seamless omnichannel customer experience, you may control the process automation across all of your various sales channels. Your order management software's incorporation of workflow automation will hasten order processing, reduce human error, and ensure quick delivery and order correctness to your consumers. Business Reporting and Intelligence You don't want to waste time while making decisions for your company. You want to have access to all the information you require immediately. A multichannel selling management system must feature simple yet capable reporting that can gather information from your sales channels and provide you with in-the-moment business insights. Additionally, you should consider using retail business intelligence, which will give a comprehensive account of your company's performance, if you want to gain more in-depth insights into your channels, goods, and customers. Consequently, you will have all the information necessary to make data-driven decisions. Accounting Purchases Post-purchase analytics are crucial for running your company. The ideal order management system should make them as simple as feasible. To transfer real-time data into your preferred retail accounting software, look for an order management system that offers inventory, demand, warehousing, and buying information. You'll be able to make wiser business decisions if you have access to your financial data from several sources on a single platform. 4 Factors To Look For In Multichannel Inventory Management Software The most excellent and dependable multichannel inventory software may be found by considering several options. First, you must thoroughly understand your unique business requirements, the size of your company, and the number of warehouses you have to select the appropriate software. In a multichannel environment, inventory management may be challenging. You must know the particular integrations and capabilities needed to sell and restock your items, which vary from business to business. Redundancies and workflow disruptions can be avoided by choosing the appropriate tool combination. So that you can select and incorporate the ideal software choice for your inventory management, there are a few things to consider. These consist of: Controlling Inventory and Predicting Inventory control and forecasting should be considered when limiting your software selections since they serve as the foundation of your inventory management. Therefore, it's to your best advantage to pay special attention to the following before committing to a specific system: Flexibility in Stock Keeping Units (SKU) The finest software enables autonomous tracking of bundles and kits and individual goods, key components, and product variants. This SKU flexibility enables instant access to your product data, aids in tracking your inventory across all channels for timely replenishment, and allows you to keep track of your best-selling goods. Forecasting One of the most critical factors in inventory forecasting is the sales history of a product. To be able to look back on it or use it in calculations for inventory planning, your programme should capture and preserve sales data for years. This is now more crucial than ever as COVID speeds up the adoption of e-commerce. In addition, accurate inventory and supply chain forecasting puts brands and marketplace vendors in a better position to benefit from the profits. Data from Every Channel The key to more efficient inventory management is to gather data from all your sales channels to create a single repository for your sales data, fulfilment data, and supply chain automation processes. In addition, to acquire a comprehensive understanding of product performance and operational profitability on a per-SKU, per-channel basis, you should ideally be able to combine the data from each sales channel. Scanning and Barcoding For larger companies with multiple warehouses and fluctuating inventory levels, this is one of the most crucial factors because barcoding and scanning make it much simpler to collect real-time data from your various warehouse locations and guarantee you're working with real-time, accurate stock data. If you use barcoding technology, it will be an essential part of managing your multichannel software. However, Barcode systems cannot be integrated with every multichannel inventory management software. Therefore, verify that your entire toolkit will function as a unit and that your operations software is compatible with your barcode accessories. Another option is to utilize a mobile device to scan stock using an app like Barcodes or Scout. Analytics The usefulness and efficiency of the tool will also be influenced by the inventory analytics you have access to in your programme. It is crucial to prioritize in-depth access to the data you want and to conduct research on the reports the programme offers. To make the necessary modifications or adjustments as your firm continues to sell, ensure the business information you get is actionable and quantifiable. Configurability and Customization It's not always simple to customize inventory management system. However, as no two organizations run similarly, customization and configurability are crucial components. Implementation will be more straightforward the more you can personalize and customize your multichannel software. Choose products with a robust App Store or integrations directory. Conclusion Software for multichannel inventory management is necessary for any company that wants to run smoothly and efficiently. As a result, companies of all sizes enjoy the most effective inventory management system that enhances customer satisfaction and facilitates a seamless customer experience while balancing the budgetary constraints associated with everyday operations. It would be best if you had a robust multichannel inventory management strategy to prevent overstocking and stock-outs and guarantee that customers receive what they request. Then, your e-commerce firm can quickly profit from using the proper software. Strong Multichannel Inventory Management From WareIQ For experienced merchants, WareIQ's integration offers a powerful multichannel inventory management solution. Our services ensure that your listings reflect the correct numbers and that your product data is accurate. At the same time, WareIQ quickly and affordably fulfils orders across your marketplaces. In addition to helping with online order fulfilment, WareIQ also provides a B2B fulfilment Suite that enables merchants to sell throughout the whole B2B ecosystem. This suite powers wholesale shipping and retail drop shipping, which can link with all of the leading shops in the nation. By collaborating with today's best eCommerce fulfilment and operations platform, you can exceed customer expectations, prevent mishaps, and prevent forecasting glitches from depressing your sales. WareIQ offers the best-in-class features such as a custom WMS that records changes to inventory in real-time and across sales channels and fulfillment centers and allows users to keep track of their inventory levels, integrations with more than 20 of the leading eCommerce marketplaces such as Amazon, Flipkart, eBay and much more, intelligent inventory placement suggestions in fulfillment centers close to high-demand locations and transport facilities, automated warehouse activities and much more, thus enabling more efficient multichannel inventory management, at lower prices than most competitiors. [signup]
July 01, 2022