P&L Playbook for eCommerce by ex-SUGAR & Raymond Leader
How Does Decentralized Inventory System Help in Adapting to Changing Buyer Behavior & in Growing eCommerce Businesses in 2025? Benefits And Challenges Of Having A Decentralized Inventory Management

How Does Decentralized Inventory System Help in Adapting to Changing Buyer Behavior & in Growing eCommerce Businesses in 2025? Benefits And Challenges Of Having A Decentralized Inventory Management

Ordering merchandise, shipping, storing, and selling become critical decisions that must be made as firms expand. Increased industrial storage is required to expand the range of items offered and enable products to reach a greater geographic area. A critical choice during this expansion phase is whether to transport goods from a single central site or smaller warehouses dispersed around the country. Both centralized and decentralized inventory has benefits and drawbacks, and their use depends on the organisational structure, individual objectives, and management methods. According to the U.S. Census Bureau, manufacturers, retailers, and merchant wholesalers in the United States had inventory worth more than $1.9 trillion in June 2018. Believe it or not, according to experts, roughly 90% of a company's inventory is stationary. It is kept in storage, whether on racks in a warehouse or on shelves in a store. A company's merchandise is only genuinely in transit 10% of the time.  So it becomes essential for the organization to think about managing their inventories. In this article, you will learn about centralized and decentralized inventory systems with how to maintain a decentralized inventory system, which helps expand the reach of your business. What is a Decentralized Inventory Management System? Decentralized inventory refers to an inventory management system in which the items are moved from a central location to other warehouses, further decentralising the process. This technique is appropriate for businesses whose clients are dispersed across the country. Quick delivery also contributes to enhancing client happiness and service. Decentralized inventory aids in more effective and quick emergency response. The risk of fire and other natural disasters is reduced since all the commodities are kept in various warehouses. Products are more vulnerable to dangers if kept in a single location. For example- As an illustration, imagine that you own a Delhi-based online business with regular consumers from Maharashtra, Rajasthan, and Karnataka. You only have one warehouse in Gurugram from which you transport goods to particular regions of the nation. A centralized inventory system is what this is. Due to the proximity of your location to your consumers in Rajasthan, their orders will arrive swiftly. Customers from Maharashtra and Karnataka, on the other hand, are dissatisfied with the extended shipment delays. As a result, in addition to the current facility in Gurugram, you plan to establish regional warehouses in Mumbai and Karnataka. When you receive an order, you can determine which facility is nearby to the customer's delivery location and send the product there. If the item is out of stock at that location, you ship from the nearest warehouse. A decentralized inventory management system is what this is. Although it may seem enticing, implementing and maintaining a decentralized inventory management system successfully calls for strategic planning and a top-notch management system. 4 Challenges Of Having a Decentralized Inventory and Multiple Warehouses  A large body of management theory supports decentralized warehouses, but ignoring the difficulties they provide would be naive. Instead, we need to consider a few things, including administration, inventory visibility, and employee-related problems across various warehouses. Inventory Control Supply chain management becomes more challenging when inventory is dispersed among several distribution sites. However, when everything is in one place, management is focused there, reducing processes and lowering expenses. Retailers can feel as though they have to give up inventory management due to a lack of clarity when there are products in numerous locations. Although ERP systems should in theory support these tasks, they're not always reliable and can occasionally lead to inventory shortages or errors. Management Of Decentralized Inventory Naturally, managing numerous sites is more difficult than managing just one. More staff, inventory, and administration are necessary when there are many warehouses involved. Warehouse operations may easily become complicated and disorganised if warehouses are shared, serve as distribution centres, or serve as drop shipping destinations. Even if everything could run perfectly in one place, increasing inventory locations might make procedures more difficult and even endanger regular business operations. Coordinating Warehouse Shipment Costs Calculating a rate or lead time for shipping from a single location is almost always constant. Shipping from the same location each time implies predictable cut rates and transit times, giving clients the transparency they expect in their purchase. The number of considerations increases significantly when locations are included in the equation. Which warehouse will handle shipping for the order? Does the customer's closest warehouse have the variety of goods they need? Have you got a lot of stock in one place but a dangerously low quantity in another? Of course, making decisions in several locations is more difficult than doing it at a single location. But how will this impact the choices you make about your inventory? Prior to adding more sites, it's critical to build a plan for these factors. Having the proper tools in place is essential for controlling shipping costs between warehouses. Utilizing Decentralized Inventory Management to Address Challenges A multi-location distribution system or decentralized inventory offers several advantages over other approaches, despite its difficulties. Businesses that struggle with long lead times, dissatisfied consumers due to transit periods, or a lack of distribution flexibility should carefully consider multi-warehouse management and how it might address these issues. The option of having smaller or fewer facilities is another benefit of a decentralised supply chain for e-commerce firms. These warehouses can be handled quickly and adaptably, providing retailers with greater insights into the levels, demands, and shortfalls of inventory replenishment. In the end, merchants almost always benefit from the flexibility that comes with decentralized inventory management. [contactus_lilgoodness] How Can a Decentralized Inventory Aid in the Development of Your Online Business? Decentralized inventory could be a wise investment for growing e-commerce companies. With smaller, local facilities, businesses can deliver goods to clients more quickly. In addition, warehouses may be able to act as client pickup places depending on their location, a service that is becoming more and more popular every day. Lower Shipping Expenses Your distribution options are immediately doubled when you add even a single warehouse location for your goods. You may be able to significantly reduce transit times and shipping costs owing to greater proximity to more consumers, depending on the strategic position of your facilities. Shipping costs decrease when warehouses are positioned closer to delivery sites. Expand Your Consumer Base Similar to the advantages of lower transportation costs, expanding your network of sites can help you reach clients who live farther away. If their order will be delivered in just a few days, a consumer interested in a pair of shoes from our go-to shoe shop is far more likely to order. Shipping may take a few weeks if the business just had one location, providing customers with an incentive to purchase somewhere else. Your prospective consumer base will grow as a result of expanding your footprint, which will increase your revenue. Quicker Local Delivery Times Having numerous warehouses boosts a local customer's ability to pick up purchases directly or provides them access to same-day delivery, especially in the age of curbside pickup and same-day delivery. With these choices available, shoppers might be able to purchase and get goods on the same day. You can only provide immediate pickup to consumers in one location if you have one warehouse. However, distributed warehousing brings your items and additional consumers together. 6 Factors to Consider Before Implementing Decentralized Inventory Control system A decentralized inventory system can appear to be the magic solution for a failing eCommerce warehousing company in the continuously changing eCommerce fulfilment industry. It may not be the best method for everyone due to a few factors that may alter its effectiveness. Before implementing decentralized inventory control, take into account a few variables that may have an impact on how it functions for your company. What is the Weight of my Goods? It might not be beneficial to have inventory in many locations if you sell heavy goods, such as furniture or exercise equipment. It might not be a wise investment to transport merchandise first to a warehouse before sending it from the production or import site because shipping prices for things like this are already rather high. To What Location Do I Deliver Orders? It might not be a good idea to distribute merchandise outside of the general area of your consumer base if your business is largely reliant on local clients. A seller of umbrellas, for instance, definitely doesn't need to move their business from Seattle to Arizona and may even lose financially if they did. What Are The Running Expenses For Several Warehouses? Spreading your items over many locations can not be advantageous if they need specific attention, such as refrigeration or routine quality inspections. Given how expensive it already is to store this kind of merchandise, increasing the expense of keeping them might not be a wise investment. What is the Amount of Orders Each Month? Using numerous warehouses is generally not essential if you just transport a few high-value items each month. It could be best to keep things straightforward and centred with only one site while eCommerce companies are still in the beginning or growth phases. It can be required once you've ramped up and are getting a bigger stream of orders. Do Businesses Really Need Additional Warehouses? The eCommerce logistics industry is now buzzing about decentralised inventories. Given all the talk about it, it could appear essential to expanding your company. However, now might not be the best moment to consider decentralising your inventory if your shipping issues do not include inventory location. Is the Current Technological Setup Ready for Several Warehouses? Do You Require a Solution for Managing Many Warehouses? Do you currently use an ERP? a management system for warehouses? What software do you currently use to manage your business? Make sure your systems are strong enough and prepared to manage the shift before making the jump to distributing your products. The single most important action to do before starting the shift will be to be well-prepared. 7 Best Practices For Maintaining A Decentralized Inventory System Researching and implementing an Enterprise Resource Planning(ERP), or a Warehouse Management System(WMS) will be one of your initial stages. Your work will be a lot easier and business operations will run much more smoothly if a software solution is in place to handle things. Are you prepared to explore dispersed inventory? It's a wise choice that will benefit you. To fully profit from the distribution, you'll need to set it up properly in the meantime. Here are a few of our pointers for successfully managing Decentralized Inventory Balance Your Stock Levels In order to maximise storage space and prevent fulfilment delays, your data should be used to establish stock levels. To effectively manage your inventory across all warehouses, you must determine your maximum, minimum, average, and order levels by taking a look at your product sales, inventory turnover, and lead time rates. To keep expenses low, it's crucial to maintain strict control over your stock levels and make sure they are balanced. Why? Because it reduces waste and guarantees you are not putting too much strain on your finances with high stock expenses. In order to select which warehouse to stock which goods and maximise product levels, you need also pay attention to the following KPIs: Your per-order processing fee Your lead Time Statistics (or order fulfilment latency) Your Ideal Order Rate Watch Your Bestsellers Closely The most crucial goods to maintain will be your most well-liked offerings. Setting up minimum inventory levels of these items at each site is a smart move to make sure you can send them out from each warehouse swiftly. It's crucial to anticipate these trends and have extra stock of these items because they will frequently sell out. Count Product Stock In Decentralized Inventory System It's crucial to make sure you do stock counts at each facility. Ecommerce retailers frequently make the error of believing they simply need to track the overall quantity of items without taking into account the product levels at each warehouse when transitioning to a decentralized inventory system. To guarantee that the stock levels we indicated are balanced at each warehouse, you must be aware of all of your items there. If you aren't utilising decentralized inventory management software, you'll need to work hard to keep an eye on product counts at each warehouse since running out of a product at one warehouse can cost you time and money. When you have a lot of items, divide your inventory counts into focus lists so that you don't have to count every item all the time. The most effective approach to achieve this is to separate your items into high-risk (those with the poorest history of inventory counts) and high-value categories (products with the highest revenue potential.) Utilize Both Movable and Fixed tracking Long-term headaches may be avoided by making an investment in your inventory management. To build a reliable inventory management system, fixed and mobile tracking are required. Why? Since you can precisely assign warehouse destinations by combining fixed and movable tracking options, you can be sure that you always know whether the hardware needed to process the order is up to par, where each product is placed, what its status is, and which products are ready for fulfilment and shipping. Simply said, it streamlines and expedites your fulfilment services. Here is a brief explanation of each for those who are unfamiliar with warehouse management jargon- Fixed Tracking Fixed tracking, sometimes referred to as asset tracking, is the continuous observation of your production-related machinery as well as any equipment that supports your warehousing and fulfilment centre operations. To track the location and status of equipment, utilise RFID tags or barcodes. Movable Tracking Movable tracking, sometimes referred to as inventory management, is the process of keeping track of each product and how many you have on hand, as well as which items need to be refilled and which ones are in excess. In a nutshell, it's the administration of your inventory and figures in real-time. Not Every Product Needs to be Stored in Every Warehouse The number of goods you sell will increase along with the size of your eCommerce logistics business. It makes no sense to keep all of your goods in every warehouse. As we mentioned above, one of the greatest strategies is to divide your inventory into best- and worst-sellers, and then stock your warehouse appropriately. To enable speedier, more affordable delivery, you may, for instance, make sure that your bestsellers are present at each warehouse site while keeping all of your slow sellers in one warehouse and your medium sellers in another. Remember that clients may request many products at once that may be stocked at different locations. Due to the possibility of having to fulfil items from several locations, this may result in additional shipping and packaging expenses. It would be beneficial if you compared these expenses to the warehouse layout you choose and, where it is practical, matched goods that are frequently stored together. If you aren't arranging warehouses with decentralized inventory management software, label your items as out of stock once they have been transferred to the new location. Real-Time Data Update The most important decentralized inventory management advice is to make sure that your ordering systems and warehouses' data are in sync to avoid delays. You can get away with this manually if you operate a tiny business from your home with just one warehouse. However, if your company is expanding and adding more than one warehouse site, a robust decentralized inventory management system, like the new Multi-Warehouse Management feature, is the only method to handle data in real-time. This feature enables you to: Build decentralized inventory warehouses Control inventory levels and move it across warehouses Management of warehouse inventory allocation depending on channels Implement connectors with 3PL and Amazon FBA Manage dropship orders Implement automatic order routing by the supplier Make invoices, shipping labels, and packing slips. Receiving order notifications Integrate with shipping software and carriers Access order status in real-time across all markets Utilize Cross Docking and Wave Picking  Make sure you are preparing for a lean operation when organising your decentralized inventory management. In other words, you aim to minimise expenses. You may accomplish this with the use of two warehouse management systems: wave picking and cross-docking. In the latter, a product is dispatched out as soon as it is received. Alternatively, if you make your goods, consider it a method that allows for considerably less storage space, lowering warehouse expenses. However, it becomes difficult to retain this storage option as your organisation expands without creating fulfilment issues. Wave picking entails greater storage capacity so that orders may be completed in sequence throughout the day, making it preferable for larger, expanding businesses. Utilizing these strategies can ensure a distinct, lean system in your intricate shipping system if you have adequate inventory management software. Centralized vs Decentralized Inventory Management System The primary difference between centralized inventory and decentralized inventory is that the former refers to an inventory management system in which the goods are moved from the primary warehouse to various warehouses that are close to the consumer's residence. The latter refers to an inventory supervision mechanism in which all necessary operations are carried out in a central setup. Centralized Inventory This inventory management system conducts all activities in a single place. Despite the possibility of separate product-based storage areas, storage is frequently done in one big warehouse. The same crew handles all inventory, and the same transportation techniques are used. The majority of e-commerce businesses, including Amazon.com, use it. Utilizing centralized inventory has several benefits, such as: It makes it simpler to promote and uphold the corporate culture. Operating expenditures like rent and other utilities have decreased significantly. The lowering of expenses results in higher profits. Better customer service is delivered by emphasising the use of trained personnel, improved methods for responding to questions and requests, and improved tools. Management responds quickly to any issues with goods or procedures. Despite the many benefits, a decentralised inventory has a number of drawbacks, such as: Rush delivery and high transportation expenses, particularly in the long term, may be passed on to the client. Result in competition for resources like human resources Decentralized Inventory Decentralized inventory entails distributing your stock among several sites. Large retailers like Amazon frequently use these multi-channel distribution techniques. This method offers a wide range of advantages as well. When items are kept in warehouses close to clients, merchants may reach them in more places in less time. Additionally, it reduces the danger of keeping all goods in one location in the unlikely case of tragedy or poor management. The following are the main benefits of decentralized inventory: When compared to a centralized inventory management system, the system's distribution flexibility is substantially greater. There is a bigger decrease in the cost of transportation. Additionally, the shipping time is drastically cut down. The following are the main drawbacks of decentralised inventory: Significantly greater operating and investment expenditures. Inventory management calls for additional physical labour and personnel. Additionally, the control expense is somewhat greater. The likelihood of incorrectly allocating products is higher. Tabular Representation: Centralized Inventory VS Decentralized Inventory System [table id=33 /] Centralized vs Decentralized Inventory Management: Which is Right for Your Business? Decentralized inventory is defined as inventory that is held in many locations and warehouses, as opposed to centralised inventory, which is defined as inventory that is stored at a single location. In the case of centralised inventory, top management makes the decisions, but in the case of decentralised inventory, lower and middle management make the decisions. Less labour is needed for centralized inventory control. On the other hand, the latter situation necessitates more personnel. In contrast to a decentralized inventory management system, which may not guarantee price consistency, a centralised inventory system guarantees price uniformity. The likelihood of theft from consolidated inventories is quite low. On the other hand, there is absolutely no chance of theft with the latter. Conclusion The two main warehouse distribution types are, broadly speaking, centralised and decentralised. Between the two, there is a third choice, but all models are vital and relevant. Understanding your clients, regional presence optimization, fulfilment capabilities, and other factors are necessary when selecting one for your company. Because there is just one site rather than several, inventory management is simpler and more cost-effective with a central warehouse. Transport costs, however, can be rather high depending on how far shipments must go. Not all clients or consumers will be in close proximity to the core hub. A decentralised strategy keeps the warehouses dispersed and much closer to the final consumer. Over the centralised paradigm, order fulfilment, shipping times, and customer service frequently increase significantly. With a shorter distance between nodes, transportation expenses are also significantly reduced. However, operating costs are substantially greater and rise as more sites are opened. Both models provide options for outsourcing and cutting-edge automation to build a more streamlined and effective company. It frequently boils down to the demands of the typical consumer. Which model will best serve their needs, and how can the organisation help? WareIQ As an Inventory Management and Fulfillment Partner It is feasible to create a hybrid system using both methodologies, with WareIQ. The hub of operations, where all the inventory or product is normally kept, is a central warehouse. They are known as branch warehouses or decentralised warehouses and support several nodes that are located closer to the end-user. Only high-demand items are stored and managed in the branch warehouses, with real-time analytics and efficient distribution based on market demand. In other words, the smaller warehouses provide clients with faster delivery of the most popular items together with superior customer support. All of the inventory that the company controls, including more specialised items, is kept at the central warehouse. Additionally, it restocks the branch warehouses as needed. The combination of centralized and decentralized inventory is made possible and more effective than it would be without WareIQ's cutting-edge technologies, such as advanced computing, machine learning, AI, and big data. With WareIQ, What Does Having Such a Decentralized Inventory Mean to Your Brand and Service? Benefits to business and consumers for having a decentralized inventory with WareIQ are as follows:  Faster Pan-India delivery with better shipping timeline/tracking.  Data-driven optimization of your business.  Efficient and smart inventory placement powered by the philosophy of "supply where there is demand".  Helping meet the customers' expectations of an Amazon-level service. Reducing cancellations due to delays in delivery.  Managing a central warehouse is cheaper but it comes at the cost of the cons we have discussed earlier. Outsourcing the decentralization of your inventory to a platform like WareIQ can actually bring down the overall costs as it improves business and customer retention. It also helps in achieving better operational efficiency- i.e providing superior services to the customers at the same cost. Also, managing local demand surges and scaling your business in new cities becomes easier. For a customer, it means faster delivery (within 1 day) and options like same-day pickups. They may no longer be bound to Amazon when they expect the same. It also increases their reliability and trust in the brand.  [signup] Centralized Vs Decentralized Inventory Management FAQS

June 29, 2022

How to Improve Regional Utilization and Optimise Demand-Based Inventory Distribution in 2025 for Faster eCommerce Fulfillment with Accuracy & Lower Inventory Holding Costs?

How to Improve Regional Utilization and Optimise Demand-Based Inventory Distribution in 2025 for Faster eCommerce Fulfillment with Accuracy & Lower Inventory Holding Costs?

Brands must provide faster deliveries and effective order fulfillment as competition in the eCommerce sector heats up. It is essential to be able to predict demand effectively and keep inventory levels in line with consumer demands. The amount of time it takes an eCommerce business to deliver an item to a customer's door has a significant impact on how customers perceive a brand. It is essential for both small and large businesses to fulfill orders quickly and accurately if they want to grow their eCommerce consumer base. Smaller brands must increase their consumer base through flawless order fulfillment while larger companies and international brands must preserve their brand reputation and existing customer base. To make delivery quicker and more cost-effective, eCommerce businesses are practising regional utilization. Optimizing regional utilization can help ecommerce businesses reduce shipping costs, improve delivery times, and increase customer satisfaction. It can also help businesses better manage their inventory and reduce the risk of stock-outs or overstocking. Let us get a better understanding through this article. What is Regional Utilization? Regional utilization (RU) is an eCommerce calculation term which reflects the percentage of local and zonal order fulfillments out of the overall order fulfilment. It is a measure of how well the fulfillment center is able to meet the demand for orders within a specific geographic area. Giant eCommerce players consider regional utilization (RU) as a significant factor in determining the seller account status. Electronic brands and sellers often prepare their stock for some of the most awaited eCommerce season sales like Amazon’s Great Indian Festival or Flipkart’s Big Billion Day. Regional utilization (RU) ensures faster delivery and reduces additional logistic costs. [contactus_lilgoodness] How to Calculate Regional Utilization? To calculate regional utilization, you will need to gather data on the volume of orders being placed in a specific region and the efficiency of your fulfillment center in servicing those orders. Here is an example of how you could calculate regional utilization: Gather data on the volume of orders being placed in the region. This might include the number of orders placed per day, week, or month and the average order size. Gather data on the efficiency of your fulfillment center in servicing those orders. This might include the number of orders being fulfilled per day, week, or month, as well as the average time it takes to fulfill an order. Calculate the regional utilization rate by dividing the number of orders fulfilled by the fulfillment center by the total volume of orders placed in the region. For example, if your fulfillment center is fulfilling 1,000 orders per month in a specific region, and the total volume of orders placed in that region is 2,000 per month, your regional utilization rate would be 50%. This means that your fulfillment center is fulfilling half of the orders placed in the region. The following illustration shows the regional utilization (RU) formula: Let's see, with the help of an example, how regional utilization (RU) is calculated. Suppose you have 10 fulfillment centers across India and the following factors are at play: You received 25 total orders in the month of July, 5 from New Delhi, 5 from Mumbai, 5 from Bangalore, 5 from Pune and 5 from Chennai. Out of 25, you managed to fulfill 15 orders locally. Therefore, your regional utilization (RU) = 10/25 X 100 = 60% Why Should an eCommerce Business Figure Out Their Regional Utilization? Businesses calculate regional utilization (RU) for a variety of reasons, including: To Get Faster Order Fulfillment When inventory is stored in close proximity to your customers, their orders can be fulfilled at a faster rate due to the less amount of distance that needs to be traversed and less time needed to travel that shorter distance. For instance, if your company has fulfillment centers located in Mumbai and Pune and you get the majority of your orders from those 2 cities, fulfilling orders will be much faster than if your fulfillment center was located in Nashik.‍ To Achieve a Lower Amount of Returns If there is an unforeseen delay in the fulfillment of an order or delivery timelines are generally longer due to the physical distance between the fulfillment center and the customer, there is a higher chance of customers initiating a return. When businesses take advantage of regional utilization, they reduce the wait time that customers have to endure and thus, reduce the number of returns that are initiated. ‍‍To Save on Shipping Expenses By making use of regional utilization, you can save immensely on your shipping costs because prices increase along with distance and if the distance is shortened due to goods being located to the customers that order them, shipping expenses automatically decrease. To Increase Profit Margins Regional utilization not only reduces shipping and logistical expenses, it also increases the efficiency of fulfillment operations, including saving money on returns management. All these elements when put together lead to an overall increase in your company’s profit margins. Some more important uses of regional utilization are listed below: Finding the inventory allocation across the country according to demand Creating a successful strategy for effective deliveries Changing to a low-cost shipping module Increasing product visibility better helps your seller account on online marketplaces to perform better Reducing RTOs Increasing customer satisfaction by meeting their expectations Offering same-day delivery Storing different inventory items at different locations as per their order volumes 7 Ways to Improve Regional Utilization & Optimise Demand-Based Inventory Distribution in 2025 To improve regional utilization (RU), eCommerce businesses can adhere to 6 methods mentioned below:  Keep Warehouses at Multiple Locations A centralized warehouse is easy to manage, but it increases the cost and delivery time, affecting your revenue and customer satisfaction. It is always better to have decentralized inventory at multiple warehouses across the country to reach customers faster, that are located in any nook and corner of the country. Use a Demand-Based Inventory Model Source Instead of keeping all of your inventory in a single warehouse, consider using a demand-based inventory model that allows you to store inventory closer to your customers. This can help reduce shipping times and costs, and improve regional utilization. Have a Trained Resource Pool of Warehouse Operations & Delivery Personnel Trained human resources in warehouse management & last-mile delivery can make regional utilization easy, as they will ease operations and smooth your delivery processes. They can personally handle any task with great effectiveness. Opt to Partner with 3PL Partnering with a trusted 3rd party logistics company helps you to take more and more orders and then easily fulfill them. A few fulfillment partners come with the feature of same-day and next-day delivery and have micro fulfillment centers scattered across the country, which increases regional utilization. Never Risk Stock-Out of Inventory Always keep a minimum amount of inventory with you to deliver orders swiftly instead of risking stock-outs. MOQs, reorder quantity and reorder level can help you to avoid stock shortage and purchase it as per your demand, in addition to improving regional utilization. Optimize Data and Forecast Demand Data is the equivalent of gold in the digital market. In today’s world, every business is collecting leads. Data will help your company to forecast its demand and improve regional utilization to offer better order fulfillment. You will not be overloaded with inventory or face shortages during seasonal sales. (You can learn more about this here, seasonal demand) Look at data on where your orders are coming from, what products are selling the most, and when orders are being placed. This will help you understand your demand patterns and identify opportunities to optimize your inventory distribution. Use a Warehouse Management System A Warehouse Management System (WMS) is a high-tech software mainly used for warehouse management. It automates multiple warehouse processes which makes fulfilling orders faster and less prone to errors and mistakes. Inventory across multiple fulfillment centers and sales channels can be managed from a single dashboard. Suggested Read: 6 Steps for Effective Physical Distribution Conclusion: How to Optimise Inventory Distribution and Regional Utilization with WareIQ for Faster Order Fulfillment? Regional utilization (RU) is now the standard industry indicator for measuring the effectiveness of eCommerce companies, whereby shipping orders from the same area might greatly raise the market's profit margin. An increase in regional utilization (RU) can address the unbalanced dynamics of supply and demand, enabling quick fulfillment, significantly reducing shipping costs and enhancing the customer experience. By focusing on regional utilization, businesses can reduce shipping costs, improve delivery times, and increase customer satisfaction, which can all contribute to long-term success. We at WareIQ personalize your deliveries according to their demand, priority, locations, etc. We offer branded shipping and micro fulfillment centers across the country to enable regional utilization in most cities and towns. WareIQ is an eCommerce fulfillment platform that offers Prime-like logistics to online brands for same/next day delivery. You can split your inventory in-house or you can use a tech-enabled 3rd party fulfillment company like WareIQ to get access to fulfillment facilities that are strategically placed all over India. We combine a nationwide fulfillment & shipping network, a highly-skilled warehouse operations team and our vertically integrated tech platform & inventory planning product to drive: Over 30% accelerated sales with same/next day delivery options across 20+ marketplaces/D2C platforms 80%+ regional utilization & 40% lower holding costs 100% compliance with marketplace SLAs with 0% leakage claims in processing returns Regional Utilization: FAQs

June 29, 2022

How to Enhance Post-Purchase Experience in eCommerce With Order Notifications 2025?

How to Enhance Post-Purchase Experience in eCommerce With Order Notifications 2025?

The eCommerce industry is highly competitive, especially in a rapidly expanding market such as India’s, and the onus is on companies to try and find unique ways of differentiating themselves from the competition. As customers begin to order online more often because of the convenience that it brings, more and more are starting to get accustomed to useful convenience features such as ultra-fast delivery and seamless order tracking. In fact, research indicates that more than 83% of online shoppers expect regular updates about the status of their packages. This is where providing transparent and timely order notifications to customers can help to improve their experience and opinion about a company. Read along to get a detailed understanding of order notifications, the overall post-purchase experience and what it entails, and how WareIQ’s notifications app can help provide a stellar customer experience. What are Order Notifications? Order notifications, also called post-purchase notifications, are real-time alerts that are sent to customers to keep them informed about the status of their order and when it is expected to arrive at their destination. They can typically be sent on a variety of mediums such as email, SMS, Whatsapp and even customised platforms such as an order tracking app or a branded tracking page, where retailers are able to provide more detailed information such as product banners, social media links, information about the company and much more, compared to conventional channels. Order notifications are an extremely important facet of modern eCommerce retail as they enable customers, most of which run on extremely tight schedules, to make arrangements to be available to collect their orders. The details that are generally present in post-purchase notifications include the order number, tracking ID, and which stage of the fulfillment process the order is in such as “items have been packed”, “items have been dispatched” and “items are out for delivery”, and the estimated date and time that the package will arrive at the customer’s doorstep. [contactus_lilgoodness] 5 Elements Involved in Providing a Good Post-Purchase Experience to Customers Enhanced Communication Customers generally expect a basic after-sales experience that encompasses a feedback form and details about their purchase. However, something as simple as an appreciative email or message, thanking them for their service and saying a few words about how their business helps the company to stay afloat, goes a long way towards making them feel special and that they are actually valued by the firm. This will also increase the chances of them becoming repeat customers and recommending the company to their family and friends who have similar requirements. Customer Support Some companies often provide excellent customer support while trying to convert interest into a sale and during the delivery process, only to falter after the customer takes ownership of their order. A bad taste can be left in the mouth of a customer who has spent their hard-earned money on purchasing the products of a particular company, only to find that they are ignored or provided with sub-par customer support after the company no longer has an active interest in keeping them engaged. This is where companies can differentiate themselves by keeping a record of prior customers and their contact information, and giving them importance when they have an inquiry or issue. They could even be calling because they are interested in making more purchases so retailers need to capitalize on making them feel like their business is welcome. Increased Consumer Loyalty Research indicates that a customer retention rate of 5% can boost profits by up to 90%. Providing a seamless after-sales experience is essential for businesses who want to retain customers, whether it is through post-purchase notifications, promotional emails or messages thanking them for their business. Customers are more likely to repeatedly purchase from brands that they can trust and that have made a genuine effort to provide an enhanced experience to them, not just to sell them a product, but also to keep them in the loop about future events, campaigns, and new product launches. eCommerce customer feedback matters the most.   After-Sales Service It is easy to think of after-sales service as customer support but they are very different in practice and they each have their own role in providing a positive post-purchase experience to customers. While customer support is centered around more technical aspects such as answering calls and solving problems, after-sales service focuses more on making sure that customers are satisfied, even if there are no additional issues that arise. It encompasses things like product returns, facilitating exchanges and much more. Good after-sales service leads to happy customers so businesses need to focus on providing it. Heightened Customer Satisfaction Most customers have enough presence of mind to gauge the difference between genuine effort and doing the bare minimum. To achieve a high level of customer satisfaction, firms have to put in the time and avoid taking shortcuts, as that can often lead to poorer results than what was intended. Additionally, it is also important to keep track of the rate of satisfaction that customers exhibit when they have encounters with different departments of a business. Retailers need to push for feedback in order to understand what their strengths and flaws are so that they repeat and expand the procedures that work and mitigate or adjust the ones that don't. Importance of Post-Purchase Notifications in eCommerce Active Communication is Expected by Customers Post-purchase communication helps firms assert to customers that they genuinely appreciate their business and value their feedback as to where they succeeded and where they fell short, which allows them to make the relevant changes and adjustments to streamline every process and customer interaction. Customers also may have queries or product-related issues even after they have accepted their order so it pays to constantly be available in case they try and contact the company. Order Notifications are Anticipated by Customers It is overwhelmingly clear that customers expect constant and consistent alerts from retailers about the status of their orders, as is mentioned in an earlier portion of this blog. Order notifications provide insight to customers as to which stage of the order fulfillment process their package is currently in and when it will reach their destination, allowing them to make the necessary preparations to accept it when it arrives.  Post-Purchase Notifications Inspire Brand Loyalty and Positive Feedback from Customers The post-purchase interaction is the last thing that a customer will experience a business on their current order cycle so it is essential that they are left with a positive opinion. Not only does this increase the chances of them becoming repeat customers, but their positive and impactful reviews on a listing and other public forums can be the push that is needed to convince other potential customers to give the business a chance. 3 Ways in Which WareIQ’s Notifications through the “WareIQ Interact” App Enhances Post-Purchase Experience in 2025 Order notifications and post-purchase interactions are essential for providing a comprehensive and positive customer experience. Oftentimes, the after-sales services offered by a business are what matters more than the actual purchase itself. This is also something that many businesses neglect to offer so opportunistic retailers can use this as a means to stay ahead of the competition. And if they are partnered with WareIQ and have access to all of our post-purchase offerings, they are guaranteed to be on top of the eCommerce totem pole. If anyone is well-versed with downloading apps on the Google Play Store or Apple App Store, there won’t be a learning curve involved to seamlessly download and install apps on their custom WareIQ dashboard. One of our latest offerings to help retailers offer their customers an exemplary post-purchase experience is the notifications app. Designed to make sending order notifications and other after-sales interactions with customers as easy and seamless as possible, users can simply download apps with the press of a button. WareIQ’s post-purchase notifications app - “WareIQ Interact” enables online businesses to provide a powerful, personalized & automated post-purchase experience to their customers across WhatsApp, Email & SMS during the entire shipping journey. Through WareIQ Interact, you can deliver a personalized & interactive experience to your customers in 3 ways: Engage Customers Across Channels Drive up-sell & cross-sell opportunities by sharing notifications with customers across multiple channels – WhatsApp, Email & SMS Additionally, lower NDR & RTO rates by seeking direct confirmation from the customer over Whatsapp, Email & SMS Live Delivery Updates Share a variety of live updates regarding your customer’s consignment delivery & alleviate their shipping concerns Track Notifications Access the notifications dashboard to track the history of all communications sent out WareIQ not only offers services like order notifications and post-purchase services but also the entire gamut of operations that are associated with eCommerce fulfillment. This includes facilities such as: A nationwide network of fulfillment centers A custom WMS that can handle inventory management Integrations with multiple eCommerce marketplaces A choice of more than 20 of the largest shipping aggregators The most cost-effective and transparent pricing in the business Smart inventory placement Intelligent delivery assignment based on the quickest routes and cheapest prices No minimum order quantity A custom app store An RTO shield with insurance and liability protection Post-Purchase Experience: FAQs

June 29, 2022

10 Types of Shipping Notifications for Timely Order Updates and for Enhancing Customer Engagement in eCommerce in 2025

10 Types of Shipping Notifications for Timely Order Updates and for Enhancing Customer Engagement in eCommerce in 2025

Keeping customers informed about the status of their order by providing order tracking facilities is one of the pressing concerns of most retailers that operate in the current eCommerce climate, especially in a fast-growing market such as India, where the rate of new eCommerce shoppers is increasing rapidly due to the expanding number of people who are consistently gaining access to the internet and all the lifestyle benefits that come along with it. New customers are more likely than existing ones to be agitated about the status of their order and it is up to the eCommerce retailers to take the initiative to provide constant reassurance that their order will arrive on time. Regardless of whether customers are new or existing, providing real-time updates to the order status will instantly provide them with an enhanced customer experience. Read further to get detailed information on eCommerce shipping notifications, their importance and 10 types to keep your customers informed. What are Shipping Notifications? Shipping notifications, also called order notifications, are updates that are provided to customers about the status of their order to keep them up-to-date about when they can expect to receive it. Shipping notifications can be sent in a variety of ways such as through SMS, Whatsapp, email or even custom tracking pages. They help customers get a better understanding of whether their order will reach their destination on time or if there will be any delays in shipping so they can plan accordingly. The information that is generally present in shipping notifications includes the order and tracking ID, which phase the parcel is in such as “order confirmed”, “items packaged” and “in-transit” and the estimated time of arrival to the customer’s location. [contactus_uth] Importance of Order Notifications for eCommerce Businesses They Provide Transparency to Customers Modern eCommerce customers generally expect that they will have the ability to track their order, whether it is in the form of notifications sent through a messaging app or a branded tracking page that provides them with all the information they need. Customers generally do not like to be kept waiting, regardless of if their food is taking longer than expected when they go to a restaurant or if there is a long check-out queue at a supermarket. This holds especially true for eCommerce retail because they do not have a physical sense of where the product is. Providing transparency through shipping notifications is essential to keeping customers informed at every step of the delivery process. They Enhance the Brand’s Image Customers appreciate it when a business makes the entire process of purchasing a product online to it being delivered to their doorstep as seamless and efficient as possible and order tracking notifications play a big role in that. Even if a delay occurs or an unforeseen issue arises, they will be less likely to attribute it to the business because they are being kept informed about any happenings in real-time. If a customer does not have to go through the effort of having to take time out of their busy schedule to deal with customer care personnel to find out where their order is and instead, can just automatically receive updates as to where their order is and when it will be delivered, their opinion about your business will instantly skyrocket because people appreciate convenience and ease-of-use. They Mitigate Concern From Customers  Order notifications generally reduce the number of frantic inquiries from customers about where their order is. Customers who order online, especially ones that don't have much experience with it, are more apprehensive than if they had purchased their products in a physical store, due to the fact that they cannot touch or see the order until it has been delivered to their doorstep and this is even more amplified for Cash-on-Delivery (COD) orders because they have already paid for it and do not want to risk getting scammed and losing their hard-earned money. Shipping notifications help give them peace of mind by automatically providing constant updates every time the parcel enters a different phase of the fulfillment process so they never have to wonder about where their package is. 10 Types of Shipping Notifications to Keep Customers Informed Order Confirmation This is generally the first interaction with a customer after they have ordered an item and it is confirmed by the company. It can be in the form of an automated email or message informing the customer that their order has been received and is currently being processed. In the event of a payment error, if it is a prepaid order, businesses will also have to keep track of whether the money has been credited to their account and notify the customer accordingly. Order is Being Shipped An automated notification can be triggered through the business’s preferred contact medium, that the order is being shipped. This refers to the process of the order being picked up from the warehouse or fulfillment center by the relevant shipping aggregator, who will then transport it to the city or town where the customer is located. Customers are generally reassured when they see this notification because it means that the order has been successfully dispatched from the warehouse, without any complications. The order status can be provided with the ETA as retailers will generally have a better idea of when the package will reach once it is in transit. Suggested Read: 5 Easy Steps to Ship Order Consignments in 2025 Order is Sent for Delivery Once the order has been shipped to the city or town where the customer is located, the ground-level delivery personnel will be assigned the task of last-mile delivery to the customer’s doorstep. As soon as this happens, the order tracking page needs to reflect the updated status and a notification should be sent to the customer with the estimated delivery time to ensure that they will be available to collect it. The contact details of the delivery executive can also be provided in case there is any issue en route to the customer’s destination. Order is Successfully Delivered After the order has been successfully received by the customer, a notification can be sent to the customer detailing all the relevant information such as the product, amount, payment method, date of order confirmation and date of delivery. Retailers can also use this as an opportunity to promote similar or complementary products, provide tips for product maintenance and push for feedback about how the whole interaction with the company went, from purchasing the product to receiving the delivered item. This will help retailers generate positive feedback in the case of successful delivery or identify areas of improvement, in the event that the customer is displeased about something. Order is Cancelled, if Applicable Orders can be cancelled at any time, for a variety of reasons. In the event of a cancellation, customers need to be notified that is successfully done and that the order will no longer be delivered to them, to avoid any confusion. Retailers can also push for feedback regarding the reason for the cancellation and provide assurance that their money will be refunded within the relevant number of days, in case they have already paid for it. Order is Delayed, if Applicable Shipping notifications must be sent if any delay or issue occurs before the order has been delivered or dispatched. Delays could occur for a variety of reasons, in any phase of the fulfillment process, such as the product being out of stock at the warehouse, the delivery partner being stuck in traffic or bad weather and much more. It is the duty of the retailer to inform the customer about these delays and adjust the ETA, if necessary so that the customer will be informed and can better plan to be available to receive the order on the revised delivery date. Order Has Had an Unsuccessful Delivery Attempt Oftentimes, the delivery executive reaches the customer’s location, only to find that there is no one to collect the order. This is due to a variety of factors and even the slightest variation between the ETA and the actual delivery date and time can cause the customer to be unavailable and not be able to make prior considerations. Order notifications need to be sent to inform the customer that a delivery attempt was attempted unsuccessfully and can inquire about an adjusted date as to when they would be available to collect it. Order is Undeliverable Due to Loss or Damage Even with the use of advanced order tracking systems, goods can sometimes still get misplaced or damaged in transit, which is out of the retailer's control. If such an incident occurs, it is best to send a shipping notification to the customer informing them of the event and reassuring them that a new replacement order is on its way. Even though unforeseen circumstances may occur, retailers can maintain customer satisfaction by handling it in an appropriate manner. Return Initiation by the Customer Returns can occur for many different reasons, some of which can be blamed on the retailer such as damaged products being received, wrong items being packaged at the warehouses and unforeseen delays. However, there are many instances where returns are initiated due to no fault of the seller such as buyer's remorse from the customer, them finding a better deal elsewhere or simply because they changed their mind. Either way, when a return is initiated, an order status notification can be sent to the customer containing an acknowledgement of the return, a summary of the condition of the returned items, a status of the refund of the payment, if any and more. You can read more about how companies manage returns. Exchange Initiation by the Customer In some situations, customers opt for a product exchange, rather than a return. During these circumstances, shipping notifications can be sent containing an acknowledgement of the exchanged items, an adjustment to the price if needed and all the conventional order tracking notifications such as “order confirmed”, “order has been shipped”, and “order is out for delivery” and “order has been delivered”, to make the customer aware of the order status of their exchanged products. Conclusion: How Can WareIQ Help to Provide the Best Shipping Notifications to Customers in 2025? Shipping notifications have become an essential component of the eCommerce fulfillment process. Customers demand to be kept up to date about the status of their orders and if they aren’t, the business can face a significant amount of backlash, which can have a further negative impact on attaining new customers. Order notifications can be easily provided due to the vast amount of technology that is available. However, if you are an eCommerce retailer and want to provide a truly personalized experience to your customers, you can consider partnering with WareIQ.  WareIQ is one of India’s fastest-growing eCommerce fulfillment providers that uses a centralised technology platform to enhance the experience of retailers and their customers. We provide a vast array of services that encompass the entire suite of fulfillment operations from storing your inventory in our fulfillment centers to delivering products to your customers. In terms of providing shipping notifications and a stellar customer experience, we offer the many services, some of which are listed below: Branded Tracking Pages Our branded tracking pages allow retailers to provide a truly personalized experience due to the high rate of customization that can be tailored to each individual customer. Instead of just a generic tracking screen, you can insert product banners, information about your brand, social media links and much more. Customers will end up spending more time on the tracking page, browsing through complementary products and getting a better idea about your company, which can even lead to repeat purchases. This will definitely enhance their experience and make your brand stand out from the rest. Notifications App - WareIQ Interact We provide a custom app store with multiple downloadable apps to enhance various aspects of your business productivity, similar to the Google Play Store or the Apple App Store. WareIQ offers a notification app named “WareIQ Interact” where every element can be customized and multiple orders can be tracked right from the app, with no external page or link needed. This enables retailers to be more organised and get insights into every order in real-time. eCommerce brands can use WhatsApp, Email & SMS to automate order status communications during the entire shipping journey. With WareIQ Interact, online brands can engage customers in the following ways: Share consistent communications with their customers to build a brand their customers can trust Alleviate shipment-related anxiety & boost trust in the brand leading to repeat sales Open new avenues for growth by cross-selling & up-selling Reduce the volume of NDR & RTO orders, leading to lower losses Customer Care We also offer customer care facilities so anytime a customer has a query or an unforeseen issue arises, our team of trained professionals will be there to get everything back on track as soon as possible. This provides assurance to you and your customers that you are backed by a dedicated team with multiple resources at their disposal to troubleshoot any problem that may arise. Shipping Notifications: FAQs

June 28, 2022

Reorder Quantity Formula: Guide, Definition, Importance, and 3 Simple Calculation Steps for 2025

Reorder Quantity Formula: Guide, Definition, Importance, and 3 Simple Calculation Steps for 2025

The inventory of an eCommerce business is its most important asset and one of the most complex and crucial facets of operating an online store is inventory management. Additionally, it gets harder to keep track of stock levels with the more SKUs you have. Without effective inventory control, you can face situations such as overstocking products, which might expire or become outdated before you sell them and running out of stock, and losing clients and sales opportunities. It takes the right balance to have the proper quantities of a product. The reorder quantity formula is used by eCommerce companies to calculate this. Generally, they use the economic order quantity (EOQ) formula to reduce the cost of transportation, warehousing space, stockouts, and overstocks so that they can determine the ideal order amount. One of the best techniques to calculate the number of goods you need to purchase to maintain the proper stock levels is using the reorder quantity formula. Let us go into detail to understand what it entails. What is Reorder Quantity? Reorder quantity is the total amount of units of a product that you seek from a manufacturer or supplier for an inventory replenishment purchase order. The precise number shouldn't be too high so that you have too much capital invested in inventory and subsequent increased storage costs but it also shouldn't be too low so that there isn't enough safety stock and you have the danger of running out of inventory before you can order the next batch. The ordered amount or number of units must be optimal while taking into account a variety of elements, including the cost of the order, the cost of transportation, the cost of transporting the order, etc. The reorder quantity strikes the best balance between a number of variables, including quantity discounts, freight, storage expenses, and the need for working capital. [contactus_gynoveda] 3 Easy Steps to Calculate Reorder Quantity Using the Reorder Quantity Formula Determine Average Daily Usage Average daily use refers to the number of your product's units that are sold each day. Usually, thirty days is a common timeframe but it changes during different seasons or festivals. For instance, if you need to place an order for a product before a festival, your ADU should be determined using that festival’s ADU from the previous year. Calculate Average Lead Time Average lead time refers to the time span between when a supplier receives a purchase order and when they deliver it to the seller's warehouse or fulfillment center. The average lead time is calculated in days. If you reordered inventory on 1st January, your average lead time is 30 days if it is available to be used to fulfill customer orders by 30th January. Calculate the Reorder Quantity You can determine how much inventory you need to reorder by multiplying average daily use (ADU) and average lead time (ALT). Let's have a look at how to determine the reorder amount for a specific product: -ADU is 25 -ALT is 30 days Your reorder quantity using the reorder quantity formula will be: =ADU X ALT =25 X 30 =750 Recalculating your reorder quantity frequently is advised, especially as your order volume rises and if you sell seasonal items. When the reorder level is determined properly, replenishment stock should arrive immediately before the number of units of the existing stock drops to zero. Why is the Reorder Quantity Formula Important for 2025? Helps to Avoid Stockouts Lost sales result from low inventory. Backorders and split shipments are always an option, but they don't provide a seamless consumer experience. Reorder quantity allows you to order just enough to fulfill orders until your next purchase, while reorder level allows you to secure a recovery in time before your inventory runs out and helps handle stockout. Assists in Minimizing Expenses Additionally, you should avoid overstocking your inventory which will ultimately block your capital. You will need to expand your warehousing storage capacity or opt for storing items in multiple warehouses if your stock levels are too high. By estimating reorder quantity, you will be able to maintain just the right amount of inventory which will result in lower storage costs, less wastage, and fewer operational costs. Helps in Managing Inventory You can set up notifications in your inventory management system, allow live inventory tracking, and manage changes in demand over time when you know precisely how much to reorder and when you need to replenish by using the reorder quantity formula to calculate the reorder quantity you need. Example of Calculating Reorder Quantity You don't require reorder quantity calculator always, just using the 3-steps mentioned before we can calculate reorder quantity in a minute. To calculate your reorder level, multiply your average usage rate by the lead time for an inventory item. Be diligent while entering the time values you are using. If you are calculating average daily usage then put the lead time value in days. Suppose, Rajesh experiences an average daily sale of his items as 2500 units and the lead time for producing new units is 7 days, the re-order level will be: 2500 units x 7 days = 1,75,000 units.  When the inventory level of items is left at 1,75,000 units in stock, Rajesh needs to reorder and stock more units. By the lead time the additional units arrive in 7 days, the on-hand inventory balance may have reduced to zero. Reorder Quantity vs Reorder Points Reorder Quantity and Reorder Point are two essential concepts in inventory management. They help businesses maintain an optimal level of stock and avoid stockouts or excess inventory. Reorder Quantity (ROQ) refers to the amount of inventory that should be ordered each time a replenishment order is placed. It is typically calculated by considering factors such as demand rate, lead time, and desired safety stock level. The goal of determining the reorder quantity is to balance the costs associated with ordering and holding inventory. On the other hand, the Reorder Point (ROP) is the level of inventory at which a replenishment order should be placed to avoid stockouts. When the inventory level reaches the reorder point, a new order should be placed to ensure that stock arrives before running out of inventory. While the Reorder Quantity determines the amount to order, the Reorder Point indicates when to place the order. These two concepts work together to ensure a smooth and efficient inventory management process. Reorder Quantity VS Reorder Level: 4 Key Differences Differences Between Reorder Quantity and Reorder Level are listed down here; Comparison Chart [table id=32 /] We Hope, this table of reorder quantity vs reorder level made the concept clear. Helps to Avoid Stockouts Lost sales result from low inventory. Backorders and split shipments are always an option, but they don’t provide a seamless consumer experience. Reorder quantity allows you to order just enough to fulfil orders until your next purchase, while reorder level allows you to secure a recovery in time before your inventory runs out and helps handle stockout. The latter is calculated using the reorder point formula.  Conclusion: How Does WareIQ Help eCommerce Firms to determine their Reorder Quantity Accurately? For an eCommerce business to be managed successfully, knowing how much inventory to repurchase is the most important question to answer. With the help of the reorder quantity formula, you know that your incoming and outbound logistical workflows are being improved by ordering the proper quantity of goods. With the help of WareIQ, eCommerce businesses can manage inventory, forecast demand, pack orders, lower shipping costs, and fulfill customer expectations. We will optimize your data in real-time, automate your reordering quantity and move your inventory to relevant warehouses that are nearest to high-demand locations and transportation hubs if you choose us to store goods in our fulfillment centers. WareIQ helps brands improve their shipping strategy with a nationwide network of fulfillment facilities and technology that is integrated with the leading eCommerce platforms. Also read: What is Order fulfillment, its steps and strategies Reorder Quantity Formula: FAQs (Frequently Asked Questions)

June 27, 2022

How to Calculate Reorder Level: Definition, Advantages, and 5-Step Formula [2025]

How to Calculate Reorder Level: Definition, Advantages, and 5-Step Formula [2025]

By being able to execute proper business calculations, eCommerce retailers can advance in their goals. In the eCommerce industry, knowing when and how many products you require to fulfill orders is crucial. One method to show your aptitude for forecasting inventory and assisting your business in maximizing profits is by performing these calculations precisely and efficiently. Timing and the amount of inventory ordered should be accurate. If you have all the data, you can automate the re-ordering process. Today we will go into detail about the reorder level and how to calculate it using the reorder level formula, examples in different scenarios to maintain your inventory needs, and much more. What is a Reorder Level? Reorder level, also known as reorder point in management accounting, is the inventory level at which a business would place a new order or begin a new production run. Reorder level is influenced by a company's lead time for work orders, demand during that period, and whether or not it should keep a safety stock. The time it takes the company's suppliers to manufacture and deliver the ordered units is known as the work-order lead time. It is critical to determine the appropriate reorder level. A company may receive the ordered units faster than anticipated if it places a fresh order too soon and this could result in increased carrying expenses such as storage rent, opportunity costs, etc. Conversely, if an order is placed too late, the company would incur stock-out expenses, such as missed sales and customer dissatisfaction. [contactus_uth] Advantages of Reorder Level A conventional advantage of reorder level is to avoid stock shortage. Reorder levels are important since they enable a company to increase productivity and perhaps even revenues and profits. This is due to the fact that acquiring the right quantity of inventory can help the company run effectively while avoiding uncertainties like product waste.  Reorder levels that are precise also aid in lowering carrying costs and other costs related to storing inventory. Rent, insurance, and potential spoilage are some carrying expenses that can be avoided or decreased with prudent ordering levels. Reorder level calculations are another useful tool for ensuring uniformity among team members when several people are in charge of issuing orders. The stock requirements are automatically activated at the order point. You may optimize your inventory list and reduce administrative time by using the reorder level model, which is a helpful decision-making tool. This reality enables you to concentrate on bringing value to your company while letting the system function on its own. Using this system has a number of benefits, including: Providing better service to both internal and external customers Preventing delays throughout the supply chain Lowering the inventory cost Maximizing the space in your inventory Staff members focus on value-added tasks while saving time Putting facts and evidence in front of speculation Forming a communication bridge between seller and manufacturer Avoiding overstocking Avoiding getting the items too early Preventing your capital from getting held up Making inbound and outbound logistics more efficient Reorder Level Formula: Calculation in 5 Simple Steps in 2025 Reorder Level or Reorder Points can be calculated in 5 Easy Steps explained below; Determine Your Average Demand The very first step is determining the average demand for a product or material. This refers to how many units of a specific commodity you sell or utilize over a certain period of time. There could be several retail items you require each day, week, or month, such as dishes, shoes, laptops, etc. You might also need a specific quantity of manufacturing material over time. Because demand may change from one period of time to the next, try estimating your inventory utilization over several of your chosen time periods and calculate the average of those results. This might be especially true for businesses or products that depend on outside factors. Calculate Your Lead Time The lead time is the period of time between when you place an order till the time you receive the shipment of goods. Use the same time unit (days, weeks, months, etc.) that you used to establish your average demand to calculate your lead time. You should calculate your lead time in days if your average daily demand is 100 goods. The wait time would be measured in weeks if your demand was 100 products per week. If deliveries are regular, you can generally automatically establish your lead time by looking up your order and delivery history. If delivery times are unpredictable, get the average lead times of a large number of orders. If outside circumstances affect how long it takes to get a delivery, use alternative lead times. Decide if You Should Keep a Safety Stock Determining whether you maintain a safety stock or not, depends on your preference. You will have to use a different formula for your reorder level for different situations. A business may retain some goods or materials on hand as safety stock in case certain circumstances arise, such as an unexpected spike in demand or a delivery problem. If you want to know if your inventory needs a safety buffer, compare the amount of stock you maintain on hand versus the amount you sell or use. You can also work with a business executive to determine whether your organization has a policy of maintaining a safety stock on hand and whether you should factor this into your reorder level. Any adjustments you might make or recommend making to your inventory levels should be communicated clearly. Use the Reorder Level Formula Calculate reorder levels with the proper formula using your average demand, lead time, and safety stock. The formula is as follows: Reorder Level Formula = (Average Demand × Lead Time) The formula in case safety stock is kept by the company: Reorder level = [(Average Demand × Lead Time) + Safety Stock] Your average demand and lead time should be calculated in the same unit of time. Your lead time should be calculated in days if your demand is calculated in units of products per day. Your lead time should also be measured in weeks if your demand is too. To ensure accuracy, think about working on your calculations simultaneously or asking a teammate to do so. You can also read this detailed article on Reorder Quantity Formula. Assess and Adjust as Required Finally, review your reorder level calculations and make any necessary adjustments. You might need to adjust your reorder level to account for the increased demand if, for instance, you find you are running low on the item before your next purchase comes in. You might need to modify your reorder level if orders start showing up with time changes. Determining a Fixed Reorder Level Stock While determining a fixed Reorder Level Stock the following factors are involved: Rate of Material Consumption It is the amount of material or number of items you sell in a lead time period. The material and items are averaged as per the duration of the time frame taken. Safety Margin Before you calculate the reorder level, you should keep a safety margin of stocks with you in case of higher demand than the average demand level.  Delivery Period or Lead Time The average delivery period or average lead time is the time taken to get the stock after placing an order to your merchant or directly to the manufacturer. Maintaining a Minimum Stock Level Minimum stock level maintenance specifically helps small and medium-sized sellers and sellers who have limited storage space in different locations. This keeps your business supplied with stock and helps avoid uncertainty in inventory. Storage Fees and Interest on Materials-Related Capital Investments This is the crucial part to think about. You may calculate and order inventory as per your demand and your capacity to fulfill orders. This is not applicable if you have your own storage facilities but if you partner with a 3PL fulfillment company and use their fulfillment centers to store inventory, you will have to pay monthly subscription fees or for the amount of storage you are utilizing. Having an Emergency Fund Keep aside an excess amount of capital in liquid form to tackle uncertainties like machine breakdowns, supply-chain failures, increases in rates, etc. Many times, work is on hold in the logistics chain because of payment dues for certain processes. Read how should you plan your logistics in eCommerce. The Reorder Level of Stock Calculation in Different Circumstances Case 1 – Without Safety Stock Mr. Sanjay’s bookstore sells 200 books on average in a week. The maximum demand in a week is 217 laptops. If the lead time is 3 weeks then the reorder level calculation using the reorder level formula would be: Reorder level = Maximum usage(weekly) × Lead time (in weeks) = 217 units × 3 weeks = 651 units It means that every time the number of books decreases to 651, Mr. Sanjay’s bookstore must place a new order. Case 2 – With Safety Stock Suppose you are a bike seller with the following figures: Demand Minimum Demand: 40 bikes per month Average Demand: 50 bikes per month Maximum Demand: 60 bikes per month Safety Stock: 15 bikes Lead Time Minimum Lead Time: 1 month Average Lead Time: 1.25 months Maximum Lead Time: 1.5 months The reorder level of your outlet using the reorder point formula would be: Reorder Level = (Maximum Demand × Maximum Lead Time) + Safety Stock = (60 units × 1.5 weeks) + 15 units = 90 units + 15 units = 105 units Note: Both demand and lead time must be expressed in the same time unit, i.e., in days, weeks, etc. Modified Reorder Level Formula The amount of reordering presumes a constant pace of inventory consumption, which is usually false. For instance, if usage levels fluctuate often, the reorder level will be too low, resulting in a lack of inventory when it is required for production. On the other hand, this reorder procedure will result in having too much inventory on hand if actual usage decreases. It might be helpful to account for extra stock on hand and replace the average daily usage rate with the maximum daily usage rate in the reorder point formula in order to prevent stock-out situations. The revised reorder level formula is as follows: | [(Maximum Daily Usage Rate x Lead Time) + Safety Stock] | Conclusion: Choosing WareIQ for Faster and More Accurate Reorder Levels After understanding the importance of reorder level, it is understood that establishing reorder points is beneficial so that you can reduce your capital investments and make sure that your company is running as efficiently as possible in terms of both inbound and outbound logistics. The requirement for accurate data for supply chain planning and presenting a precise picture of customer demand is the most crucial and occasionally, most difficult aspect of effectively calculating reorder levels. You could wind up with too much or too little stock if the data is incorrect and the calculation is wrong. Also chech a guide on order fulfillment WareIQ can help eCommerce firms to manage inventory, anticipate demand, pack orders, cut shipping costs, and meet consumer expectations. In case you seek to store inventory in multiple WareIQ fulfillment centers, we will automate your reordering levels, optimize your data and reshuffle your inventory to relevant warehouses that are close to high-demand locations and transport hubs. WareIQ assists brands in enhancing their shipping strategies with a network of fulfillment centers spread out across the country and technology that is integrated with the top eCommerce platforms. Reorder Level Formula FAQs

June 24, 2022

What are Fulfillment Services for eCommerce? A Detailed Guide in 2025

What are Fulfillment Services for eCommerce? A Detailed Guide in 2025

To understand what fulfillment services are, why it's essential in 2025, and their benefits for your business, we need to first talk about the supply chain issues faced by many eCommerce retailers. Since the pandemic began, we've all been experiencing problems with shipping aggregation and the supply chain. The challenges we have experienced began with pandemic-related restrictions and shutdowns. Without supply chains that can keep up with current demand, vendors have had trouble getting the supplies and goods they needed. This negatively impacts customers, as they waited for their products to be delivered. The delays were worsened by other factors such as weather, lack of warehouses, labour shortages, etc. These factors were compounded when they created a flow that caused delays. This was a trend across eCommerce enterprises and affected all parties involved. Many fulfillment services that deliver goods suffered cash flow issues due to the pandemic. The customer’s impression of your company is determined by how they feel while receiving their order. Successful fulfillment platforms and branded shipping improve customer satisfaction and build a better brand presence. For customer satisfaction, streamlining and optimising your fulfillment services is critical. The online and offline elements of the business should work together to ensure that customers are satisfied with the service they receive, both in-store and through the shipped product. What is eCommerce Fulfillment? eCommerce fulfillment is the process of completing online orders. If someone orders your product via one of your online stores, you must deliver it quickly and at a reasonable price. An eCommerce fulfillment service deals with the process of customer orders, specifically receiving, storing, and shipping. It is also responsible for processing orders and dealing with customer returns. A well-planned and professionally managed eCommerce fulfillment service saves both time and money and is only one of the necessary parts of an extensive eCommerce business. The core feature of successful online retail are well-executed fulfillment services that help you expand your market reach and build customer loyalty by improving your efficiency. [contactus_gynoveda] What are the Steps Involved in the eCommerce Fulfillment Process?  Product Receiving The first operation included in fulfillment services is receiving. When your products are delivered to the fulfillment center, they are entered into inventory and placed on shelves where they are ready to be shipped. It is useful to organise these products according to their delivery dates. You can accept and fulfill requests manually. Or, if you switch to using software to do it, you can integrate your cart or marketplace that will automatically look for orders based on the inventory. Inventory Management Proper inventory management means systematically tracking all products so that if and when you run out of goods, they are immediately replenished (know more about stock replenishment). The IMS can store and manage products in your inventory, meaning you won't have to worry about the logistics costs of product handling. Continuous processes such as audit functions should be performed regularly to avoid complications in fulfillment services. Inspect your stock to ensure that items are in good shape, and discard any damaged items. If you're missing an SKU, refer to your inventory or CRM software to track it down. One of the main challenges that retailers face is inventory management because they may not know what their customers want and need. Partnering with a competent fulfillment service provider, being organised, and staying informed about inventory levels can solve this issue. Order Fulfillment An eCommerce business can self-fulfill their orders or hire fulfillment services to do it for them. This includes the following three activities: Picking: It can take days for a company to fill an order. Selecting the product to be fulfilled is the first step in the process. You can pick from a single location or multiple locations across your warehouse if you have different products at each site. To quickly fulfill orders, find reliable staff that can handle the logistics at your warehouse. If your business receives many orders, it will be best to have staff dedicated to this process. The speed increase with this methodology is significant. Faster and hassle-free automation as well as partnering with fulfillment partners can be implemented to improve the pick and order process. Automation can create smaller orders and send them to the consumer in one batch.  Packing: Once all the items in an order have been picked up, they must be adequately and attractively packaged. Packaging is an essential aspect of order fulfillment services because it is a physical reflection of your brand presence. Hence, you should concentrate on various packaging plans and choose what works best for your brand image. You should make sure that your packages are labeled and ready to be shipped. In either case, you should use a good packing strategy to ensure the safety of your package. Custom packaging could also be made available.   Shipping: Logistics is crucial in order fulfillment services. Having a timely shipping experience can boost the experience of your customers and make any trouble or delays with shipping, less likely. The transport of goods often includes selecting a transport company and fulfillment services. Reverse/Return Logistics Reverse logistics is about tackling all the items that were returned. Rising competition in the market means that return orders are inevitable. Any company must manage this process efficiently. If your fulfillment service processes your items faster, they will quickly process the refunds. This would lead to the items and the refund being completed faster. Many fulfillment service providers allow you to automate your non-delivery report and handle the refund of orders. Since they take responsibility for all rebates, they can also dramatically lower the number of returns you may have to process. What are Some Common Misconceptions About Fulfillment Services?   Warehousing and Fulfillment are Interchangeable Terms This statement is false. The terms warehousing and fulfillment are not the same. Warehousing refers to storing products in a particular place until they are ready to be distributed. Fulfillment refers to the entire process of delivering a product to the end customer. A distribution center created by 3PL fulfillment services is traditionally used only for order fulfillment and inventory management. Fulfillment centers, however, also take on order management duties and fulfill orders given by purchasing departments.  The Fulfillment Center Should be Closer to the Business Location Shipping can become more expensive if you're shipping to your location (business) rather than your customer's location. You have to pay for the extra cost of having items shipped from the fulfillment center closer to your location. It can be challenging to maintain inventory and storage, as you will have to make compromises on-site. You need to try and have your fulfillment centers located closer to the customers to enable faster delivery. Self-Fulfillment is the Cheapest Way to Fulfill Orders Automation is beneficial if you ship out less than ten orders per day. But if you ship more than 20 to 30 orders each day, we recommend taking a shot at outsourcing your needs to fulfillment services. Training facilities and resources are necessary for a business's success. Without these, it would be hard to innovate and update products quickly. It Will be Much Cheaper if a Fulfillment Center is Located in a Tier-2 or Tier-3 City It can be challenging to maintain inventory and storage, as you will have to make compromises at the location. It might be cheaper in the short run to store your products in a remote, out-of-the-way place and deal with slower shipping, but you need to research the area of your target audience to avoid higher combined shipping costs. Try to have your fulfillment centers closer to the customers to reduce costs. What are the Benefits of eCommerce Fulfillment Services? Focusing on Core Business Outsourcing can free up time spent on mundane tasks. Rather than wasting time taping boxes, invest your time in growing your business. As a business grows, order fulfillment becomes more complex and risky. You can lower your risk of delays by outsourcing the shipping process to a third-party eCommerce fulfillment service. It will give you the time and resources to focus on other tasks like designing your products, marketing them, and selling them. Lowering Shipping Costs You won't benefit from the negotiated shipping rate if you ship orders yourself. Fulfillment services have warehouses all over the country and divide your inventory, so you don't have to pay for distribution in one location. They utilise tools to compare rates with couriers to reduce shipping fees. By partnering with a 3PL eCommerce fulfillment partner, you can get your inventory to the customer's door quicker and cheaper. By shipping from more than one location, you can maintain bulk items closer to customers, which leads to faster delivery. Increasing Shipping Speed Outsourcing fulfillment services will allow you to provide faster delivery. You can place inventory closer to your buyers and have warehouses all over the country for efficiency. Retailers need to be able to ship products quickly to customers and meet demand. An eCommerce fulfillment partner can help you do just that by meeting expectations and competing with big stores. Establishing Fulfillment Infrastructure It can be a nightmare to deal with the storage of orders if you handle them on your own. Storage entails a lot of eCommerce warehousing and operating tasks, which can be solved using asset and inventory management software. To have a fulfilling infrastructure, you need to have people working for you and providing storage and security.  All of this comes at a significant monetary investment. When you outsource to a 3PL eCommerce fulfillment service, you will have access to improved storage space and won't be penalised for your usage. If you have fluctuations in sales volume, they have plenty of resources to deploy according to your order demands. WareIQ's Fulfillment Solution Keeping Buyers Up-to-Date Online buyers need consistency and transparency when buying products to trust the company they are purchasing from. If you use fulfillment services or outsource your needs to a third-party eCommerce fulfillment service, you can provide accurate delivery confirmation at the checkout page. They have an experienced workforce, and the capacity to deliver on time. Reducing Operating Costs Moving fulfillment services to an external location can be costly, but businesses often overlook the fact that self-fulfillment also has costs. Inventory storage is a significant expense and will continue to grow as eCommerce retail evolves. Additionally, outsourcing fulfillment services often lead to high rental fees for warehouse space. Outsourcing to third-party eCommerce fulfillment providers can save overhead costs by only paying for necessary items. You are also insulated against seasonal changes in sales volume. Expanding Your Reach You can receive orders from any state or country with an exemplary eCommerce fulfillment service. Organised and efficient fulfillment will help you reach your business goals. It can be intimidating to understand complicated international shipping and customs rules when managing orders on your own. International shipping rates are even more complex because they are governed by different regulations and currencies. As a result, many retailers keep their shipping options local or regional. But outsourcing fulfillment services can help you get your products to more people. Many fulfillment services have the infrastructure for shipping around the world. Accessing Superior Technology With a tech-enabled 3PL eCommerce fulfillment service, you can gain access to periodic inventory reports and crucial metrics that can assist you in making strategic decisions. A 3PL will provide you with real-time access to essential data such as insights on inventory and orders, forecasting, determining zones for distribution, and performance reports.  What are the Costs Associated with Fulfillment Services?  When calculating the costs of an eCommerce fulfillment service, different models need to be considered. There need to be calculations on the warehousing and fulfillment services and the channels and types of distribution.  Self-Fulfillment When it comes to self-fulfilling orders, you need to take out loans due to the excessive use of resources. Staff needs to be trained in picking and packaging, and storage space and shipping services must also be obtained. 3PL Fulfillment 3pl Fulfillment services are a great way to scale your business up. It is a cost-effective solution, as it allows people to avoid all sorts of expenses, including labour costs and other miscellaneous costs. You only need to find a 3PL eCommerce fulfillment service and choose the fees you want to pay. Customers must pick 3PL fulfillment services closer to their location for an optimal experience. Dropshipping Early in a business, you don't have to invest any real money. Instead, your suppliers cover all the manufacturing, storage, and shipping costs with very little administrative or customer interaction. However, as your business grows, it can be hard to scale up if you need to maintain relationships with multiple channels. Fulfillment by Amazon Fulfillment by Amazon is when an Amazon.com seller sends their products directly to Amazon fulfillment centers. It's only for products on Amazon that have Prime status, and it's the most expensive option when selling on Amazon. With Seller-Fulfilled Prime (SFP), Amazon shipping can be outsourced to different sellers who are trustworthy. Sellers can receive their orders within two days with FBA. FBM, which has a lower cost, renders all Fulfillment services through the seller and is responsible for purchasing and maintaining inventory and handling customer service but provides no Amazon packaging. Which Types of Businesses are Best-Suited for eCommerce Fulfillment Services?  One way for businesses to sell products more efficiently is by using an eCommerce fulfillment service. It can be beneficial for some industries, such as eCommerce retail. Accessories Fulfillment Source If you sell accessories, you can rely on more efficient third-party fulfillment services by automatically fulfilling any orders at the time of purchase. Beauty & Makeup Fulfillment You want to make sure that your makeup is shipped carefully so your customers can conveniently pick it up. Make it a point to consider the ease of transmission - even if you're sending a small package. Apparel Fulfillment Source Delivery of your clothing items is integral to running a successful garment outfit. With discrepancies in sizing, colour, and styles, working with 3PL fulfillment services that competently coordinate order volume is essential. A 3PL eCommerce fulfillment service should also offer the provision of a return, mainly when customers try on their order before purchase. Diet & Supplement Fulfillment The US FDA doesn't regulate dietary supplements, but for a rapidly growing market, it is essential to be able to ship and track inventory. 3PL fulfillment services ensure that this innovative business can expediently deliver products. Electronic Appliances Fulfillment Customers often need customer service when they order items online. Ensure your company offers customer service in addition to quality products and proper storage. Toys Fulfillment Selling toys is unpredictable unless you forecast and plan. Inventory and forecasting tools work better with 3PL fulfillment services with software to manage the process. Pets Accessory Fulfillment Source Customers are trusting when they purchase pet accessories from a company. They have high expectations for transparency during the purchases of your brand's products. 3PL fulfillment services are necessary to create and fulfill consumer desires. Collectibles Fulfillment eCommerce brands need help storing inventory and fulfilling orders. Etsy and Facebook Marketplace are some companies that cover the growing market for other items people are willing to buy. Home & Kitchen Appliances Fulfillment Kitchen appliances are constantly being developed, with people looking for the following new and innovative products that can be bought on the internet. Luxurious Goods Fulfillment Luxury goods can be vulnerable and fragile, so 3pl fulfillment services take excellent care to ensure your items are finely handled throughout storage and processing. They have virtually no cases of broken or damaged luxury goods. Games Fulfillment If you have an excellent idea for a game, the eCommerce market is the best place to sell it. However, the industry can be competitive, so optimising your retail fulfillment process is one way to stand out. Equipment Gear & Outdoor Fulfillment You need a reliable logistics eCommerce fulfillment service infrastructure to survive in the outdoor equipment and gear eCommerce industry. Cymatic offers a warehouse distribution network with drop gate technology that can help you compete in this saturated market. Healthcare Fulfillment It is critical to have the proper eCommerce fulfillment service when expanding your online store. Without the correct location or team, it isn't easy to fulfill an order on time and manage inventory efficiently. Home and Household Goods Fulfillment Source eCommerce homeowners and brands can now receive high-quality eCommerce fulfillment service support from 3PL fulfillment services, which have highly skilled fulfillment experts. It will save you time and money as you scale your brand, but it will also help optimise your supply chain. F&B Fulfillment Customers rely on eCommerce businesses to get food and beverages delivered more than ever. Consumers expect food and drinks to be fresh and perishable. Food that is provided by an eCommerce business needs to be stored and supplied carefully. Should You Outsource Operations to Third-Party eCommerce Fulfillment Services in 2025? If you're fulfilling orders for your business and see a significant influx, it's time to reach out about scaling. Use fulfillment services to help ship and process these orders quickly. If you are not using technology to optimise operations, your business will grow inefficiently. To do so, be sure to have an eCommerce fulfillment service that provides software that will suit your needs and the company's growth. Here are some questions to help determine if you should outsource your fulfillment requirements to 3PL fulfillment services. Do You Struggle in Determining How to Plan for Storage and Inventory? If the answer to this question is yes, consider outsourcing your inventory and warehouse management to third-party fulfillment services. Do You Spend Too Much Time Fulfilling Orders? If you can fulfill orders on your own, then there is no need to invest in fulfillment services for your business. However, if you are unable to do that, it may be worth looking into an eCommerce fulfillment service for any excess orders. How Do You Check Your Customer's Shipping Preferences? If you want to store products closer to home, take advantage of fulfillment services How Do You Plan to Grow the Business? If your business is projecting enormous growth, it's time to switch to 3PL fulfillment services. Conclusion: Is it Worth Partnering with an eCommerce Fulfillment Company in 2025? There are many advantages and benefits that come with partnering with 3PL fulfillment services. A few of them are listed below: Improved Time Management Saving time on fulfillment through fulfillment companies can help grow your business. Outsourcing it to a more conveniently located company will ensure timely delivery and better rates for shipping. Cost Benefits Upfront costs of in-house fulfillment come with seasonally shifting overhead expenses that require employing a full-time staff team. Outsourcing gives you more flexible, stable prices and better deals on storage and insurance. Improved Technology Outsourcing fulfillment requirements to an eCommerce fulfillment service can help utilise their existing technology and infrastructure, freeing up your time and money for other uses. Integrating your eCommerce platform with that of fulfillment services is a smart option.  Business Growth Outsourcing your fulfillment responsibilities can help you focus on other aspects of the business and provide higher-quality service to customers. Market Reach Choosing an eCommerce fulfillment service can help your business reach global audiences without you having to deal with the logistics. You can focus on what's important for your business, like marketing and sales, knowing that your partner will handle the other tasks. If you are seeking to benefit from all the advantages of partnering with fulfillment services and much more, WareIQ can be of great assistance. Established in 2019, WareIQ, a Y-combinator backed startup, has rapidly grown to be the leading provider of full-stack eCommerce fulfillment services for some of the most reputed brands in India. WareIQ offers a full-stack platform for eCommerce companies to enable same-day delivery and next day delivery to customers – an Amazon Prime-like experience but accessible to everyone. WareIQ has empowered brands to sell more, sell faster & sell everywhere due to: Access to WareIQ’s strong nationwide network of fulfillment centers, micro-fulfillment centers & urban dark stores near their customers Access to all major national & hyperlocal last-mile couriers at discounted rates for making same/next day deliveries possible Easy integration across multiple online platforms & marketplaces enhancing multi-channel selling Horizontal marketplaces: Flipkart, Amazon, etc. Vertical marketplaces: Nykaa, Myntra, etc. D2C platforms: Shopify, Magento marketplace, WooCommerce, etc. Social commerce platforms: Bikayi Access to a superior centralised tech platform for eCommerce operations ML-based prediction engine for efficient warehouse network design & smart inventory placement Centralised platform for core fulfillment & shipping operations Post-shipping apps for a delightful experience & zero to minimum supply chain leakages (Branded tracking page with smart marketing placements; Trigger-based updates & smart communication platform) WareIQ has customised offerings for merchants experiencing different order volumes as well as having different delivery speed expectations. WareIQ is probably one of the very few fulfillment tech companies in the world that have same-day delivery service for their customers under their product “WareIQ RUSH”. With world-class WMS functionalities, WareIQ handles the entire range of intricate operations in the eCommerce fulfillment process, ranging from Inbound Operations such as scanning and quality check, through 100% accurate Pick and Pack, to Inventory Management across all channels. WareIQ’s next-day delivery and same-day delivery services are helping eCommerce businesses set new standards with respect to setting customer expectations and fulfilling them with high efficacy. At the same time, WareIQ customers realize significant cost savings and wider reach due to better negotiations with shipping partners, strategically placed warehouses, economies of scale and scope in eCommerce warehousing, and data-driven decision-making. WareIQ’s WMS, a centralized tech platform helps to better manage undelivered orders by reducing NDR processing time by 12 hours – a multifunctional NDR dashboard helps to track and take immediate action for undelivered orders in real-time, thereby reducing RTO by up to 10%. Automatic replenishment recommendations and easy purchase order creation capabilities on the WareIQ platform further empower eCommerce companies to leverage all possible ways of increasing their ROI. [signup] Fulfillment Services: FAQs

June 23, 2022

WareIQ | Up to Speed | Latest Product Updates & News | Newsletter Issue #1

WareIQ | Up to Speed | Latest Product Updates & News | Newsletter Issue #1

Our team at WareIQ is always in the pursuit of improving our products & services for enabling our community of brands, platforms & sellers to: Enable same/next day deliveries & accelerate online salesSell more through less - deep insights on inventory planningSeamlessly manage returns with the help of a customer-centric support team In this newsletter, we have compiled key updates & prominent functionalities which will allow you to take your business to the next level. Keep reading below to know more! Highlights Use RTO Shield beyond Shopify & get 100% RTO protection Now available on Woocommerce, Magento, etc. along with Shopify! Leveraging our AI-enabled RTO prediction system to identify & flag high-risk customers & thus reduce RTO. Activate Same Day Delivery with 1 click Now available on the app store! Accelerate online sales & enhance customer delight by providing lightning-fast deliveries to your customers through WareIQ Rush. Furthermore, display the 'Same Day Delivery' badge for eligible pin codes & boost conversions. AI-enabled shipping recommendation engine A new way to select your shipping partner! No need to set up a complex list of context specific-rules for shipping partner selection. Let our AI recommendation system take care of automatically choosing the best courier partner for your business context. A hassle-free centralized OMS & WMS experience Save time & effort by using one interface for all the OMS & WMS needs. No need to switch between your OMS & WMS - right from transferring inventory to other warehouses to uploading product details, use WareIQ Merchant Application for everything! Generate Automated Reports using WareIQ Merchant Platform Get daily reports - NDR, Ageing, Unprocessed, COD remittance and many others - directly on your mail & monitor your operations closely. Enhance data security with Users & Roles feature Define the scope of data visibility and accessibility for various personas in your organization and enhance data security for your operations. WareIQ Up to Speed Up to Speed is WareIQ's monthly product newsletter, encompassing all product releases, updates and feature launches. Subscribe to the newsletter to get stay 'up to speed' with the latest happenings and offerings from WareIQ. You can also subscribe to the same on our LinkedIn handle: WareIQ Up to Speed

June 23, 2022

7 Best eCommerce Fulfillment Services to Streamline Fulfillment and Shipping Operations for Enabling Same Day and Next Day Delivery in 2025

7 Best eCommerce Fulfillment Services to Streamline Fulfillment and Shipping Operations for Enabling Same Day and Next Day Delivery in 2025

Have you wondered how eCommerce market leaders achieve exemplary growth and customer satisfaction metrics? As the eCommerce boom continues and customer preferences change rapidly, powered by the plethora of options available to end customers, differentiation in offerings will be the key game-changer for eCommerce businesses. This differentiation can be achieved through the selection of the best eCommerce fulfillment services, more specifically, a reliable partner that offers the most recent trends in fulfillment, such as same-day delivery and next day delivery services. Keep reading to better understand how you can select the best eCommerce fulfillment services for your business and how WareIQ can be the best fulfillment partner in your growth journey. What are Fulfillment Services? Fulfillment services are similar to third party (3PL) logistics service providers that take care of preparing an order and shipping it to the end consumer on behalf of the seller and also provide a multitude of related services such as taking complete responsibility for receiving, managing and completing the order. As customer expectations of same day delivery and next day delivery grow at an ever-increasing and unimaginable pace, eCommerce fulfillment services are fast evolving as the preferred choice for eCommerce businesses across the globe. The best eCommerce fulfillment services enable businesses to reliably, accurately and efficiently fulfill their customer orders while minimising capital expenditure. While fulfillment services vary with regard to their exposure to the value chain, they mostly act as a command center for handling the entire order preparation and dispatch process as well as doubling up as a buffer inventory for holding the clients’ products. [contactus_uth] What Does an eCommerce Fulfillment Provider Do? An eCommerce fulfillment service provider takes up a broad span of responsibilities ranging from receiving stock, storing it in warehouses, order processing, shipping and transportation. The success of any eCommerce business largely depends on setting new expectations for customer experiences and fulfilling them effectively. With the eCommerce boom, customers have started expecting same day delivery and 2 day delivery as a general standard. However, for any eCommerce company, handling so many things single-handedly becomes cumbersome and the team starts losing focus on their core business processes. There is heavy capital investment, manpower hiring and management bandwidth allocation that is involved. Hence, outsourcing these requirements to the best eCommerce fulfillment services has proved to be a simple but very effective way of addressing this issue while riding on the growth engine along with competitors.  An eCommerce fulfillment service’s task begins as soon as an order is placed by the customer and continues till the order reaches the doorstep of the customer or is returned due to some unavoidable reason. The best eCommerce fulfillment services give the seller access to a more dynamic eCommerce warehousing space, help negotiate more favourable terms with shippers, prevent stockouts and provide real-time tracking information of the order consignments. What are the Factors to Consider while Choosing the Best Fulfillment Services for eCommerce? While selecting the best eCommerce fulfillment services, a number of factors should carefully be considered and it can be a big burden for retailers to determine them. The decision depends both on the business objectives and personal preferences of the decision-maker. Broadly, the following factors must be taken into account while selecting the best eCommerce fulfillment services provider: Spectrum of service offerings Scalability Flexibility with respect to same day delivery and next day delivery Cost structure, pricing plans and price transparency Ease of onboarding Efficiency of customer service and reachability eCommerce and startup friendliness Intuitive business intelligence dashboard for real-time monitoring Extent of integration and security Micro eCommerce Fulfillment: The Move to Same Day and Next Day Delivery Same day delivery and next day delivery are rapidly becoming the most preferred delivery models for customers globally. According to some recent survey reports, over 60% of eCommerce shoppers consider delivery speed as a significant factor in their purchase decisions and 80% of shoppers are likely to turn to a competitor brand if they encounter long delivery periods. Let us take a look at the meaning of each: When an item is delivered to a customer within 24 hours of it being ordered, usually on the day on which it was ordered, it is referred to as same day delivery. To accomplish this humongous task, the item must be delivered from the inventory, also called a micro fulfilment center, located as close as possible to the consumption clusters. Next day delivery, on the other hand, means that the customer receives the item at their doorstep on the following day from when it was ordered. It involves bundling multiple orders throughout the day destined for a given region of distribution and making scheduled delivery stops by the shipping partner. However, there are multiple challenges to this micro fulfillment revolution such as heavy capital expenditure on numerous warehousing facilities, investment in robotic product handling, rapid order processing and packing, and lack of transport infrastructure in remote locations. Hence the micro fulfillment model used by eCommerce fulfillment services is fast evolving to provide a more customised experience for eCommerce sellers with same day delivery and next day delivery offerings. 7 Best eCommerce Fulfillment Services Offering Same Day and Next Day Delivery in 2025 We have listed down the 7 best eCommerce fulfillment services that offer same day delivery and next day delivery services, which will boost customer satisfaction, leverage loyalty and increase online sales for eCommerce businesses. WareIQ  Established in 2019, WareIQ, a Y-combinator backed startup, has rapidly grown to be the leading provider of full-stack eCommerce fulfilment tech solutions for some of the most reputed brands in India. WareIQ offers a full-stack platform for eCommerce companies to enable same day delivery and next day delivery to customers – an Amazon Prime-like experience but accessible to everyone.  WareIQ has empowered brands to sell more, sell faster & sell everywhere due to: Access to WareIQ’s strong nationwide network of fulfilment centres & urban darkstores near their customers Access to all major national & hyperlocal last mile couriers at discounted rates for making same/next day deliveries possible Easy integration across multiple online platforms & marketplaces Horizontal marketplaces: Flipkart, Amazon etc. Vertical marketplaces: Nykaa, Myntra etc. D2C platforms: Shopify, Magento 2 , WooCommerce etc. Social commerce platforms: Bikayi Access to a superior centralised tech platform for ecommerce operations ML-based prediction engine for efficient warehouse network design & smart inventory placement Centralised platform for core fulfilment & shipping operations Post-shipping apps for delightful experience & zero to minimum supply chain leakages (Branded tracking page with smart marketing placements; Trigger-based updates & smart communication platform) WareIQ has customised offerings for merchants experiencing different order volumes as well as having different delivery speed expectations. WareIQ is probably one of the very few fulfilment tech companies in the world that have same day delivery offering for their customers under their product “WareIQ RUSH”. With world-class WMS functionalities, WareIQ handles the entire range of intricate operations in the eCommerce fulfillment process, ranging from inbound operations such as scanning and quality checks through 100% accurate pick and pack to inventory management across all channels. WareIQ’s next day delivery and same day delivery services are helping eCommerce businesses set new standards with respect to setting customer expectations and fulfilling them with high efficacy. At the same time, WareIQ customers realise significant cost savings and wider reach due to better negotiations with shipping partners, strategically placed warehouses, economies of scale and scope in warehousing and data-driven decision making. WareIQ’s WMS, a centralised tech platform, is its core offering, with the following functionalities: Shipping Management  Integration to all major national couriers and same-day delivery partners through WareIQ's platform with discounted rates Generation of bulk shipping labels & invoices in a few clicks Offering a branded tracking page and sending auto-alerts to inform customers of their shipment status Reduction in RTO % (Return to Origin) by automating cases of failed delivery attempts (NDRs) by the shipping or delivery partner Preemption of COD frauds through an integrated AI engine flagging risky orders Orders management Tracking of orders across multiple channels Filtering of orders by status Searching for specific orders Quick timeline view of where the order is in the fulfillment process (e.g. when an order is picked, packed, or shipped) Shipping-related information (e.g. weights, dimensions or carrier service)  Quick snapshot of any orders that require action Syncing WareIQ’s out-of-the-box integrations with sales channels to eliminate manual importing of data and triggering all the necessary notifications to the end-customers Inventory management Tracking of inventory levels across multiple locations & sales channels including websites and marketplaces Using WareIQ platform to distribute inventory to multiple locations optimizing for speed & cost/order Setting reminders to proactively replenish inventory, bundle products for promotions, make inventory transfer requests and much more Warehouse management Managing multiple warehouses and offline stores on WareIQ's platform 100% inventory accuracy ​​​with scan-based operations Automated reconciliation tool which helps to keep track of returns and unsettled invoices Integrations with all major ERP & Accounting systems Assured tag on Flipkart without physically dedicating inventory to them The central platform helps to better manage undelivered orders by reducing NDR processing time by 12 hours – a multifunctional NDR dashboard helps to track and take immediate action for undelivered orders in real-time, thereby reducing RTO by up to 10%. Automatic replenishment recommendations and easy purchase order creation capabilities on the WareIQ platform further empower eCommerce companies to leverage all possible ways of increasing their ROI. More than 300 companies such as The Man Company, Future Group, Kama Ayurveda and Wingreens Farms have trusted WareIQ as a reliable partner in their growth journeys. No minimum order quantity requirements make it suitable even for eCommerce firms having low order quantities to take advantage of the latest trends such as same day delivery and next day delivery. The onboarding process is simple, convenient and less time-consuming, while the pricing policy is clear and transparent. WareIQ also undertakes strict safety precautions at its warehouses and complete ownership of operations, thereby minimising the risk exposure of customers. ShipBob Source ShipBob was founded in Chicago in 2014 as a global logistics, technology, and eCommerce fulfillment services company that fulfills orders for D2C brands with next day delivery. With a claimed accuracy rate of 99.95% and serving more than 7000 customers worldwide, ShipBob provides end-to-end solutions for eCommerce fulfillment. It offers 2-day shipping at affordable and transparent prices, along with a robust software platform that allows integrations to the eCommerce providers’ own platform with a developer-friendly API. According to independent customer review reports, ShipBob ranks high with respect to: A broad network of warehouses across distant locations A superb easy-to-use user interface The ease of integration with other platforms However, customers have reported dissatisfaction on the following issues with ShipBob: Difficult to understand pricing plans Not-so-active customer support Non-availability of refrigeration facilities for perishable products Inflexibility for B2B operations Shipbob also provides predictive analytics to eCommerce customers to better handle stock-outs during peak sales periods. ShipMonk Source Also established in 2014, ShipMonk is based out of Florida and serves medium and small-sized eCommerce companies with comprehensive fulfillment solutions including warehousing, smart inventory management, subscription box fulfillment and campaign fulfillment. ShipMonk’s warehouses are located strategically across the USA and it has plans to establish warehouses in Europe, so as to provide more customised fulfillment, including 2-day delivery and next day delivery to D2C eCommerce brands. ShipMonk is equipped with robust and eco-friendly modern technologies such as locus robots, kardex machines, cubiscans and software that integrates easily with 75+ marketplaces and shopping carts. It offers customised packaging solutions and delivery protection schemes for willing eCommerce companies. ShipMonk allows a convenient pricing model that allows customers to pay on a per-unit basis for 1 to 10,000 fulfilled orders per day. It also enables customers to better understand the returns management process with accurate and real-time data and round-the-clock customer support. ShipMonk has a respectable mindshare among its customers with respect to: Heavy discounts and affordable shipping rates Complete paperwork and claims settlement Zero setup fees Zero inventory receiving fees Easy integration with eCommerce platforms Ability to handle international orders and subscription boxes effectively However, Shipmonk’s software is not integrable with eCommerce company websites hosted on Wix. Amazon Source Amazon has been the pioneer in the eCommerce fulfillment space with same day delivery and next day delivery services for Prime members across a long list of cities. To add to customer delight, Amazon has gone to the extent of fulfilling certain eCommerce orders within a few hours of placing the order. Amazon makes it possible through a very carefully placed network of fulfillment centers, comprising of warehouses and phantom godowns, close to the sites of maximum orders, based on their past order data and projections. The same day delivery concept evolved from the 2-day delivery promise that Amazon inherently made to its Prime members. While most eCommerce companies, especially small and medium businesses, admit to having benefited largely from the same day delivery offering of Amazon, the associated costs have been heavy for eCommerce companies having less frequent and uneven rates of orders. Moreover, the same day delivery and next day delivery services of Amazon are available only for registered vendors and sellers of Amazon; external parties selling through other platforms cannot avail of these services, thereby restricting their reach. Deliverr Source Established in 2017 in San Francisco, Deliverr provides superior fulfillment solutions to small eCommerce companies, with a 2-day delivery service. Transparent pricing, badges similar to Amazon Prime or flipkart badges and a hassle-free experience stand at the core of Deliverr's services. eCommerce companies can leverage the live data tracking options of Deliverr to predict their future fulfillment performance and even next day delivery for D2C customers located in close proximity of the warehouses. Deliverr ranks high on the following parameters: Online Customer support Ease of onboarding and integration Transparency in pricing Multi-platform integration for companies The primary disadvantages of Deliverr are: Unavailability of International delivery Telephonic customer support Non-adaptability with subscription boxes Rakuten Super Logistics  Source Originally established as a 3PL company in 2001, Rakuten Super Logistics has established its strong foothold in the eCommerce fulfillment domain since 2013. A nationwide fulfillment network helps eCommerce companies minimise shipping periods, control costs and increase accuracy in eCommerce order fulfillment. RSL has partnered with some of the leading shipping carriers to handle a diverse range of parcel sizes for eCommerce platforms. While currently offering only next day delivery, it plans to introduce same day delivery services in the very near future to compete with Amazon. Rakuten customers have reported a plethora of advantages including: Dedicated customer support managers, available through phone Two-way inventory management and address verification Speciality fulfillment Discounts with bulk orders The main barrier for smaller eCommerce companies in partnering with Rakuten Super Logistics is its minimum order quantity of 250 monthly orders, although the company plans to shred down this limit in future. The other disadvantage is that eCommerce websites hosted on Wix cannot integrate with the API of RSL directly. Also, Rakuten Super Logistics does not offer a live chat feature and 24*7 customer support. FedEx Source FedEx, formerly Federal Express Corporation, was founded in 1971 as an urgent delivery services company. Over the years, Federal Express has grown and evolved as a multinational eCommerce fulfillment provider, serving diverse sectors such as healthcare, transportation, D2C, B2B and B2C eCommerce fulfillment solutions. Having operations across 200+ countries, FedEx has many large multinational conglomerates among its customer base and continues to innovate supply chain solutions to meet changing customer expectations. Moreover, FedEx offers the convenience of shipping pre-ordered consignments without storing them in a warehouse. However, the main disadvantages are that FedEx does not ship oversized and overweight products and it does not integrate with Amazon - an essential requirement from any eCommerce fulfillment service. Conclusion So, by now, you must have gained a fair understanding of the importance of having a strong fulfillment services partner, which is capable of providing same day and next day delivery services, which will boost the ability of your eCommerce company to become more customer-friendly. There is no standard one-size-fits-all approach for selecting the best eCommerce fulfilment services. So, it is best to trust WareIQ, the fulfillment company that provides you with the right flexibility with respect to order size and pricing. WareIQ has been constantly working on incorporating feedback from customers and strengthening the focal points in the fulfillment chain to provide you with a consistent improvement in customer satisfaction. We help you not only to reduce your logistic costs but also your delivery timelines – this could be the game-changer for your business.  [signup] eCommerce Fulfillment Services: FAQs

June 22, 2022

Definition, Importance and 5 Step-By-Step Processes of Stock Reconciliation In 2025

Definition, Importance and 5 Step-By-Step Processes of Stock Reconciliation In 2025

It is sometimes likely that the inventory counts in your records and the actual amount of products on your shelves don't always match. This mismatch, while frequent, can have a significant impact on your organization. To avoid stockouts and guarantee that your consumers get what they need when they need it, you need to know how many goods you have in stock and how much stock you need for the future. You can employ stock reconciliation to determine the stock discrepancy between what's in your records and your warehouse and then make modifications to bring your figures into line. This is a critical step in ensuring that inventory is ordered as needed and that things are readily available for sale. In this blog, we will take a detailed look at the meaning of stock reconciliation, its importance, the processes involved in doing and the challenges faced while doing it. What is Stock Reconciliation? Stock reconciliation refers to matching inventory data to real-world inventory items in is stored in your business’s warehouse or fulfillment center. To do so, prepare a stock reconciliation report that accurately displays your current inventory and includes or disposes of stock items from the database. This is an essential step since it aids in the reduction of stock disparities and helps in understanding why they exist in the first place. Inventory reconciliation should be done regularly to guarantee that all inventory is accounted for. An inventory reconciliation report compares the business's written inventory records to the physical goods in storage.  If this data doesn’t match, the report can assist in determining the cause of the issue. If you cannot find the cause of the difference, you should update the written inventory records to reflect the actual inventory level and the necessary accounting entries that need to be made. [contactus_gynoveda] Importance of Inventory Reconciliation There can be dire consequences for the business when the records do not match the physical inventory. Even with the best inventory management and control technology, inventory shrinkage to some extent is inevitable. There's no denying that human error and blunders are to blame for part of this shrinkage.  The quality of the data recorded and handled in the inventory control system determines the accuracy of the information. Inventory reconciliation allows you to keep track of shrinkage and search for symptoms of greater problems such as dwindling customer demand or employee theft. Performing an inventory reconciliation helps your business to keep inventory organized and is important for the following reasons: It ensures your written records for inventory figures are accurate by aligning these records to those obtained via a physical check. It ensures that all kinds of stock are separately recorded and included in the written records. It helps in tracking your inventory more seamlessly to prevent incidents such as theft and manual errors. It provides a starting point for investigating the differences between inventory-in-hand and inventory purchased from suppliers by identifying the source of these differences through the use of item characteristics. Businesses find it helpful in judging their stock-loss percentage compared to prevalent industry rates. 5 Step-by-Step Processes Involved in Stock Reconciliation  Inventory reconciliation is more complicated than just changing the numbers in your books to reflect the amount of inventory in your warehouse. There are a variety of explanations for the discrepancy in the figures and you must figure out what's going on, which can be done in the following ways: Step 1: Make a Note of Your Actual Inventory Count The number of items a business has on hand is known as physical inventory. The number of actual objects on your shelf is the one definitive thing that cannot be disputed. Businesses should arrange a time for qualified management to do physical inventory counts and double-check their data. Check your physical inventory count before browsing through your records. This may be accomplished by devoting a day or two to calculating the number of items in your inventory. This is crucial since it becomes conceivable whether the inventory was originally miscounted or recorded incorrectly. Furthermore, if you're distributing goods between different sites, the physical inventory count may be lower than the figures in your books. Step 2: Perform a Side-by-Side Comparison of Physical Inventory and Inventory Records Compare your real inventory numbers to existing inventory records once you've recorded them.  You should double-check that these numbers match the physical location of each item on your shelves. You'll find out whether there are any inconsistencies during this procedure.  Several factors might cause a discrepancy between your physical inventory count and your inventory management count, some of which are listed below: Paperwork that has gone missing Human errors Mathematical miscalculations Unlisted items  Scrap items Fraud by suppliers Items that belong to a consumer or a supplier Items that have expired and thrown away You have to look into all options to determine the root of the problem, note what's causing the disparity, and make the necessary changes to your processes and records to prevent the same problem from occurring again. Step 3: Analyse Purchases and Sales of Inventory Since the Previous Reconciliation If you've done a stock reconciliation before, go back and check if any inconsistencies were discovered that might explain the discrepancy in figures during the current reconciliation. Compare your inventory reconciliation findings to previous ones. This can help in identifying trends and patterns, as well as the identification of areas that need more research.  This is especially useful if any difficulties need to be addressed.  Being aware of these problems and issues allows you to concentrate more attentively on those specific items, either averting future difficulties or supporting you in finding the cause of the issue. Step 4: Remove Any Disparities That May Exist It's up to you to decide how much shrinkage is acceptable in your company. It may be more time-consuming and costly to identify the reason for the loss rather than move on if the quantity or value of lost items is low enough to make an exception. If you need to identify the cause of it, start with your systems and personnel. If you're using a contemporary inventory or retail management platform, you may simply update the products in your system to reconcile your records. While this causes an abrupt pause in your inventory statement, it does allow you to build a general ledger that will serve as the formal beginning point for future inventory. Steps in the recording process are frequently overlooked at the warehouse, on the store floor, and while updating it on the inventory management software used by the company. It is a good idea to interview the people who are in charge of each phase to see if there's a reason for the disparity that can be rectified. If you can't figure out what's causing the disparity, consult with your team and identify each metric that could have caused it. Step 5: Repeat the Process of Reconciling Inventory Consistently  The advantages are lost if inventory reconciliation is not performed regularly. Regular stock reconciliation improves data accuracy and lowers inventory costs. Inventory reconciliation is only effective if you verify your stock regularly.  As a result, you'll get more accurate data over time and can reduce inventory loss, saving you money in the long run. Inventory reconciliations should be done regularly and the frequency should be based on what is best for your company. They can be time-consuming, so factor in any delays, sales halts, and labour expenses. Challenges to Stock Reconciliation Can be Time Consuming Inventory reconciliation is time-consuming for every business, and no matter how frequently you count, you'll have to tolerate certain amounts of unforeseen shrinkage due to factors such as damage, expiry, goods lost in transit, and many others. Frequent stock reconciliation can result in delays in delivering orders to customers and purchasing fresh stock that is needed to fulfill those orders. Disruption in Operations The place where you count your stock should be kept separate. This entails having access to a large warehouse or operational space to prevent the suspension of all inbound and outbound product movement is suspended for long periods of time. However, since it is already a struggle for many retailers to find enough storage space to fit in their existing inventory, this can be a challenge, as they often use third-party warehouses which don’t facilitate large sections that can be separated specifically for counting purposes.  Use of Incorrect Weightage Factors The usage of incorrect weightage factors is a widespread issue that causes multiple monetary issues. When dealing internationally, for example, measuring a liquid in litres rather than in gallons or the other way around is often overlooked. This can cause confusion when noting down the dimensions of the product, especially if employees are not well versed in units of measurement and if the company deals in importing or exporting goods to other countries that use different metrics of measurement such as the US and Canada. Difficult to do Without Advanced Software If an order management system isn’t implemented, tracking replacements, refunds, and backorders make stock reconciliation problematic. In today's world, using excel or similar basic spreadsheets introduces unneeded difficulties due to a lack of relevant features that are needed. Even though these solutions have worked quite effectively for a long time, a more comprehensive package is required in the current market. They aren't responsive enough to manage a wide distribution network and other peripheral aspects of the firm. They provide many opportunities for human mistakes and there is no base structure for spreadsheet reconciliation reports. Additionally, if a business stores inventory in multiple warehouses and sell products on different platforms, the only way to manage the movement of inventory accurately is to use inventory management software. Manual Errors and Mismanagement of Inventory Many of the common causes of the disparity between inventory records and physical inventory counts are due to manual errors while entering the data or mismanagement of resources which leads to inventory shrinkage, stockout situations, overstocking, wastage, and much more. These factors have an adverse effect on business operations and are difficult to mitigate unless a major management and staff overhaul is done if the problem occurs frequently because it can be difficult to ensure that every item is being counted and added correctly. Conclusion Managing inventory should be a key priority when a firm starts to grow. Taking the effort to reconcile inventory acts as a quality check for existing stock systems and alerts the management team to any data inconsistencies. Managers may use this information to determine which inventory control systems to adopt to improve functionality and expand their business. The amount of money spent on stock mismanagement is reduced when an effective stock control system is implemented. While every organization's ability to raise selling prices is restricted, focusing on the bottom line is a good strategy. Inventory reconciliation is a valuable tool for reducing losses and streamlining procedures. The key to reducing inventory shrinkage is for all departments to participate in simplifying and optimizing their particular tasks effectively. You'll need to do inventory reconciliations regularly to keep track of your inventory statistics. Inventory checks provide several advantages, including saving money, reducing theft, and ensuring that your consumers get the desired items. If you need assistance with inventory reconciliation, you can check out WareIQ. WareIQ is one of India’s leading eCommerce fulfillment companies that utilize a strong technology infrastructure to provide a range of eCommerce fulfillment solutions, including inventory management and stock reconciliation. We give customers access to our advanced WMS that automatically tracks inventory across multiple fulfillment centers and selling channels, and automates multiple processes of inventory management to increase the speed and cost-effectiveness while reducing errors and issues. Stock Reconciliation: FAQs

June 22, 2022