Ecommerce has brought the world closer in many aspects. As customers, you can purchase from anywhere in the world. And as a business, you get to sell in different parts of the world without physically being there. Selling to customers across wide regions is surely one of the perks of ecommerce. However, this means that the inventory distribution has to take place in different regions.
Inventory distribution is a practice modern ecommerce sellers undertake. This is primarily done to maximize your reach in the country. The point is that today’s market is excessively competitive. We are all living in the Amazonian era where customers find the A to Z of the products they are looking for on the ecommerce store titan.
Therefore, sellers have to adapt to the changing market and customer demands. They have to adopt agile market strategies if they want to sustain themselves in the market. Inventory distribution is one of those popular strategies. It is a sure shot method of maximizing your reach and keeping up your game in the competitive ecommerce landscape.
In case you are wondering what precisely constitutes inventory distribution and how you can get started with it, don’t worry. We’ve got you covered! Read on to find out how to leverage the practice of inventory distribution for your online business.
What is The Idea Behind Inventory Distribution?
Inventory distribution is a practice that is undertaken to maximize your ecommerce reach. In other words, you start storing your inventory in multiple warehouses across the country. But, the question is, when you already have ecommerce helping you reach to the farthest locations, what is the need for spring inventory at multiple locations?
Let’s take you through the backend of how online selling takes place.
- When you create an ecommerce store in a country, people generally assume that you ship to most of its locations. This is where the customer expectation comes into the picture. This is except for a few far reaching locations where transportation and courier services are not available. Generally, people assume that you deliver online to all locations in the country, because every other business does so. Therefore, to stay competitive in the market you have to.
- However, this creates some issues. Let’s say that you have your business located in Delhi’s Chandni Chowk. You have partnered with a wholesaler and everything is going good. Now, since your business is open to a large number of locations, you might be receiving a lot of orders from down south.
- You pick, pack and start dispatching your inventory. For this you also partner with a courier service that helps you ship to the farthest of locations. Two issues arise at this point of time-
- Your shipping costs rise because of the destination address located too far from your business.
- The estimated delivery duration of the product is delayed.
Now let us examine both of these cases in detail.
Shipping Costs Increase
When you’re shipping from one location of the country, and receiving orders from all over the palace, your shipping costs will rise. Because the delivery destinations are too far from your business, you will ultimately pay higher shipping costs to deliver the products to the customer’s doorstep. While you might want to shift the burden of shipping costs to your customers, it is not advisable in most of the cases. And this is because of the customer expectations.
The customer expects you to offer free shipping and have a competitive price, simply because every other business is offering it. If you try to incorporate your shipping costs in the product price, you might not be able to catch your customer’s attention that easily. The best thing you can do is set a minimum threshold order value, beyond which the customer gets free delivery. Alternatively, you can leverage inventory distribution.
Delivery TAT Rises
In another case, the time to deliver the product also rises when your delivery destination is far off. Even though express shipping options are available, it will ultimately raise your business costs. Therefore, you need to ship via standard shipping.
And that will take time depending on how far the location is. This is directly related to customer satisfaction. The idea is that today’s customers expect their products delivered at lightning fast speeds. If you don’t cater to their needs, they’ll switch to other businesses. Because,let’s accept it, Amazon does it all!
How Does Inventory Distribution Create a Difference?
Once you identify two of the biggest problems with shipping from one location, inventory distribution comes into the picture.
Even when you’re competing with Amazon, it doesn’t mean that everything is lost. With inventory distribution, this problem is addressed. When you have your warehouse located at different locations of the country, you can ship faster and cheaper. You don’t need to worry about the distance of the delivery locations. Remember that your business has value of its own. There is something valuable that you provide because of which customers are shopping for you. Keeping that intact with your inventory, the monir hurdles around shipping and costs can be addressed.
With inventory distribution, you are able to deliver successfully and cater to the needs of your customers in a far better manner. This is how-
So, let’s say that you are receiving 100 orders daily from Bangalore and nearby areas. If you are shipping from Delhi, the same issues will arise. But, if you distribute some of your inventory to a warehouse in Bangalore, you will be able to fulfill faster. Placing your inventory in a warehouse would absolutely make sense. This is what inventory distribution helps you accomplish.
You can ship and deliver to your customers in the least amount of time. The best part is that you can do all of this in the least amount of time possible. Now imagine the same for different regions of the country. If you’re getting orders from Mumbai, Kerala, Punjab and other areas regularly, inventory distribution will be your best bet.
Reduced Risks
Inventory distribution helps you reduce risks. When you’re shipping to far off locations, there are a number of factors involved. For example, there is a chance of your package getting damaged in the transit. Or, it might get misplaced over long destinations. Moreover, if the shipping destination is in a rural area, the courier company will take even more time to deliver it. All these pose risk to the growth of your business. With inventory distribution, these can be reduced because you’re shipping from the close location.
Wider Reach
Obviously, when your warehouse is located in an area, you know the surrounding regions better. There might be customers who are looking for better shopping options in those areas. But, they are not able to make a purchase due to limited availability. You can open your business to such people and scale your business. This might even lead to greater profits and a good reputation.
More Product Options
Fragile items are difficult to ship over long distances. Because no after how much you trust the courier company, mishappenings cannot be avoided. Similarly if you are shipping food items, they might get perished. But, imagine shipping from a closer area to the customer. With warehouses nearby your customer’s delivery locations, you can enhance the capability of your business. You can ship products that were earlier not possible.
Lower Shipping Costs
Undoubtedly with inventory distribution in the picture, your shipping costs are reduced. Because your customer’s delivery address is located nearby to your warehouse, the transit distance is less. And therefore, you o longer have to burden yourself or your customer with greater shipping costs. Moreover, you can also offer free shipping, if you haven’t done so until now.
Faster Deliveries
One of the best results of inventory distribution is observed in faster deliveries. Your products are delivered at lightning fast speeds to your customers. In case you haven’t been offering next day delivery, you can open to your business to this possibility.
Greater Customer Satisfaction
When you are able to offer a competitive price with faster delivery options, you obviously increase the customer satisfaction. Your customers find it a good option to make a purchase from you. Remember that a happy customer is worth plenty of marketing efforts.
Conclusion: Getting Started with Inventory Distribution
While inventory distribution has several benefits, it is not possible for a small business to open their warehouses everywhere. Because honestly renting a warehouse involves a lot of costs. You might even need to hire additional staff. Therefore, it is best to opt for a third party warehouse fulfillment providing service. With this you can leverage inventory distribution as well as lower your costs. Make sure you choose a shipping platform like Dash101 that helps you ship at the lowest costs starting Rs 23/500 gms. Open your business to infinite possibilities and maximize your reach to 26000+ locations with Dash101. Remember that logistics makes the most of your business costs. Therefore, it is always wise to choose an encompassing solution that helps you ship with multiple courier partners to minimize risks.
