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Why your 3PL provider must have multiple warehouse locations
Order fulfilment

Why your 3PL provider must have multiple warehouse locations

Versha Kamwal
November 19, 2021
mins read

Outsourcing order fulfilment to a 3PL (third-party logistics) provider directly impacts an ecommerce business's top and bottom line.

According to statistics, 3PL users say the following:

  • 73% of 3PL users say that 3PLs provided new and innovative ways to improve logistics effectiveness.
  • 81% of 3PL users agree that the use of 3PL contributed to improving services to the end customer.
  • 70% of shippers say that a 3PL saved them money.

It’s evident that the role of a 3PL provider has become a key component of defining how successful ecommerce businesses are run. Most importantly, it's a great way to get expertise, resources, and infrastructure while reducing operational costs and streamlining operations.

However, ecommerce success boils down to your choice of a 3PL partner. There's a lot that goes into evaluating the right fulfilment partner for your ecommerce brand, like pricing, infrastructure, technology, and more. But, there’s one thing that often goes underestimated—warehouse locations of the 3PL provider.

In this blog, you'll learn what is multi-warehousing, and why multiple warehouse locations is a must for a 3PL provider.

What is multi-warehousing?

Multi-warehousing is storing your inventory in multiple locations, i.e. across multiple warehouses or fulfilment centres (FCs) across the country. This enables you to reach your customers faster and in the most cost-efficient way.

Eshopbox's network of fulfilment centres in India
Eshopbox's network of fulfilment centres in India

However, the benefits of multi-warehousing are even more impressive than just speedy and cheap shipping. Let's uncover them.

Why your 3PL provider should have multiple fulfilment warehouses in India?

Here are some benefits you can reap if your 3PL provider has multiple fulfilment warehouses in India:

1. Faster order fulfilment and less shipping costs

When you are selling online, your customer base is scattered across the country. This means, your customers exist across multiple zones—North, East, West and South.

Shipping your orders to customers in multiple cities from one location attracts zonal and national level shipping fees. Whereas, if you ship your orders to customers from the fulfilment centre near to your customers, you will attract local or zonal level shipping fees which helps in reducing the shipping cost and time to deliver the order. Thus, you can achieve lightning-fast shipping speed as well as reduce shipping costs significantly by using a 3PL provider like Eshopbox's network of fulfilment centres.

2. Tap into new markets and demographics

Multiple warehouse locations enable you to access opportunities to tap into newer markets and increase your customer base.

Let's take an example, you have stored your inventory in New Delhi, it is highly likely that you have an established customer base in the Northern region. Now, by storing your inventory in a 3PL provider like Eshopbox’s Bangalore FC, you can start expanding your brand reach and run marketing campaigns in the southern region. This will help you target potential customers who are based in different regions of the country.

3. Efficient inventory management

Inventory management is one of the most challenging aspects of order fulfilment for new entrants and major ecommerce brands alike. Apart from other reasons, multiple warehouse locations enable you to split your inventory in a strategic way.

Let's take an example, you have a clothing brand. By analysing your historical data, you find out that your swimwear has far more sell-through rate in Goa as compared to other cities in India. In this case, having all your swimwear inventory in one warehouse located in Haryana isn't a smart choice. You can store more of your swimwear inventory in an FC near Goa, let's say Mumbai FC and other coastal regions.

With a tech-enabled 3PL provider like Eshopbox, it's possible to plan your ideal inventory distribution with an actionable dashboard and data-driven analytics.

Ideal inventory distribution based on customer demand
Ideal inventory distribution based on customer demand

4. Improved returns processing

Returns can be minimised but cannot be avoided completely in the ecommerce landscape. This means, you must be ready with a plan for returns management as you need to optimise reverse logistics, i.e. return shipping. This way, you can reap the benefits of fast and less shipping costs even when your products are returned. You can ensure quick quality checks and process the refund or exchange in order to keep your customers happy. With a 3PL provider like Eshopbox's network of fulfilment centres, you can make sure that the returned products are shipped back to the nearest fulfilment centre, to pace up the entire returns management.

5. Win Amazon buy box and become Amazon premium seller

The Amazon buy box is the white box that appears on the right side on the product page, where customers can add products to their shopping cart.

As a matter of fact, all Amazon sellers are not eligible to win the Buy Box, only the businesses with exceptional seller metrics stand a chance to win the Buy Box. One of the potential metrics to win a buy box is next day delivery, that can be achieved by storing your inventory across multiple fulfilment centres and achieving fast shipping capabilities. Eshopbox has an order accuracy of 99.75% that can help you win the Buy Box easily.

Amazon Buy Box
Amazon Buy Box

Furthermore, to become an Amazon premium seller, there are seven inspection criteria that a seller needs to meet. By storing the inventory in Eshopbox's multiple fulfilment centres, you can ace two of them—regional in-stock % and prime listing customer views %.

Let’s see how it works,

  • Amazon evaluates that you fulfil more orders as local and zonal to offer speedy delivery of orders to their customers via the same-day or next-day delivery. For this, Amazon compares customers' views on your Buy Box (BB) product listings in which you have stored inventory in the same customer location and the total number of customer views on your BB listings. You can split your inventory based on the zones with maximum demand and your best selling products to achieve same-day or next-day delivery.
  • Amazon expects maximum views on prime listings. For that, Amazon considers the number of customers' views on your products with a prime badge as a percentage of total customer views on your products. You can achieve fast shipping speeds to increase your prime listing by leveraging multiple fulfilment centres and improve your prime listing views.

6. Earn Gold status on Flipkart with Regional Utilisation (RU)

Regional Utilisation(RU) is a percentage of local and zonal shipments out of your overall shipments. To become a Gold seller on Flipkart, your RU % must be 20% or above. Using multiple fulfilment centres of a 3PL provider like Eshopbox to store your inventory will increase your RU score and help you qualify for becoming a Flipkart gold seller.

Flipkart's Regional Utilisation (RU)
Flipkart's Regional Utilisation (RU)

7. High product visibility and increase in sales

When an online shopper searches for a product, the marketplace displays the product results by sorting them by 'highest to lowest' ranking. This ranking algorithm decides the position in which your product will appear. One of the crucial parameters for product ranking is the speed of order delivery based on the customer location. So, when you distribute your inventory in your 3PL provider like Eshopbox's multiple FCs, you increase your product visibility and boost your sales.

8. Ship high volume of orders

When you're starting out, you must be receiving a limited order volume per day. This implies that one warehouse is sufficient to serve your purpose. However, if your daily order volume is constantly increasing or you are ready to expand your online business, a 3PL provider like Eshopbox with multiple fulfilment locations can help you grow. Fulfiling orders from one warehouse can cost you more than the cost of an additional warehouse. At this point, it would be sensible to distribute your inventory across multiple fulfilment centres in India to fulfil high order volume.

9. Minimise risk in case of emergencies

In case of natural calamities like earthquakes, fire, or floods, storing your inventory in Eshopbox's multiple warehouses can allow you to minimise damage and losses. For instance, you have stored your inventory in 4 of your 3PL provider's fulfilment centres located in New Delhi, Tamil Nadu, Gujarat, and Assam. Unfortunately, Assam FC is affected by a cyclone. This means, your inventory in Assam FC is compromised, but your inventory in other fulfilment centres is still safe.

Bottom line

Multi-warehousing is one of the best ways to stay competitive in the ecommerce space. A tech-enabled 3PL provider like Eshopbox, not only will enable you to store your inventory in multiple fulfilment centres across India, but also help you plan strategic inventory allocation and inventory splitting. By gaining strategic geographic footprint, you can achieve faster delivery times, lower shipping costs, and a plethora of benefits to improve customer experience—leading to customer loyalty. Thus, a multi-warehouse strategy can quickly become the most powerful tool in your ecommerce brand's arsenal.

Connect with our fulfilment expert today.

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