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Order fulfilment

7 actionable steps to reduce ecommerce fulfilment costs in India

Versha Kamwal
March 9, 2022
7
mins read

Ecommerce businesses that are focused on hitting growth goals in 2022 need to keep up with customer expectations. According to research, 95% of consumers prefer free-one-day delivery as their ideal delivery method. However, 24.7% of merchants say delivery costs are the most significant challenge.

The above studies indicate that it is essential to adapt your fulfilment strategy to the changing customer needs. But ecommerce brands face a sad reality—rising fulfilment costs are still a significant barrier to growth and success.

This calls for a strategy that is focused on reducing ecommerce fulfilment costs from the get-go!

In this blog, you'll learn what is ecommerce fulfilment and the strategic ways that ecommerce brands can implement to minimise ecommerce fulfilment costs.

What is ecommerce fulfilment?

Ecommerce fulfilment (also known as order fulfilment) is the complete process of receiving an online order and delivering it to customers. It includes storing inventory, picking and packing products, shipping orders to customers' doorsteps, and managing returns.

The ecommerce fulfilment process is one of the most critical functions of an ecommerce business as its efficiency significantly impacts the customer experience and the success of the online business.

Now, let's see how online businesses can reduce ecommerce fulfilment costs.

How can ecommerce brands reduce ecommerce fulfilment costs?

1. Automate inventory and order management

Investing in an inventory management system (IMS) and order management system (OMS) is a one-time investment that can get you huge profits in the future. Nowadays, ecommerce brands sell on multiple sales channels, such as Amazon, Myntra and more— having centralised inventory management and order management can save you loads of time and ensure efficiency. For instance, automatically updating inventory on all channels can save you from overselling.

The system can also help you with intelligent inventory forecasting to plan inventory replenishment. As a result, you can save on lots of confusion, wastage of effort and time that can help you to save ecommerce fulfilment cost in the long run.

2. Use a powerful distributed network of fulfilment centres

In today's digital space, 1 out of 3 shoppers will choose one ecommerce brand over the other due to better shipping options. This means ecommerce brands have a lot of pressure of offering fast and free shipping.

For that, you need multiple warehouses across all zones across India that can enable you to split your inventory. This will help you reduce transit times and ensure speedy order delivery. This will help you save significantly on the shipping cost and speed up order fulfilment.

Moreover, you need a warehouse management system (WMS) that can help you manage multiple warehouses, organise your inventory and orders, provide real-time data, and give you accurate reports.

3. Negotiate shipping rates

If you're not diligent, shipping costs can shoot up exponentially. To keep shipping costs low, you need to get shipping quotes from multiple courier companies. You can then compare their quotes and choose the best ecommerce shipping service at a reasonable price.

This means the shipping cost depends on where the shipment is going, how much it weighs, and how fast you want to deliver your online orders. As a solution, you can opt for flat-rate services in which courier companies charge a standard fee for any package—whether small or big.

4. Find the most suitable packing materials and supplies

When you fulfil your orders, you require packaging materials and supplies. These include bubble wrap, packing peanuts, air pillows, other cushioning products, and more.

To procure packaging supplies, you have to vet multiple vendors, compare their offerings and negotiate the rates. You also need to reorder packaging material and supplies when they are depleting without disrupting your ecommerce fulfilment operations.

5. Optimise returns management

Just like forward shipping, the cost of return shipping depends on the package weight, dimensions, and distance of return shipping. This means you can most likely afford to absorb the cost of free returns if your products are lightweight and your customers are located nearby. However, reverse shipping will cost you more if your products are heavier and your customers are located far away.

So, you need to consider the costs of returns based on individual items to create a shipping and returns policy that doesn't drain you financially. Although, you can still manage your returns in the right way that ensures profitability. You can plan quick restocking of the returned product in the available inventory to recapture your revenue. You can start by aligning the pickup with an upcoming scheduled delivery in the same or nearby location. This will help you save on return shipping. You can then restock it for re-selling after quality checks and refurbishment. Thus, ensuring efficient returns management can help you curb the losses that come with ecommerce returns.

6. Train your manpower

You should conduct regular training sessions for your manpower so that you can update them about any new incorporations in the fulfilment operations. More training will help you improve efficiency in the entire fulfilment process and enable you to reduce errors and wastage of efforts and costs related to them. You can also follow a Standard Operating Procedure (SOP) to streamline order processing and optimise shipping.

7. Outsource your order fulfilment

As an ecommerce brand, you have to juggle between endless business functions while finding ways to save money wherever possible. You can outsource your ecommerce fulfilment operations to a 3PL provider like Eshopbox that can help you scale up while saving costs.

The pay-as-you-go pricing offered by Eshopbox ensures seamless ecommerce order fulfilment without draining your financial resources. This usage-based pricing ensures that you won't pay for a service you're not using. Furthermore, Eshopbox's pricing is transparent without any hidden cost—every applicable fee is stated clearly.

With Eshopbox, you get access to robust technology and an all-in-one dashboard to automate the entire order fulfilment, including inventory management and order management. To reduce ecommerce fulfilment costs, you can store your inventory in Eshopbox's distributed network of fulfilment centres. Eshopbox also allows you to take advantage of its negotiated shipping rates with courier companies and bulk delivery discounts.

When it comes to packaging, Eshopbox operates at higher order volumes, making procurement of packaging supplies economical through bulk buying, thus making the rates more affordable. Eshopbox also enables you to handle returns efficiently to recapture revenue and make returned products re-sellable. The manpower at Eshopbox's facilities is highly trained and skilled that follows Standard Operating Procedures (SOPs) to carry out order fulfilment in the most optimum way.

Wrapping up

An ecommerce fulfilment process can determine the success of your ecommerce brand. The degree to which you reduce expenses is one of the most crucial factors that determine your profitability and the success of your ecommerce brand. Ecommerce fulfilment costs will increase exponentially if they are not closely monitored and controlled. Thus, it's imperative to opt for the best ecommerce fulfilment solution that helps you keep your costs low while ensuring seamless fulfilment that delights your customers.

Connect with our fulfilment expert today.

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