Key Performance Indicators (KPIs) are the metrics used to measure the performance of a business. Similarly, ecommerce metrics are the KPIs that can help online businesses evaluate their performance, set benchmarks, and take corrective measures to steer the business in the right direction.
In this ecommerce metric refresher, you will learn what is Regional Utilisation (RU) in Fipkart, how to calculate Regional Utilisation (RU) for Flipkart, why should businesses calculate Regional Utilisation (RU), benefits of improving Regional Utilisation (RU), and the strategies to improve Regional Utilisation (RU).
Regional Utilisation (RU) is an ecommerce metric defined as the percentage (%) of local and zonal shipments out of your overall shipments. Top marketplaces consider Regional utilisation (RU) as a significant factor in determining the Flipkart seller account status. For example, Flipkart gold requires RU>20%.
The following illustration shows the Regional Utilisation (RU) formula:
Let's see how to calculate Regional Utilisation (RU) with an example,
Note: A higher regional utilisation (RU) % indicates that you are selling more zonal and local orders out of your overall orders or generating more demand locally.
There are many reasons for businesses to calculate regional utilisation (RU), such as:
Regional utilisation (RU) is the key to achieving lightning fast fulfilment and improving the status of your seller account on sales channels. To improve your regional utilisation, you need to split your inventory across multiple fulfilment centres and store your products closer to your customers. This will help you fulfil more local and zonal orders. Make sure you analyse your product demand in different locations before deciding where to split and store your inventory.
If you have a network of storage facilities, you can split your inventory in-house or you can leverage a tech-enabled 3PL like Eshopbox to get access to strategically located fulfilment centres across India.
Regional utilization (RU) has become the industry metric of efficiency for ecommerce businesses. Wherein shipping orders from the same region can significantly improve the bottom line for the marketplace. An improvement in regional utilisation (RU) can tackle the uneven demand-supply dynamics, enable fast fulfilment, cut down shipping costs remarkably, and improve the customer experience.