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Regional Utilisation (RU) is an ecommerce metric defined as the percentage (%) of local and zonal shipments out of your overall shipments. Top marketplaces consider RU as a significant factor in determining the seller account status. For example, Flipkart gold requires RU>20%.
It can be calculated by the illustrated formula:
Note: A higher 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, such as:
Regional utilisation 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 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 RU can tackle the uneven demand-supply dynamics, enable fast fulfilment, cut down shipping costs remarkably, and improve the customer experience.