The Internet is the future marketplace, as online retail in India is growing at an exponential pace. It is estimated that online retail will be an $18-billion industry in India in 2018 and e-commerce logistics will be a $2-billion industry in 2019. The logistic number is expected to grow even more as the online retail marketplace is expected to be at $220 billion by 2030. Â
New players are expected to enter the online retail market as it has place for everyone be it the boutique owners, small retail players, artisans, craftsmen etc who are talented, have unique collection and want to reach all across the nation. Many of these might come from non metro cities. Thanks to technology which brought Saas ecommerce platform, which makes this dream of many retailers of selling online, easy and affordable. But with the online shop, the owner must be well introduced with other aspects of the online store and one of them is managing eCommerce logistics. Now managing it from small cities has become possible and convenient with new entries.Â
â€œWe are focusing on the difficult sectors of India- the interiors. Covering the metropolitans is not a challenge. It has already been taken care of. Reaching out to the remote areas is a task and we are planning to emphasize on these pocketsâ€, says Sanjiv Kathuria, Dotzotâ€™s CEO in an interview on iamWire
The chart above clearly depicts that monthly ecommerce purchases in non metro reaches up to 50,000 units. Tier-II and III cities and towns are expected to contribute to more than 350 million e-tailing shipments in 2018, according to a white paper put out by advisory services firm Alvarez & Marsal in December. And when the demand is high in these cities, the supply end has more scope to sell locally as much as possible, within budget and reach. Hence small cities are the new big market for all. Tier II and III cities are the new drivers of growth for online retail be it the sellerâ€™s perspective or buyerâ€™s
Logistics as backbone of your online shop
As soon as a customer buys a product in the online retail store, it kickstarts the delivery process. The seller is notified of the request and from there the scene shifts to the Fulfillment Center, where the product is scanned and sorted as per the shipment address. After that, the product is shipped. The delivery process is not an easy process, as it needs pre and post preparations from packaging to tracking.
One of the biggest reasons of dissatisfaction of online shoppers is the failure of product delivery on time or in a good condition. Hence, apart from owning a great web responsive store and quality products, it is equally important to own or to partner with a good logistic service provider. Logistics is the backbone of the online retail industry as it can establish or negate your brand in numerous ways. Retailers need to plan their shipping and logistics plan in a strategic and thorough manner taking into account various factors, such as costs, delivery timelines and the estimated costs of servicing far-flung regions, so that the customers do not end up unsatisfied. Thus, manage your logistics wisely.
â€œBiggest problem for a startup (online seller) arises in the first 3 months when the business volume is not much and most shipping companies expect minimum guaranteed volume. Other challenges include pin code coverages, especially for COD orders and updating and managing shippable locations as shipping companies keep on updating zip code coverages on daily basis. We at Purple Stores help in solving these issues along with the selection and getting competing quotes from different companiesâ€, says Amit Jain, Founder, Purple Stores
Key Consideration for all your logistic Plans
1. Pack it Well
A online seller from metro has generally a preference over sellers from non metro city, but the products the latter sell could be unique and might possess a much more better quality. And thus it is important for a non metro seller to not only deliver good but deliver quality packing and a great experience to the customer. To make your name a brand, it is highly advisable that the receiver of your order must not only be satisfied with the product but also must enjoy the â€œunboxingâ€ process. It should be easy, fun, tamper proof and waterproof. Â Do not forget that you are not just shipping a product, but building future customers by providing a great experience. Availability of best packaging companies could be a problem for Tier II and III sellers, but with proper groundwork, this issue can easily be resolved.
In some cases, the packaging material may also be not available in non-metro cities, then it can be sourced from different channels.
Image Source: Packend
As there are number of sellers like packaging connections, SMMart packaging, dynacorp, airbubble etc. who provide quality packaging material and assistance online. For an instance, a corrugated box costs around in between Rs. 20 to 120, depending on the dimensions and a bubble wrap costs around Rs. 600 to Rs. 2000 depending upon the length.
The most preferred mode is cardboard boxes with reusable air bags. These airbags not only protect the product but also provide cushioning effect, as well.
Also, the product can have marketable packaging, which provides some free publicity for the brand, like Flipkart and Myntra.
Image Source: Dynacorp
Thus, a courier packaged with the brand name and logo seems much more credible than just a brown paper. Donâ€™t miss on this opportunity of re-emphasizing on your brand name.
If your shipment is of high value, say a jewellery item or set of mobile phones, it is advisable to not disclose the brand name or the logo or even initials on the package, to avoid unwanted attention. Better to put your marketing package inside another box, to ensure that parcel details are hidden until it reaches the recipient. This will allow you to enjoy the marketing benefits, but at the same time it will also avoid highlighting the packageâ€™s possible contents.
2. Identifying and Choosing Shipping partner in your space
(a) If you are in certain specific categories, find out the shipping services who deal with those categories, like shipping of jewelry, antiques, glass pieces, furnitures etc. in and from Non metro cities.
(b) Grade them as per the accessibility and reach, taking into consideration their expertise and potential in following:
- E-fulfillment centers: The merchandise to be sold is stocked in these centers.
- Parcel Hubs: Sortation hubs, based on the parcels destinations.
- Parcel delivery centers: sorted parcels arrive to these centers and are then sent out to the customer
- Return Processing Centers: To manage the parcels returned by the end customers.
- Integrated Technology: To ensure faultless delivery of the right items to each customer, and that shipping costs and time frames communicated to the customer are accurate. In India, especially in non metro cities, “Cash on Delivery” is the biggest model of payment, so the online shop owners also need to look if these logistics partner provide this option or not.
(c) Calculate the costs associated
As most of the shipping and logistics companies charge on the dimensions of the packaged product and its weight, so it is prudent to keep it light and small. The adage “Less is More” is the buzzword. This is the courier mantra for all; be it a metro seller or a non metro seller. After all who doesnâ€™t like a little bit more of profits.
The overall cost of shipping a product from the centralized warehouse to its preferred delivery destination depends on the following:
- Dimensions of the package
- Weight of the package, which includes the packaging material
- Origin Location
- Destination Location
- Option of Tracking the package in real time
- Option of Insurance
- Expedited or Standard Shipping
When the courier is COD, the price automatically rises to some percent. It is imperative to note that the shipping costs should not eat into the profit margin of the online retailer. Hence, online retailers need to tie-up with such a logistics company that ships their products in an affordable manner. Companies like Zepo, Shiprocket, Bluedart, Ecom xpress, Amarex and Delhivery are readily available to tier II and III cities. Also, do not forget to negotiate for bulk deliveries.
Determine average shipping cost for each product, at first this would sound tedious job but you have to do it any how when actually shipping your products. Hence, it is a one time effort. To get a estimated shipping cost, you can use tools like FedExâ€™s get rates tool.
Image Source: Fedex
It is only after a thorough analysis that the online store ties-up with their chosen logistics partner.
But, there is not one service provider that satisfactorily covers the entire country and all categories. Therefore, the merchant ends up signing multiple shipping companies. Now each company has a different rate for different zones. With Purple Stores shipping module the system automatically picks up the shipping provider that offers the best rate for that zone.
3. Shipping Insurance
Insurance offers not only peace of mind to the online retailer but also provides security. It is a small but effective way of ensuring that all your packages are handled correctly. In the unfortunate case of a missing or lost product, insurance companies step in to absorb the cost.
There are numerous shipping and logistics providers, who insist on insurance for all the packages. It is an integral part of their service and hence they have already included the insurance costs into the overall delivery costs.Â
The insurance covers all the goods, which are misplaced or damaged due to some external factors, such as theft, accidents or natural disasters.
Experts recommends insurance for products such as Laptop, mobile, Jewellery etc. Multiple ecommerce giants spend quite good amount in purchasing insurances on all ticket items, so that even in rarest case if the package gets misplaced or damaged, they will be recovered. Â
Most couriers do not cover more than Rs. 5000 of loss due to damage or loss of shipment; you may have to take a separate transit insurance policy. Reputed companies like bluedart offer shipping with insurance for Jewelry. Companies like Yakit, allows you to safely courier international packages as well. They provide free insurance.
4. Handling Reverse Logistics
Just as the way, shipping the ordered products on time is important, getting back the unwanted or damaged products from your customers is essential. Moreover, the friendliness of your return policy is a deciding factor for buyer to make purchases. As per ventureburn, â€œEighty-nine percent of online buyers say return policies influence their decision to shop with an e-retailerâ€.
While framing return policies, merchants must address the immediate contact person, the cost associated, the party liable to pay the cost, when, where and how the goods can be returned. The more detailed and clear policies you have, the more likely customer is to purchase from your online store. Players like RLC, provide one stop solution for all reverse logistics needs.
5. Package Labeling Process: Manual or Automatic
Package labeling is an aspect of delivery and logistics that is often ignored. At the start of the business, most online retailers prefer to do the labeling in a manual way, in order to reduce costs. However, as the business grows, it is imperative to invest in an automatic process, so as to save on time. There are numerous automatic labeling entities out there, and Maharishi Labels and Sato India are age-old players in this market.
To handle the reverse logistics, include an easy to use instruction guide, return form and courier labels.
6. Online Tracking
The work doesn’t end when a product is shipped. Instead, a whole new arena of tracking and integration begins:
Any logistics company must be able to:
- Track the shipment in a real-time mode
- The order status and documentation should be available
- The online documentation and the invoice should be dispatched
- In case the retailer has an ERP system then the logistics module should have a seamless integration with it, as well
- Depending on the location of the product, online alerts should be sent to the customer
- System reports pertaining to delivery history, order status and analysis ought to be readily available
Logistics is a big part of any online retailing entity. It needs to be handled in just the right way, so that the online retailer can provide services to his customers in a seamless manner. It is a big tangram puzzle, which needs time and thought before any online retailer can hit upon the best possible logistics solution for their business.
Purple Stores assist its clients in every stage managing an online store from setting up to delivery process. The company provide a builtin logistics panel where the shipping label and manifest can be printed. For their high volume users, they offer automated shipment tracking and status update.
To know more about Purplestoresâ€™ services and scope, Click here