Why You Must Adopt Inventory Distribution For The Growth Of Your eCommerce Store
All eCommerce business owners’ primary focus is to widen their customer and serve the country’s maximum number of regions. A smart approach towards doing business is the only way to achieve that. One of the smartest ways to ensure maximum reach is distributing your inventory.
To stay ahead of the competition, inventory distribution is an absolute necessity. Let us tell you what inventory distribution means-
Inventory Distribution
Industry professionals continue talking about keeping your inventory close to your customers for fast delivery. They mean you must distribute your inventory!
Inventory distribution is where a business’s inventory is divided into multiple shipments and sent to fulfillment centers or warehouses of a 3PL across various country locations.
Inventory distribution allows eCommerce sellers to reach customers located at every nook and corner of the country. Let us take a practical example to understand this better-
Ajay runs an eCommerce store based out of Bangalore and fulfills orders from a warehouse located near him. But he has customers located all across the country. One day, he receives an order from Delhi. Since his warehouse is based out of Bangalore, it took the parcel eight days to reach the destination (Bangalore to Delhi). His customer was unhappy with the delivery time, and he may never purchase from Ajay again.
If he had distributed his inventory and stocked some of his merchandise in a warehouse near Delhi, it would have taken 1–2 days for the item to be delivered to the customer. He could have retained that customer if he had performed inventory distribution.
This is precisely how vital inventory distribution is!
Inventory distribution used a hub and spoke model. The warehouses work independently from where customer orders are fulfilled from the nearest location. Whenever there is an increase in consumer demand, the seller has multiple warehouses or fulfillment centers where he can fulfill the orders.
Here are a few reasons why you must adopt distributing inventory for your eCommerce store-
Lower Shipping Costs
It’s simple to understand that inventory distribution will reduce your overall shipping costs. The lesser the distance traveled by a package, the lower will be the shipping costs.
When you opt to ship from a single warehouse, it will take a long time for the products to reach your customer than distribute your inventory across multiple fulfillment centers in the country.
Storing inventory closer to your customer will lower the shipping costs because orders will travel a shorter distance.
Remember that it is always cheaper to ship an order 30 km away than 300 km.
Faster Delivery
Nowadays, with customers expecting their orders to be delivered in a day or two, it has become more critical to ensure fast delivery. Choosing to distribute your inventory will take you closer to your customers, reducing the time taken to deliver the orders.
Spread Risk In Case Of Emergencies
Inventory distribution helps you spread the risk in case of emergencies and lets you have backup options if your orders cannot leave anyone particular warehouse or fulfillment center. These situations arise mostly in cases of adverse weather conditions in a specific area or natural disasters. When you split your inventory across geographic regions, you will have backup inventory in other locations. Whether to prevent delays or lost stock, it can be better to be safe than sorry.
To be successful in the competitive eCommerce space, many online brands send their inventory to multiple warehouses. An excellent outsourced order fulfillment provider can help you determine your business’s optimal fulfillment center locations based on your customers’ addresses.
If you’re wondering which 3PL to go for that provides multiple fulfillment centers, Shiprocket Fulfillment is the answer!
