Your E-commerce business is growing rapidly, and you’ve started to run out of space to keep the stock intact. Or, your current setup isn’t helping in terms of location and is hindering your team’s efficiency, and you are on an explicit hunt for better storage solutions.
Whatever the reason, if you are seriously searching for a suitable warehouse storage facility for your business and are already foraging options—you’ll need to consider many factors before making the final decision. And the crucial factor that’ll come into play would be accounting and measuring the total cost that’d go into renting a warehouse and comparing alternate options to see what would work best for your business.
This article will help you weigh through the warehousing costs and calculations in-depth and the alternative solutions associated with it—to help you make the right decision. Keep following:
Components of Warehouse Cost
It is no secret that landowners and brokers often make renting a warehouse complex by using complex jargon instead of plain English to communicate their pricing options. But in reality, warehouse cost is based on three main criteria – the floor area (square footage), base rental rate, and estimated operating cost.
The Floor Area
The floor area depends on how much space you need for your business and is usually measured in square footage. The area you use for inventory impacts the cost of renting a warehouse.
Note: You can further cut down costs on warehousing by optimizing and making the best use of the available vertical space—reducing total rental costs, big time.
The base rental rate is the amount you’ll pay the landlord, excluding additional operating costs. A base rate is usually charged per square foot on a monthly, quarterly, or yearly basis—as per your lease agreement.
There are two types of operating costs you’ll need to consider before renting a warehouse – Triple Net Lease, also known as Net Net Net (NNN), and Common Area Maintenance (CAM) fees.
1. Triple Net Lease (NNN)
Net Net Net, also known as a triple net lease, refers to the property taxes and insurance fees that you, as a lessee, are supposed to pay besides the base rent—since you are responsible for all the operations happening at the rented property.
2. Common Area Maintenance
Common Area Maintenance (CAM) is the maintenance costs passed down from the landlord to the lessee. Maintenance fees include everything—from management to maintenance of the commercial property.
How is Warehouse Rent Calculated
Did you know in the financial year 2022, the average warehousing rent was 258 Indian rupees per square meter per month in Pune, which was ranked the most expensive among all major cities in India? We’re breaking down the calculations below into three different rental options: monthly rate, quarterly rate, and annual rate–to help you better estimate the warehousing costs specific to your brand:
Monthly Rental Rate
Let’s say your business gets billed every month for warehousing and assume the following:
The storage space you use for warehousing = 1000 sq ft
The base rate = Rs 50 per sq ft per month
NNN = Rs 20 per sq ft per month
Adding up the base rate and NNN (Rs 50+Rs20), you’ll see that your total asking lease becomes Rs 70 per sq ft per month. Just multiply this amount by the square footage of storage, i.e., Rs 1000 X Rs 70= Rs 70,000.
This means you would become liable to pay Rs 70,000 as rent every month at the chosen warehousing space.
Quarterly Rental Rate
Let’s assume the following for quarterly rental rates:
Storage space you use for warehousing: 1000 sq ft
Base rate: Rs 100 per sq ft per quarter
NNN: Rs 50 per sq ft per quarter
Adding up the base rate and NNN(Rs100+Rs50), you’ll see that your total asking lease becomes Rs 150 per sq ft per quarter. Just multiply this amount by the square footage of storage, i.e., Rs 1000 X Rs 150= Rs 1,50,000.
In this case, you would become liable to pay Rs 1,50,000 as rent every quarter or Rs 1,50,000/12 = 12,500 per month.
Annual rental rate
Let’s say you choose the option of yearly billing for warehousing and assume the following:
Storage space you use for warehousing: 1000 sq ft
base rate: Rs 200 per sq ft per year
NNN: Rs 100 per sq ft per year
Adding up the base rate and NNN(Rs 200+Rs100), you’ll see that your total asking lease becomes Rs 300 per sq ft per year. Just multiply this amount with the square footage of storage, i.e., Rs 1000 X Rs 300= Rs 3,00,000.
This means you would become liable to pay Rs 3,00,000 as rent every year for the chosen warehousing space.
Generally, annual billing gives you the most beneficial rate structure, and you’d definitely want to consider this before choosing a warehouse.
Apart from this, make sure to ask your landlord about the additional expenses you might incur, such as electricity, HVAC maintenance, and other operational & repair expenses.
Is Renting a Warehouse Your Only Option?
The simple answer is ‘No.’ Renting a warehousing space is not the only option. While buying your own warehouse can seem very alluring, it’s certainly not possible for most E-commerce brands to make this big of an investment.
You’ll not just become responsible for the maintenance and upkeep of the warehouse but will also be trapped to pay off huge amounts of down payments.
Alternatively, many businesses work with trusted third-party logistics (3PL) providers if renting or owning a warehouse becomes out of the question. 3PL does all the heavy lifting on your behalf by taking care of all your storage and warehousing needs while being cost-effective.
Partnering with third-party logistics providers gives you the flexibility to focus on more important things and take care of all your logistics requirements end-to-end.
If you are looking for warehousing and logistics solutions for your E-commerce business, work with the best in the business. We at ANS Commerce provide fully equipped warehouse facilities across India with cutting-edge warehouse management systems (WMS) and order fulfillment capabilities – pick, pack, dispatch, and return management.
In the world of E-commerce, shipping labels might not be the most glamorous topic to discuss, but they are an essential component of any online business. Despite this, many E-commerce owners tend to overlook the importance of shipping labels, which can cause significant issues for both themselves and their customers.
Creating and managing shipping labels play a critical role in ensuring that packages are delivered accurately and on time. Without proper shipping labels, packages can easily get lost, delayed, or delivered to the wrong address, leading to unhappy customers and additional costs for business owners.
In this beginner’s guide to creating shipping labels, we’ll explore the importance of shipping labels, their components, and the best practices to follow. Read along!
What is a Shipping Label?
A shipping label is a piece of documentation that carries key information about a package, such as a recipient’s information, sender’s information, tracking number, etc. It serves as a way for the carriers to identify and route the package to its intended destination. A shipping label is also sometimes referred to as a package label.
How does the shipping label work?
Every organisation uses a specific template for its shipping labels. After printing the shipping label, it is affixed to the outside of the package. These labels are scanned at the source, destination, and intermediate facilities, thus offering real-time tracking information of the package’s location and delivery status. Also, each label is unique, and one cannot reuse them.
Components of shipping label explained
A shipping label includes a variety of critical components that provide valuable information about the package. Let’s take a closer look at all these key components and why they are important.
The name and full address of the person or business who sends the package. This information helps the carriers to reach out to someone in case of any issues with the shipment or delivery.
The name and full address of the person who will receive the package. This information ensures that the carriers deliver the package to the right person.
The weight of the product in kilograms or grams. It helps the carriers determine how to handle the package at each stage of the shipping process. For instance, if a package is very heavy, it may require special handling or equipment to load and unload it from the truck or airplane.
Special handling information
This includes instructions such as “fragile” or “handle with care.” This is to ensure that the package is treated appropriately during transit and there is no damage to the product.
Routing and tracking number
These unique identifiers help in tracking the package throughout the shipping process, right from the point of origin to the final destination.
This is applicable only if the package is being shipped internationally. It may include the contents of the package, the value of the contents, and any other necessary customs documentation. This information ensures that the package clears customs quickly and easily.
Here is an example of a shipping label –
Different types of shipping label
Different types of packages need different types of labels. Here are some of the commonly used types of shipping labels -.
As the name suggests, these labels contain an arrow indicating the correct orientation of products during transit. Orders containing electronic items and hazardous materials use these kinds of labels.
These labels indicate that the entire content of the package is delicate and should be handled very carefully. The word “Fragile” is often written in bold and in large font with bright background for easy readability.
They are used for packages that contain flammable, corrosive, explosive, or poisonous products. These labels are extremely important to avoid any risk to life and property while handling the package. They are also printed in bright colors and have bold text.
International shipping label
Such labels are specifically designed for packages that will cross international borders. They contain important information required by customs officials and shipping carriers in different countries. It always includes the sender’s and recipient’s addresses, the weight of the package, the contents of the package, any customs declarations, and special instructions or warnings for handling the package.
How to Create a Shipping Label
There are two common ways to create a shipping label,
Creating Shipping Labels Through a Carrier
Most shipping carriers like DHL, UPS, FedEx, and USPS have software to create shipping labels. These in-house tools come with ready-made templates that fit their specific label requirements. All you need to do is enter the necessary shipping information, download the label, and print it at your home or office. You can then attach it to the package and drop it off at the carrier location or schedule a pickup. However, this is not the best method in terms of efficiency and cost, especially if you handle hundreds of orders daily.
Creating Shipping Labels Through Software Solutions
You can use specialized software designed explicitly for creating labels. These programs can be installed and integrated with your E-commerce platform, helping you automate shipping. For instance, it can directly connect with your E-commerce store, retrieve every order information from the database, and automatically create the label. This is the more efficient and cost-effective method if you are shipping large volumes of packages.
Shipping Label Best Practices To Follow
Here are 3 special tips you can follow while managing shipping labels for your E-commerce business –
1. Special Instructions
No amount of bubble wrap can protect your package if it is not handled properly during transit. And that’s why it is very important to mention special instructions such as “Fragile,” “Flammable,” “This side up,” etc., on your shipping labels. Adding these special requirements will ensure that your package arrives at your customer’s doorstep in perfect condition.
2. Label Placement
You should always place the label on the top of the package, preferably near the center. This makes it easy for carriers to scan the package. It also ensures that the label is easily visible throughout the shipping process – very important if there is a “This Side Up” or “Fragile” instruction. Also, make sure that the label is not folded over any edges and is affixed securely. This will make sure that it is not covering any important information, such as the recipient’s address.
3. Packing Slips
Make sure your order includes a packing slip, also known as “waybill”. A packing slip typically contains information such as the customer’s address, order date, order number, product details, quantity, customer service number, etc. This is usually placed inside the package or outside in a plastic wallet. A packing slip also sometimes serves as the receipt for the customer. This will help ensure that the recipient receives everything they were expecting and that they have a record of the items that were shipped.
Use Third Party logistic services to streamline the shipping process
As you have seen in this post, creating and managing shipping labels is a time-consuming task. It requires attention to detail, as well as an understanding of shipping carriers and their unique label requirements. Not to mention the added pressure of ensuring that packages are delivered on time and in good condition.
A prepaid shipping label is a label that has already been paid for by the sender, which means that the recipient does not have to pay for shipping. E-commerce businesses offering free shipping use prepaid shipping labels.
Can I print a shipping label at home?
Yes, you can print a shipping label at home. You just need access to a printer, label sheets, and dedicated software for creating labels.
Can I handwrite a shipping label?
Yes, you can handwrite a shipping label, but it is generally not recommended. Handwritten shipping labels can be difficult to read, which can result in delivery delays or even lost packages. You would still need to have barcode labels for tracking.
How much does it cost to get a shipping label?
The cost to print a shipping label can vary depending on the mode you use to create labels. Using softwares to print labels is usually cheaper than getting shipping labels from courier service providers.
Do shipping labels expire?
Expiry policies for shipping labels can vary depending on the shipping carrier. Most shipping carriers have an expiry date of anywhere between 2 weeks to 1 year for the labels generated through their software.
Are there size requirements for shipping labels?
Yes, there are size requirements for shipping labels, and they can vary depending on the shipping carrier. Generally, shipping labels must be large enough to accommodate all of the necessary information, including the shipping address, return address, tracking barcode, and any other required information.
Where should I put a shipping label on a package or box?
Place the label in a location that is visible and easy to scan. It is generally recommended to place the label on the largest flat surface of the package, such as the top or one of the sides. The label should be placed so that it is not obstructed by any seams, flaps, or edges and is positioned straight and flat.
If the package is a box, the shipping label should be placed on the same side as the opening or flaps of the box. This ensures that the label is visible when the package is opened and scanned during the shipping process.
The holistic E-commerce process involves more than just making a sale— it includes everything, from product development to marketing, operations, fulfillment, and more.
But do you know what’s the most challenging of them all— Order Fulfillment.
The reason is that as an E-commerce store, you need to be careful about inventory management and fulfilling the orders in time without compromising the quality.
Failing to do that can hamper your business profitability significantly.
In fact, if an order fails to reach its destination within two days of the estimated delivery date, 69% of shoppers are likely to avoid shopping from that retailer. This is why meeting and exceeding customer expectations is crucial.
And in this article, we’ll cover everything about E-commerce fulfillment services. Starting with the definition.
What is E-Commerce Fulfillment?
E-commerce fulfillment is the end-to-end process of fulfilling an online order. It involves managing inventory, picking products from the warehouse, packaging them securely, and shipping them out on time to the customer’s specified destination.
Here are the steps of E-commerce order fulfillment:
Types Of E-commerce Order Fulfillment Models
Here are the types of E-commerce order fulfillment methods that you can choose from-
In-house order fulfillment
Assuming the responsibility of E-commerce fulfillment in-house can be a wise decision in some cases. By managing the process in-house, brands can earn a higher profit margin on each sale and maintain complete authority over the process. However, it requires substantial initial investment and recurring expenses.
Even though managing the fulfillment process by yourself will provide you with better control over the process and quality, it can be complex and tiresome as the business grows and orders increase. Here are some reasons to avoid maintaining order fulfillment by yourself,
High upfront costs: In-house e-commerce fulfillment requires a significant initial investment in equipment, software, and personnel, which can be a barrier for smaller businesses.
Increased workload: Managing the entire fulfillment process in-house can be time-consuming and labor-intensive, potentially detracting from other important aspects of the business.
Logistics complexity: Managing the logistics of e-commerce fulfillment requires expertise and knowledge that not all businesses may possess.
Risk of errors: With in-house e-commerce fulfillment, there is an increased risk of errors such as shipping delays, incorrect orders, and inventory management mistakes, which can result in negative customer experiences and damage the business’s reputation.
Under the third-party fulfillment model, E-commerce brands delegate the responsibility of inventory storage and transportation to a third-party provider. While the business retains control over the product quality, the expenses associated with shipping and handling are passed on to the external vendor.
When you opt for a third-party fulfillment model, you get the following benefits:
Reduced upfront costs: Outsourcing E-commerce fulfillment can save businesses a significant amount of money by eliminating the need to invest in equipment, software, and personnel required for managing the fulfillment process in-house.
Access to expertise: Third-party providers specialize in E-commerce fulfillment, which means that they have the necessary knowledge, expertise, and resources to handle the entire process efficiently and effectively.
Scalability: As the business grows and order volume increases, third-party providers can easily scale up their operations to accommodate the growing demand without requiring additional investment from the business.
Streamlined logistics: Third-party providers typically have established networks of warehouses and distribution centers, which can help reduce shipping costs and streamline the logistics of e-commerce fulfillment.
Time-saving: By outsourcing e-commerce fulfillment, businesses can focus on other critical aspects of the business, such as product development, marketing, and customer service, which can help drive growth and profitability.
Lower risk of errors: Third-party providers are experienced in managing the e-commerce fulfillment process, which can help reduce the risk of errors such as shipping delays, incorrect orders, and inventory management mistakes, resulting in a better customer experience.
However, just like any other model, there are a few disadvantages to this too. Here are some of the difficulties you might face while working with a 3PL service provider:
Communication challenges: Coordination between the business and the third-party provider can be challenging, particularly if the business requires real-time updates on order status, inventory levels, and delivery tracking.
Dependency: Outsourcing E-commerce fulfillment can create a dependency on the third-party provider, making it difficult for the business to switch providers or bring the fulfillment process back in-house if necessary.
Additional costs: While outsourcing E-commerce fulfillment can save on upfront costs, businesses must pay for the services provided by the third-party provider, which can add up to a significant expense over time.
Dropshipping is a retail fulfillment method in which a store doesn’t keep the products they sell in stock. Instead, the store acquires the product from a third party and arranges for it to be shipped directly to the customer. Consequently, the seller is not responsible for handling the product directly.
This method is often adopted by startups and small businesses seeking to sell products without incurring substantial upfront costs. It is easy to start and has low overhead costs, although profit margins are generally lower due to the additional costs of working with a third-party supplier.
Why do you need an e-commerce fulfillment service provider?
If you are contemplating partnering with a third-party E-commerce fulfillment service provider, here are a few reasons for you:
You don’t have the fulfillment expertise in-house
Managing inbound and outbound logistics can be challenging, and running an E-commerce business requires managing multiple interconnected processes. From managing orders and inventory to preparing for peak seasons, fulfillment companies have the expertise to handle it all.
A single fulfillment center can handle operations for numerous E-commerce businesses and ship millions of orders regularly. This extensive experience and high volume make them valuable strategic partners.
Moreover, fulfillment companies can help E-commerce businesses achieve greater efficiencies in various areas, such as negotiating lower shipping rates with carriers and strategically placing their inventory to reduce delivery time and costs.
You aren’t prepared to handle larger volumes during peak seasons
For many E-commerce businesses, demand can fluctuate greatly throughout the year, with peak seasons often resulting in a surge of orders that can be difficult to manage.
Fulfillment providers have the capacity and expertise to handle these fluctuations, ensuring that businesses can meet customer demand without having to worry about the added complexities of managing inventory and fulfillment operations during busy times. They can scale their operations up or down depending on demand, making it easier for businesses to manage inventory levels and avoid stockouts.
You can’t compete with Flipkart & Amazon in fast delivery
Amazon has already set a standard for a fast and reliable delivery time, and keeping up with this standard is a huge challenge for small businesses.
Today’s customers are busy and look for instant solutions. They don’t want to wait for days just to receive their orders. This is why most fulfillment partners have strategically placed fulfillment centers around the country, which can help businesses make faster delivery at lower shipping costs.
You are not using the right technology
Another advantage of using an E-commerce fulfillment service provider is that they have access to advanced technologies and systems that may not be available to individual businesses. These technologies can be used to streamline the fulfillment process, reduce errors, and improve overall efficiency.
For example, fulfillment providers use warehouse management systems (WMS) to keep track of inventory. WMS can help manage inventory levels, process orders automatically, and reduce errors caused by manual data entry. Making managing a warehouse much easier and more efficient.
You’re unable to focus on strategic tasks
Using an E-commerce fulfillment service provider can free up time and resources for businesses to focus on more strategic tasks, such as product enhancement, marketing, and customer service.
For example, a business focusing more on product development can launch new products to the market more quickly, leading to increased revenue and market share. Similarly, a business investing more in marketing activities can drive greater awareness and demand for its products, leading to increased sales.
What to Look For When Choosing an E-commerce Fulfillment Service?
Now that you understand the benefits of having an E-commerce fulfillment service, you should also be able to pick the right one. There are several fulfillment services available in the market, but choosing the wrong one can negatively affect your business and revenue. To pick the right one, here are a few key points that you need to keep in mind-
Location of the fulfillment center
Customers expect speedy shipping, and the proximity of the fulfillment center to the customer is a crucial factor in achieving this. The closer the warehouse is to the end customer, the shorter the distance the products have to travel, resulting in faster deliveries.
When selecting a fulfillment partner, it is essential to consider the location of their fulfillment warehouses. Identify areas from where you are getting maximum orders and ensure that your fulfillment partner has warehouses in those locations.
Additionally, if your business operates globally, it is vital to confirm that the fulfillment company offers global shipping before partnering with them.
Shipping speed/ Speed of delivery
With the arrival of Amazon Prime’s two-day delivery speeds, fast shipping has become the norm, and customers now expect faster delivery than ever before. And if you don’t stand on this expectation, you may start losing money in no time.
This is where a fulfillment partner comes handy.
A good fulfillment company should have streamlined and effective fulfillment processes that ensure quick delivery to customers.
Features of order fulfillment software
As an E-commerce business owner, you already have a lot on your plate, with various digital tools, applications, and platforms to manage. The last thing you need is to add another software that is slow, disorganized, and difficult to navigate. That’s why it’s crucial to research not only the fulfillment company but also the order fulfillment software they use.
Different fulfillment companies use different order fulfillment software, each with its own features and capabilities. It’s essential to understand your business needs and goals and select a fulfillment partner whose software aligns with them. Additionally, you want to ensure that the order fulfillment software is easy to implement and use daily, saving you time and reducing the risk of errors.
Although fulfillment companies aim for perfection, errors can occur during fulfillment and shipping, such as damaged, lost, or stolen packages. However, the support provided by the fulfillment company during these situations can significantly impact the customer experience.
Fulfillment companies offer various tools and guidance to help E-commerce businesses and depending on the order volume, a dedicated account manager or a team can support the business. Transparency and visibility into the fulfillment company’s performance should also be expected.
Branding & packaging options
With the vast number of E-commerce businesses in competition, it’s crucial to stand out and make a lasting impression on customers. Sending generic brown boxes won’t do the trick anymore. This is where branding options from an order fulfillment company can make all the difference in building a strong brand and generating buzz for your business.
Personalization is key to engaging modern consumers, and a custom-tailored and exciting user experience can create loyal customers who return to your business. Neglecting branding potential when selecting a fulfillment partner can be detrimental to your user experience, especially when 89% of digital businesses invest in personalization and 51% of digital marketers prioritize it as their top goal. So, choosing a fulfillment company with branding options can help create a positive, memorable experience for your customers and drive business growth.
It’s crucial for a fulfillment center to not only ship products, but also provide returns management, as approximately 30% of online orders are returned. While some returns are unavoidable, a reliable fulfillment company should work with you to reduce controllable returns through better forward logistics.
Additionally, your fulfillment partner should offer software that enables you to identify “serial returners,” customers who frequently make purchases only to return them. By identifying these customers, you can adjust your marketing strategies to prevent unnecessary returns. For instance, you may choose not to send promotional emails to these customers during sales or email them after the purchase with positive reviews from satisfied customers to increase their confidence in their purchases. A fulfillment company that helps you reduce controllable returns and identify serial returners can significantly benefit your business by improving the customer experience and reducing costs.
Evaluating order fulfillment services: 14 questions to ask
As the owner of an E-commerce fulfillment center, it’s important to choose the right e-commerce fulfillment service provider that meets your business’s needs. However, it can be difficult to know where to begin or what questions to ask. Here are some key questions to ask while evaluating fulfillment service provider for your business:
Picking And Packing Questions
What kind of products do you ship?
If your products are bulky or weighty, choosing a fulfillment service provider specializing in handling such items is crucial. They will offer you the most appropriate guidance on how to pack and ship your products with utmost care. Conversely, a fulfillment center that predominantly handles large items may not be ideal for smaller products, delicate merchandise, or hazardous materials. Selecting a fulfillment center that caters to your product type is prudent, as this can significantly lower your packaging and shipping costs.
What value-added services do you offer?
Having a warehouse that offers kitting services can be a valuable addition to your E-commerce business. Fulfillment services for E-commerce can involve customized labeling or just-in-time assembly to enhance the value of your merchandise.
What are your customer service practices?
It’s important to ensure that the fulfillment service partner has efficient systems in place to promptly address customer inquiries.
Fulfillment Cost Questions
What is the charge for setting up accounts and integrating sales platforms?
It’s crucial to inquire about all fees associated with your account from start to finish. Concealed fees can transform an initially reasonable quote for fulfillment services into an expense that could harm your business.
Who pays for fulfillment mistakes?
Does the fulfillment center provide any guarantees in case of incorrect packing or shipping of an order? Do they waive fulfillment and shipping fees in the event of an error? Such a guarantee is a good indicator of a high-quality e-fulfillment provider.
What is your policy on inventory shrinkage (loss of products from warehouse)?
Beforehand, determine the shrinkage allowance. A first-rate E-commerce fulfillment warehouse will offer an inventory guarantee, shielding you from expenses related to inventory shrinkage and damage.
Shipping Cost Questions
Do you offer shipping discounts?
As most fulfillment service providers are volume shippers, they may be eligible for reduced shipping rates from freight companies. Make sure that you are receiving the benefit of such discounts.
Do you offer international shipping?
While you may currently sell exclusively to domestic customers, why restrict your future prospects? The E-commerce industry has vast potential for global sales. Opt for an e-fulfillment provider that can assist you in elevating your online store to the next level.
What is your system for shipment tracking?
Ensure shipment notifications are sent directly to both you and your customers and contain tracking numbers. This will allow you and your customers to monitor the shipment and address any issues that may arise.
How fast can you ship my orders?
Inquire about the fulfillment provider’s ability to deliver to at least 70% of the country within two days or less. Additionally, ask about the order turnaround time, such as whether they can ship orders received by a specific cutoff time on the same day.
Questions Related To Maintenance & Technology
Does your warehouse have backup power?
Customers in other regions anticipate their orders to be delivered on schedule, regardless of your fulfillment center’s circumstances. They are unconcerned about any blizzards or power outages. It’s important to inquire about the last time the fulfillment center tested their backup systems. A generator that is not functional will not be beneficial when faced with severe weather conditions.
What inventory management and inventory control services do you offer?
To prevent inventory shrinkage, seek out a fulfillment center that offers real-time inventory management. This method is more precise than periodic spot-check inventories.
Do you have ISP backups in place?
Although the power may be functioning, an internet outage can render a warehouse inoperable. Without the transmission of orders from your E-commerce sales channels, orders cannot be shipped. It’s crucial to ensure that your E-fulfillment service provider employs multiple ISPs, guaranteeing uninterrupted internet service.
What are your security procedures?
This pertains to both internet security and the protection of your merchandise. Determine the controls that the fulfillment service provider implements for access to sensitive and confidential information. They should also perform employee background checks and utilize security cameras to deter theft.
Experience the best fulfillment service with ANS Commerce
Spread across pan India, we provide fully equipped storage facilities with cutting-edge warehouse management systems (WMS) and order fulfillment capabilities: pick, pack, dispatch, and return management.
Have you ever ordered something online and been blown away by how quickly it arrived at your doorstep? That’s the power of immaculate E-commerce warehousing!
Without reliable warehouse logistics support, even the most innovative E-commerce businesses would struggle to keep up with customer demand. In this post, we’ll explore the ins and outs of E-commerce warehousing and how it can help you take your business to the next level. Read along!
What Is E-commerce Warehousing?
E-commerce warehousing is the process of storing and managing goods before they are sold online. Effective E-commerce warehousing ensures that the products are safely stored and accurately delivered to customers on time. It also involves keeping track of where the items are located, how long they’ve been in storage, and how much inventory is available at any given time.
What Does E-commerce Warehousing Management Consist Of?
If you are managing E-commerce warehousing yourself and have not partnered with third-party services, these are some of the activities you might have to handle on a day-to-day basis:
Training and management of warehouse staff
Maintain strong relationships with logistics handlers
Forecasting inventory and shipping volume
Obtain all the necessary certifications and licenses to operate
Ensure that your warehouse is adhering to local safety regulations
Recording incoming and outgoing shipments
And, of course, you need to keep the products secure and ensure that delivery is happening on time.
What Are The Types Of E-commerce Warehouses?
E-commerce businesses can choose from several types of E-commerce warehouses depending on their specific needs and requirements. Here are some of them:
Private warehouses are owned by large businesses, wholesalers, and online marketplaces to handle their own inventory needs. As a result, these warehouses are highly customized and tailored to their needs. For instance, if the business sells perishable goods, the warehouse will be equipped with a cold storage facility. Warehouses owned by Amazon and Flipkart are prime examples of private warehouses.
Public warehouses are owned by government agencies. They are less advanced and well-equipped than private warehouses and may have limited facilities to store your goods. Government agencies rent these warehouses at highly affordable rates. Due to their minimal functionalities, they are only suitable for short-term storage requirements and ideal for sprouting startups.
These E-commerce fulfillment warehouses collect goods from multiple suppliers, group them into larger shipments, and then deliver them to different destinations within the same city or area. They act as both the collection center and distribution centers for brands.
As businesses are sharing transportation but get their own storage space, it is an economical solution for small and medium businesses with limited inventory.
Bonded warehouses are managed by customs authorities, providing storage facilities for imported goods before the business pays the customs duties & taxes.
It is common knowledge that a business that imports goods must pay import duties immediately after delivery. However, a bonded warehouse bypasses this rule by letting the business owners pay when they take the goods out of the warehouse.
P.S: Some interesting facts: the name “bond” comes from the customs authorities issuing the businesses a “bond” when they begin to rent the warehouse.
Smart warehouses use state-of-the-art technologies like artificial intelligence, drones, robotic arms, and automated vehicles to manage everyday warehousing operations. Because of the automation offered by these cutting-edge technologies, these E-commerce warehouses are highly efficient but equally expensive.
Cooperative warehouses are owned by multiple businesses from the same industry or selling similar products. They share the warehouse because they have similar storage needs. Cooperative warehouses are almost like private warehouses, except that multiple businesses own these warehouses.
Members of cooperative warehouses pay a small fee for using this facility, while non-members shell out more.
Better than the traditional warehouse, E-commerce fulfillment centers are designed to not just receive and store your inventory but to pick, pack, and ship orders to your customers too.
E-commerce businesses often use fulfillment centers by outsourcing their order fulfillment to third-party logistics (3PL) providers like Amazon’s FBA (Fulfillment by Amazon) services.
Don’t Let These Factors Stop You From Outsourcing E-commerce Warehousing
Most emerging D2C businesses, despite the benefits of warehousing, do not consider outsourcing their warehousing and distribution. Don’t let the below factors stop you from outsourcing your warehousing process:
1. Your business operates from home
If you are operating from home due to the convenience it offers, it is natural to feel apprehensive about outsourcing your E-commerce warehousing. What if the outsourcing partner asks you to move out to a larger location? What if your staff can’t commute to the new warehouse? What if you have to give up some of the control you had over your business? Such questions are inevitable.
We have good news for you. By outsourcing your E-commerce warehousing, you can still operate from home without losing any control over your business. In fact, the outsourcing provider will only handle the redundant and manual tasks involved in warehousing and storage, allowing you to focus on more strategic and mission-critical aspects of your business.
2. You feel you’re too small to outsource
There is a common misconception that outsourcing is only for large businesses. This is plain wrong. In fact, small businesses have more to gain from outsourcing than large enterprises because they get instant access to expertise and technology that large enterprises would have waited for several years to build.
Also, outsourcing your E-commerce warehousing can help reduce your business risks – you don’t have to worry about the liabilities associated with managing your own warehouse anymore. It will be taken care of by the service provider.
3. You think it is a huge investment
E-commerce warehousing might seem like a huge investment, but it turns out to be quite cost-effective in the long run. For instance, when you outsource, you don’t have to worry about purchasing and maintaining equipment, hiring and training staff, or managing inventory. Instead, you pay the provider a fixed cost, which is way more affordable than managing everything in-house. Additionally, outsourcing allows you to scale up or down your demands, so you can adjust costs based on your business needs.
Benefits Of Using Warehousing Services
Regardless of your scale of business, using E-commerce warehousing services have many benefits:
1. Faster shipping
We are living in the era of 10-minute delivery. So consumers naturally expect all their orders to reach quickly (if not in minutes!). To reduce delivery times and improve customer satisfaction, you can use warehousing services that can expedite your picking, packing, and shipping process. Also, it gives you an opportunity to store your goods in multiple warehouses. This ensures that your inventory is always close to your customers and can be delivered quickly.
2. Better inventory management
Warehousing services can improve the accuracy of your inventory monitoring process and prevent the loss of items. Most warehousing service providers offer advanced inventory tracking and management systems, which let you keep track of your stock levels, monitor product performance, and identify trends and patterns in customer demand. It will help optimize procurement, reduce wastage, and avoid stock-outs or overstocking.
3. Less stress
Managing a warehouse comes with a lot of baggage. You need to monitor the A-Z of your inventory without errors and ensure no delays. Doing this daily can be tiresome. Third-party E-commerce warehousing services take a considerable chunk of these responsibilities off your plate. They have the means and experience required for inventory management.
4. Time savings
For E-commerce business owners, time is money. By freeing up your time for day-to-day supply chain management and analysis, you can better concentrate on business-critical operations.
What Happens Without E-commerce Warehouse Management?
Without a proper warehouse management system in place, E-commerce businesses can face a lot of operational issues that can negatively impact their reputation and sales. Here are some of the consequences of not adopting effective E-commerce warehouse management:
1. Inventory gets lost
Without investing in E-commerce warehouse management, you may find it challenging to keep track of your inventory. As a result, there are high chances of losing, misplacing, or having products expire, especially when dealing with an extensive catalog.
2. Wrong inventory gets shipped
Without proper processes in place, there are high chances of manual errors creeping into your warehouse operations. You may end up shipping the wrong products to the customers, which can result in dissatisfaction, returns, and additional costs for your business. Even worse, it can damage your reputation and drive your loyal customers away.
3. Stock-outs or over-purchasing inventory
By not adopting E-commerce warehouse management, you will never know how much inventory you should have on hand. This can result in early (and unexpected) stockouts or over-purchasing of inventory. Stockouts can lead to lost sales, while over-purchasing can lead to outdated inventory that you can no longer sell. Not to forget the additional cost of management.
How 3PL services can help you with warehouse management
Outsourcing your warehouse management to third-party logistics (3PL) providers let you enjoy benefits like improved efficiency, better scalability, and reduced costs. Here are some other ways in which 3PL services can benefit you:
Ship easily on major marketplaces
Many 3PLs offer direct integrations with major marketplaces like Amazon, Flipkart, Myntra, Nykaa etc. By partnering with such providers, you can seamlessly fulfill all your orders and manage inventory across multiple sales channels from one centralized location.
Customers hate to be in the dark when it comes to their orders. They want to be in the loop from the moment they place an order till the time it arrives on their doorstep. This is made possible through 3PL providers, who provide advanced order tracking systems. It enables the end users to monitor their order progress in real-time, resulting in customer satisfaction. As an E-commerce business owner, that’s one key responsibility you don’t have to worry about.
Just like order tracking systems, most 3PL providers offer sophisticated inventory management systems that let you optimize your inventory levels. Apart from the real-time status of your inventory, these systems monitor trends and historical patterns, helping you predict demand and build stocks. In brief, you can avoid the pain of overstocking and stockouts.
Scaling up operations
With rapid growth comes the demand for more space to store your inventory. This is where 3PL providers help. They offer scalable warehousing solutions that adapt to your business’s changing needs. Whether you need additional storage space or expanded shipping capabilities, 3PL service providers offer everything at an affordable cost.
Faster order fulfillment and return management
Location can no longer be an excuse to deliver orders late in this hyper-connected world. Today, if you don’t deliver fast, your competitors will. This is where the need for a 3PL provider arises. They normally own multiple warehouses spread across the country. This lets you ship orders and manage returns quickly as your distribution centers are closer to the customers, and the orders have to hop across fewer shipping zones.
Let ANS Commerce Help You With E-commerce Warehousing
Spread across pan India, we provide fully equipped storage facilities with cutting-edge warehouse management systems (WMS) and order fulfillment capabilities – pick, pack, dispatch, and return management.
According to a report by Statista, the revenue generated by the Indian E-commerce market was estimated to be 64 billion USD in 2020 and is expected to reach 200 billion USD by 2027.
Also, a report by the Indian Brand Equity Foundation (IBEF) states that the number of online shoppers in India is expected to reach 220 million by 2025, up from 140 million in 2018.
These stats reflect that the Indian E-commerce industry is proliferating, and Indians are inclining more toward online shopping than offline.
But here’s the thing— it’s still difficult for local retailers to start their E-commerce store. The reason behind this is a lack of experience and resources, which makes them take the easy route.
As a result, they end up selling only on known E-commerce platforms, also known as marketplaces.
But these platforms aren’t Enablers. There’s a fine line between a marketplace and an E-commerce Enabler.
And we will discuss everything about E-commerce Enablers.
Starting with the basic definition.
What Is An E-commerce Enabler?
An E-commerce Enabler is a company that provides comprehensive solutions to brands to operate their online stores. These solutions include website hosting & optimization, digital marketing, customer service, warehouse & inventory management, and logistic support.
It is important to note that E-commerce Enablers are different from E-commerce platforms like Flipkart, Myntra, Snapdeal, and Amazon, which only provide a platform for businesses to sell their products, and for consumers to shop online.
On the other hand, an E-commerce Enabler can assist a brand from start to finish. By offering a solid digital strategy, E-commerce Enablers can help businesses successfully run their E-commerce operations. Retail companies can also opt for full or partial solutions from E-commerce Enablers keeping the cost in control. Also, brands can focus on expanding their business by delegating non-core business operations to outside parties.
What Does An E-commerce Enabler Do?
Here are some of the basic offerings of an E-commerce Enabler-
Online Store & Catalog Management
In order to ensure that your online store is operating efficiently and generating sales, there are several tedious tasks that need to be executed well. These tasks include setting up the online store, managing product listings, running promotional campaigns, managing orders across multiple marketplaces, as well as gathering and reporting insights such as customer feedback.
These tasks are the core focus of E-commerce Enablers, who deal with them on a daily basis and help you manage storefronts on marketplaces, social media platforms, and your own website and mobile application.
Below are some examples of services provided by E-commerce Enablers like ANS Commerce:
Manage product listing and optimization on marketplaces
Track active and inactive SKUs and manage inventory
Build pricing strategies and promotional plans to increase sales
Provide logistic & warehousing support
Provide order management and last-mile delivery support
Ensure exceptional customer service by answering their queries
Digital Marketing/Performance Marketing
Every E-commerce store needs to leverage digital marketing to build brand awareness and reach potential customers. There helps an E-commerce Enabler. With digital marketing experts on their team, E-commerce Enablers can help you plan exhaustive marketing strategies for various channels, including ads, content creation, social media, and more.
With an E-commerce Enabler by your side, you can reach your potential customer effectively, resulting in increased traffic, higher conversion rates, and better sales.
Warehousing & Supply Chain Management
Managing the E-commerce supply chain is challenging, as it involves several stages, such as inbound logistics, warehousing & inventory management, and outbound logistics. These processes require considerable investment and expertise to manage effectively.
Businesses can rely on the competence of E-commerce Enablers to handle E-commerce logistics. These service providers, often in partnership with third parties, offer a range of services such as inventory management, order fulfillment, and return processing to streamline the E-commerce supply chain process.
End-to-end Customer Support
Delivering an exceptional customer experience is a crucial factor in converting store visitors and prospective customers into actual purchasers, as well as retaining them and ultimately turning them into loyal customers. As the traffic and demand on a brand’s online store increases, it becomes challenging to respond to every inquiry or feedback promptly without dedicated resources.
This is where E-commerce Enablers come in. With their experienced customer service teams, E-commerce Enablers offer the perfect solution to this challenge. They can support your business by responding to all your customer inquiries in a timely manner and maintaining a great customer relationship experience.
Brand Store Hosting Tech Platform
E-commerce Enablers understand the need for a robust brand-hosting platform in this technology-driven world, and so offer a brand store tech platform to help you deliver an exceptional E-commerce experience. These platforms typically provide various tools and features that enable businesses to design and customize their online stores to reflect their brand identity and manage all aspects of their store’s operation, including product listings, inventory management, order processing, and customer engagement.
Brand store tech platforms may also offer analytics and reporting tools to help businesses track their store’s performance and make data-driven decisions to improve sales and customer satisfaction.
Our brand tech store, Kartify, has helped over 100 D2C brands improve their digital footprints and grow sales. Here are some benefits of hosting your E-commerce store with Kartify:
Seamless Integration: With Kartify, you can integrate with more than 50 third-party tools and systems, which makes it easier to manage all aspects of your E-commerce business, including payment gateways, marketing automation tools, SMS & email providers, and order management systems.
Managed Support: Kartify offers comprehensive support throughout the migration process and beyond. The dedicated account team, in-house dev-ops, and design experts make it a hassle-free migration.
Highly Customizable: Kartify is a highly customizable, fully mobile responsive platform. You have complete control over the look and feel of your store, including user flows, layouts, menu, and filter options.
Data Security: Kartify takes comprehensive measures to keep your store and customer data secure by adhering to ISO/IEC 27001:2013 security standards, performing regular security audits with vulnerability assessments and penetration testing, and encrypting all data on the platform with access control.
Made for India: Kartify has been designed to the tastes of the Indian audience and offers many India-specific features like login with OTP, automatic pincode & city detection, GST invoicing, and more.
Omnifriendly: Kartify enables the fulfillment of online orders from offline shops, providing a unified and convenient experience for customers. You can also conduct offline surveys and offer cash returns, further enhancing the customer experience and building loyalty.
The Industry’s Blind Spot: E-commerce Enabler Is More Than What You Understand
Marketplaces are not E-commerce Enablers
A marketplace is an online platform that enables businesses to sell their products or services to customers. Examples of marketplaces include Flipkart, Amazon, Myntra, etc.
While marketplaces offer a new channel for businesses to sell their products and facilitate transactions online, they function merely as intermediaries connecting suppliers to buyers. They do not provide end-to-end support for businesses like E-commerce Enablers, who can manage a business’s operations from start to finish.
E-commerce platform alone is not an E-commerce Enabler
Shopify, Magento, WooCommerce, and Shopline are examples of E-commerce platforms that furnish the necessary digital infrastructure to establish an online store, BUT THEY ARE NOT E-com Enablers However, although these platforms are useful in launching your online business, they typically do not offer ongoing operational assistance that is provided by E-commerce Enablers.
A payment gateway solution is not an E-commerce Enabler
An online payment gateway serves as a digital substitute for a physical credit or debit card reader and is responsible for handling customer payments when integrated into your online store. Numerous payment gateways are available for digital vendors, including well-known options like PayPal, Stripe, and Square.
However, it is important to note that payment gateways primarily address your payment processing requirements and differ significantly from E-commerce Enablers.
Third party logistics are only part of what E-commerce Enablers represent
Third-party logistics (3PL) providers offer a range of services related to E-commerce logistics and order fulfillment, which typically encompass warehousing, product picking and packing, and return processing.
E-commerce Enablers offer comprehensive services throughout an online business’s value chain. However, it’s worth noting that 3PL companies mainly handle inbound and outbound logistics aspects, and do not typically address operations, marketing, or other related services. After all, they are third-party logistics companies.
Marketing platform is a tool and not an E-commerce Enabler
Numerous marketing platforms are available to help you streamline and analyze data, as well as automate marketing tasks. For instance, you might utilize MailChimp to send electronic direct mails (EDMs), SEMrush to build your SEO strategy, or HubSpot to manage sales, customer relationships, and other business-related aspects.
However, it’s important to recognize that these are merely tools and software that enable your marketer to perform more efficiently. They automate repetitive tasks and provide data analytics for additional insights, but they do not replace the marketer’s role.
Why Should You Partner With An E-commerce Enabler?
Partnering with an E-commerce Enabler offers numerous benefits for businesses that operate in the online space. Here are some reasons why you should consider partnering with an E-commerce Enabler:
Get a team of E-commerce experts (cover tech, marketplace, and digital marketing experts)
Partnering with an E-commerce Enabler gives businesses access to a team of E-commerce experts, including tech, marketplace, and digital marketing specialists. These experts can help businesses set up and optimize their online stores, connect them with various online marketplaces, and develop and execute effective digital marketing strategies. By leveraging the expertise of an E-commerce Enabler, businesses can improve their online presence, increase sales and revenue, and stay ahead of their competition.
Additionally, E-commerce Enablers provide comprehensive services, that are
Cost-effective: Doesn’t need a huge budget to get started.
Flexible: Works as a part of your internal team.
The best part is they come with a panel of experts with years of experience to guide you in each step. This makes it easier for businesses to focus on growing their operations, as E-commerce Enablers can provide support across the entire value chain of an online business. Overall, partnering with an E-commerce Enabler is a smart choice for brands that want to succeed in the online space and achieve their goals efficiently and effectively.
Get proprietary tech solutions
E-commerce Enabler companies offer powerful toolkits for online businesses to accelerate their growth. These tools and software are easy to use but are expensive and challenging to develop. E-commerce Enablers have invested years of experience to build these technologies. Working with an E-commerce Enabler gives online businesses access to these valuable resources that they may not be able to develop internally.
Free up your time for business growth
E-commerce Enablers offer comprehensive support to help online businesses grow, scale, and succeed in the E-commerce industry. They assist with various aspects of business operations, develop an integrated digital strategy for the brand, and provide tool sets for automation and analytics.
Partnering with an E-commerce Enabler is like having a flexible growth partner that can share the load of your online business operations. By outsourcing your E-commerce value chain to an Enabler, you can save valuable company resources and focus on core activities that drive results. This approach enables online businesses to focus on their strengths and create a streamlined, efficient operation that maximizes growth potential.
Ultimately, partnering with an E-commerce Enabler can help businesses stay competitive, adapt to market changes, and achieve long-term success in the ever-evolving E-commerce landscape.
How to identify the perfect E-commerce Enabler for your brand?
Choosing the right E-commerce Enabler for your brand is an important decision that can impact your business growth and success. Here are some key factors to consider when identifying the perfect E-commerce Enabler for your brand:
Services and capabilities: Consider the services and capabilities the E-commerce Enabler offers. Do they align with your business needs? Do they have the expertise and experience in the areas where you need support?
Industry experience: Look for an E-commerce Enabler with experience in your specific industry. This can provide valuable insights and help you stay ahead of the competition.
Technology and tools: Evaluate the technology and tools that the E-commerce Enabler provides. Do they offer the features and functionality that your business requires? Are the tools user-friendly and easy to integrate with your existing systems?
Customer support: Consider the level of customer support the E-commerce Enabler offers. Will they be available to assist you when you need help?
Third-party partnership: Third-party providers can offer comprehensive support for various processes such as logistics, supply chain management, and more.
Cost and flexibility: Finally, consider the cost and flexibility of the E-commerce Enabler. Is the pricing structure transparent and reasonable? Are there flexible options that can grow your business?
By carefully evaluating these factors, you can identify the perfect E-commerce Enabler for your brand that can provide the necessary support and tools to help your business grow and succeed in the E-commerce landscape.
Kartify Brandstore: A proprietary platform that is fully customizable and integration-ready to support your brand’s online store.
Performance Marketing: Experienced team to lead performance marketing efforts on platforms such as Google Ads, Facebook, and marketplaces, striking a balance between sales and return on ad spend (ROAS).
Marketplace Management: Skillful planning and execution of sales strategies on more than 10 marketplaces, including Amazon and Flipkart.
Warehousing and Fulfillment: Nationwide warehousing and fulfillment infrastructure with 3PL support tailored to your specific logistics requirements.
If you need help in setting up your online store or scaling your business in Indian markets. Book a free consultation with our E-commerce expert today!
When it comes to making purchase decisions, price is often the deciding factor. Several studies have shown that pricing is critical and relevant to consumer buying behavior. With so many options available in the world of DTC, getting your pricing strategy right can be a make-or-break moment for your business.
In this article, we’ll dive into 10 common pricing strategies that DTC brands can use along with examples of each. Keep reading to learn more!
What Is A Pricing Strategy?
Setting the best price for goods or services is a process known as pricing strategy. This method helps to level prices and margins according to market demand in order to boost profits and enhance shareholder value.
There are several things that need consideration when selecting your pricing strategies such as marketing aims, business revenue aspirations, target audience, brand placement, and consumer demand. An effective pricing technique will reduce expenses while creating value for your customers; thus assisting with the expansion of your venture.
A Few Things To Check Before You Choose Your DTC Pricing Strategy
Know the total cost of your product
Before you set your prices, be sure to know the total cost of your product. If you order products, add up their cost per unit — that’s your cost of goods sold. When crafting each piece yourself, consider the bundle of raw materials you need and how much time it takes to create one item for sale. You can also take into account the following costs, so that your business turn out to be profitable:
Shipment and Handling Cost
Identify your ideal customer profile
It’s important to note that your hard work won’t amount to anything if you don’t have any buyers.
It pays to think about your customer’s disposable funds. Some may search for the best bargain, while others have no qualms with parting ways with a few extra dollars if it means getting something of quality. Understanding these preferences will give you a better footing in gauging what prices to offer in order to maximize customer satisfaction!
Thus, it follows that you must calculate a value-driven profit margin, so your product is attractive to the desired target market and makes financial sense for you as well.
Find your USP/value proposition
What sets your business apart? Finding the perfect pricing strategy is key to highlighting the unique value you’re offering to consumers. Take the story of Tuft & Needle for example: they carved out a special place in the mattress market with their affordable prices and exceptional quality. Similarly, find what sets you apart, and let it guide your pricing decisions to make sure no one has any trouble recognizing how unique your business is!
10 Common Pricing Strategies Used By DTC Brands
Competition-based pricing strategy
As the name suggests, competition-based or competitive pricing strategy is based on understanding competitors’ prices and using them as a benchmark. Customers often compare prices when making their purchase decisions, making small price differences crucial for success in this type of market.
You can opt to go a few cents lower of the price your competitor is offering, offer the same as your competition, or exceed the prices of your competition to be in the game.
For instance, D2C brand Dollar Shave Club launched the first subscription-based business that sends fresh razors and other grooming products to your doorstep via email.
Yes, a D2C startup came onto the scene, took on a global brand like Gillette, and won with a quality product and a competitive pricing strategy. In fact, Dollar Shave Club eschewed the traditionally high margins on razors and delivered them at a competitive price.
Cost-plus pricing strategy
A cost-plus pricing or also known as the markup pricing strategy involves charging customers a price that is higher than the cost of producing the good or service.
Cost-plus pricing can be effective when there are high fixed costs associated with production, such as manufacturing materials and labor. By charging customers more than these costs, businesses can increase revenue while limiting their exposure to price risk and market fluctuations.
For example, let’s say you started an online shoes business and want to calculate the selling price of one shoe:
Material Cost: $50
Labour Cost: $200
Shipping Cost: $10
So now, the cost of your product will be $260. Now, you can add a 45% markup of the total cost of the product to have a profitable business. The formula, then, for the total price of the product would be:
Total production cost ($260) * Markup (260*45/100) = Selling Price of your product ($377)
Value-based pricing strategy
Value-based pricing strategy is when the price of a product or service is based on its value to the customer, rather than on the costs incurred to produce it. Businesses show the product is premium and exclusive for buyers.
In a value-based pricing strategy, price is set high enough to cover costs (including variable costs and overhead), but competitive enough so that customers feel they are getting a good deal. This approach may be more effective in competitive markets where customers can switch providers easily.
For instance, fashion lifestyle brand Ralph Lauren often follows a value-based pricing approach.
Price skimming strategy
This E-commerce strategy refers to the business tactic of starting off at a high price in order to satisfy consumers who don’t mind paying extra for its products. As other businesses start to join the market, then reduce their prices in order to entice a new, more budget-conscious customer base.
For instance, Apple is a brand that uses a price skimming strategy, especially during the launch of its latest iphone. It starts off at high prices and slowly lowered prices over time to attract budget-conscious consumers.
A skimming pricing strategy can be a great way to make a lasting profit from your products, but it can also backfire. If you lower the prices too much, consumers who paid full price may get irked and competitors will sense an opportunity to swoop in and imitate your ‘fake’ margins.
Penetration pricing strategy
Contrast to skimming price strategy, the penetration pricing strategy is when the company sets a low price for its new product or service to gain customers’ attention and raise awareness.
It is also known as the discount pricing strategy and works best for price-sensitive customers but is not sustainable in the long run for businesses. This strategy is usually best for brands that are new in the market and want to attract customers. However, there is always a risk of losing those customers once the business increases its prices back to normal.
Pro-tip: To truly make an impact with your product, emphasize its value instead of the price tag.
Netflix pulled off one of the greatest feats in pricing strategy history with their ‘penetration pricing’ model: charging a low fee for access to their instant streaming service with subscriptions, they boosted their customer base exponentially and gained an unbeatable market share. In doing so, Netflix managed to establish a monopoly over the industry.
Psychological pricing strategy
This marketing strategy has been used by businesses across various industries to optimize pricing and boost sales. It does exactly what the name suggests – targets human psychology to increase sales.
Take example of the 9-digit effect. Customers see a product worth $99.99 as attractive and a good bargain even though the price is almost the same as $100. The “9” makes all the difference in perception.
Apart from this, a BOGO offer or changing the colors and fonts of the pricing tag have also proven, in various stances, to be effective.
For instance see how Indian D2C brand BoAt uses the psychological pricing strategy to up its sales:
Credit: Boat Website
Keystone pricing strategy
Keystone Pricing is an approach that involves setting a price for a product or service that is double the cost of production (or the wholesale price). This method can help businesses maximize their profits while also keeping prices competitive and attractive to customers. It is usually used by retailers.
Here’s an example to help illustrate the concept. Let’s say a company produces a product with a cost of production at $100. Using keystone pricing, they would price that product at $200 – effectively doubling their investment with a 50 percent markup!
Bundle pricing strategy
A bundle pricing strategy involves selling multiple products or services together at a discounted price (than the total amount of all the products individually). This allows the business to increase their revenue by selling more products per unit than if each product was sold on its own.
Let’s understand this with an example – a combo meal from Mc Donald’s. The combo includes small fries, a small drink, and a burger. If the customer only wanted the small fries they would have to pay some extra for it separately. However, if the customer buys the combo meal consisting of all 3 items, then they can keep all 3 items for a discounted price.
This strategy is effective because customers value having multiple products in one package more than paying extra for each product individually.
Anchor pricing strategy
Anchor pricing is a product pricing strategy that businesses use to create a favorable comparison between their discounted prices and the original prices. This way, consumers can quickly and easily see the savings they’ll get when they make their purchase. The comparison can also be between the price of your and your competitor’s product.
One way businesses show this is by cutting the anchor price prominently and displaying the discounted price near it! You can find this strategy being used by many businesses, in the malls, and on online marketplace such as Amazon.
Credit: Ring Alarm
Economy pricing strategy
An economy pricing strategy is an approach that involves pricing your products low and gaining more revenue through higher sales volume. This type of pricing works particularly well for commodity goods like groceries, drugs and medications, etc. where there isn’t a lot of brand recognition.
This business model relies on regularly introducing new customers to the product in order to generate the desired revenue.
Again, Dollar Shave Club is the perfect example of a D2C brand utilizing economy pricing, as they outrun Gillette and their pricey razor blades.
Find The Right Pricing Strategy For Your Business
There is not one single way of establishing a successful pricing strategy; what works for one D2C business may not be ideal for another. Therefore, doing a thorough research and figuring out which method is right for your product, marketing plan, and buyers is essential.
With the knowledge gained from this article, you can make sound decisions and find the optimal pricing to provide customers with an enjoyable shopping experience.
About ANS Commerce
A FlipKart group company, ANS Commerce, is India’s #1 Full Stack E-commerce Growth Partner trusted by 200+ Brands!
From creating your online store, running profitable performance marketing campaigns, managing marketplaces to order fulfillment & warehousing – we do it all to supercharge your brand’s growth!
International Women’s Day is a global day, celebrated each year on 8th March to embrace the achievements of women all around the world. Not only does the day raise awareness about gender equality, but also motivates women to make the most out of their potential.
To acknowledge the #IWD2021, ANS Commerce, India’s #1 full-stack e-commerce enabler, shares the conversation with Sonali Lalvani, Founder & CEO, Toniq – Fashion accessories brand in India. From the struggles she had to build this brand to the one thing that motivated her constantly, you’ll hear everything as she made her way into the entrepreneur ecosystem.
“ANS Commerce strives to raise awareness of gender equality and bring a change in the society.”
Theme for International Women’s Day 2021 | #ChooseToChallenge
This year the theme ‘Choose to Challenge’ outlines the courage and strength to take up a challenge eliminating gender bias and inequality. From challenge comes the change, thus the theme motivates people irrespective of gender to spread gender awareness while choosing to take up a challenge!
#HearHerJourney featuring Sonali Lalvani
To make women celebrate their worth with well-priced and beautifully designed fashion accessories, Toniq began its journey 10 years ago when there was a massive gap in the Jewelry category. But Sonali was determined and chose to take up the challenge, fulfilling this gap. Today, Toniq has 200 Store-within-Store and also building out their online presence to reach a wider female audience.
Sonali Lalvani, CEO & Founder, Toniq, shares her journey as an entrepreneur with us. Not only did she face difficulties operating her business, but also lived through the judgements of many people. Explaining the challenges, she said, “Being a women entrepreneur and living in a fairly conservative city, Chennai, I have faced many issues. From the landlord refusing to sign the document without a male presence to the staff expecting a male to make the final decision of recruitment, I have witnessed many difficulties. In one of those instances, there was this priest during the Diwali Pooja, who got shocked when he learned that I am the CEO.”
After facing such challenges, Sonali is trying to make her company’s work culture healthy and comfortable for women. Sonali said, “ We are taking considerable steps in making our workplace extremely women-centric. In fact, our current workforce comprises 70% of the women.” Practicing the aspects of gender equality, Toniq promotes their people solely on the basis of performance. “The workplace must realize that both men and women should feel safe to speak their minds”, she added.
For Sonali, the last year was very challenging as there was a strict guideline to close all the physical stores all across the country. But she didn’t lose hope and continue to scale her business online. She said, “Scaling up the e-commerce side of the business was my best decision ever as it has helped us a lot to boost our sales.”
Sonali Lalvani said she lives by the dictum – “Work today for your tomorrow.”
Today, our nation needs more women entrepreneurs like Sonali, to bring a change in the society’s patriarchal mindset. In fact, a woman entrepreneur not only motivates a woman herself but also inspires men of society to celebrate and embrace her passion and worth. “Women bring in a different perspective, and considering for us at Toniq our audience is women it just makes sense to have it more women-driven.”
Addressing all the women who want to start their own business Sonali says, “Do your homework. If you are looking at a business in fashion, it’s definitely not glamourous and the hours can be brutal. Always do it because you truly want to make a difference in your customs life.”
How is ANS Commerce helping Toniq?
ANS Commerce is assisting Toniq with its full-stack e-commerce solutions. From providing performance marketing to brandstore tech to warehousing & fulfillment to marketplace management, we strive to support Sonali’s business by broadening the brand’s online presence. Inspired by her journey? Want to start your own e-commerce business? Request your free DEMO now!
We hope that Sonali’s inspirational journey has motivated all the women out there. With that, team ANS Commerce wishes you a very happy women’s day! Let’s all #ChooseToChallenge this #IWD2021.
With the rise in online shopping, the influence of email marketing has also emerged. Gone are the times when the exchange of emails was used for mere transactional purposes. Today, almost all brands are employing content marketers to strategize and curate persuasive email copies.
When a new offer rolls out, or a new collection comes in, retailers pop their users with emails. But it isn’t enough just to send those emails. They need to be inspiring and motivating so the users actually end up making the purchase. Otherwise, your offers will be sent to spam or avoided completely. Let’s study what actually influences the effectiveness of email marketing.
Here’s How to Create a Persuasive Newsletter to Drive Customer’s Attention!
1. Keep the design elements minimal
Making your design too flashy would only result in the unsubscription. With minimal, we don’t mean boring colors and monotonous themes. Keep a balance between text and images. It’s essential to leave some negative space (white space) here and there, for the design to settle in the mind of the readers. Without that, you’ll end up creating clutter and confusion. Harmony and balance of the design elements is the key to a successful newsletter.
2. Draft short-crisp copy
Email newsletters are generally sent at the time when people are waiting to board a metro, or traveling in a cab. Optimize the content of your newsletter so that it’s easy to consume in a short time. People don’t respond to the text the way they do to the visuals and graphics. But if you keep your text rather crisp with quirky words and informal expressions, you have a chance to win the attention.
3. Insert product unboxing video play button
Videos are best to engage the users, especially if they talk about the pros and cons of a product. To attach a video to your newsletter, add an image with a video play button, redirecting your user to the YouTube video. Since these videos are more about product feedback, they enhance your brand reputation and create social proofs.
Quick tip: User testimonial videos should be original. To create such videos, you can request your customers to send in their video opening the product with complete details.
4. Write process tutorials with step by step images
Another way to entice customers is by curating tutorial content of your offerings. For example: If your business is all about leather bags, sending a tutorial on “How to clean your leather bag?” will grab attention easily. You can add CTA to the images, linking the leather bag page of your website. Also, highlight the features of your product wisely while writing the tutorial to convert the readers.
5. Add animated GIF Images
To drop your customers in the sales funnel, it’s important to formulate a narrative. Animate promotional messages have an advantage over mundane text messages as they can tell a tale, fascinating the reader to hit the button. Now the question comes; ‘how to create them?’ There are plenty of GIFs generators, helping you create a GIF. Also, don’t use more than one GIF image to avoid any clutter. To convert the readers and generate leads, make sure the image is clickable and redirects to the page.
Quick tip: Keep your GIF size to 1 MB as a heavy newsletter can get cropped, damaging its aesthetics.
6. Include countdowns in your newsletter
To add the sense of urgency and convert your customer quickly, include a clock with countdowns of your most exciting offers. Limited offers have one advantage over the normal offers, it stimulates user interests in a jiffy. They work the best at the times of spring and autumn season sales.
7. Announce contests and giveaways
Community outreach ideas such as running contests and competitions work best on social media. But newsletters are also an incredible platform to convey the message. You need to be more creative and unique to run contests over email. Scratch cards or win wheels are some of the elaborative ideas to make the most out of email marketing.
Quick tip: You can also include a simple creative, asking readers to tag your brand on social media with their videos and follow your page to win exciting prizes. This way your engagement on other social media platforms increases.
If your e-commerce store is not gaining brand visibility, then fret not and invest in our performance marketing solutions. From checking your brand logo to creating account progress reports to optimizing the load time of the website, ANS Commerce provides you with performance marketing solutions across various channels with a special focus on sales and ROAS. Request your free DEMO now!
A well-curated emailer can help you drop your customers in the sales funnel. Don’t forget to add CTA to your content with optimized HTML URLs. Also, keep the tone of your content the same for all the newsletters as it’s the voice of your brand. Follow these tips and promote your brand efficiently.
As the Indian economy has suffered due to the pandemic, the first paperless budget has made its way as an economic vaccine, aiding the nation’s economy. While presenting the union budget, Finance Minister Nirmala Sitharaman has introduced many policies and guidelines, helping the digital business to scale their operations.
While introducing schemes such as PM Atmanirbhar Swasth Bharat Yojana, Mission Poshan 2.0, Urban Jal Jeevan Mission, etc., there have been other initiatives taken by the government to help specific sectors.
“A Limit of turnover for the tax audit has been increased to Rs. 10 crore from Rs. 5 crore for entities carrying out 95% transactions digitally”
If you are starting to start your own e-commerce business or thinking to expand your product line, this is indeed the best time to start. With the union budget rolling out, you can probably reckon upon starting up with the products mentioned in our list, inducing more profits.
To help you understand the best e-commerce products you can surely invest in 2021, we have curated a list! Let’s dive deeper into the 5 best products profitable to sell this year.
5 Most Worthy Products to Sell in 2021!
1. Steel Utensils
If you already have a business manufacturing steel utensils or are planning to do so, here’s a piece of good news for you. Custom duty on stainless steel has been reduced to 7.5%, making it cheaper to import in India. Not to mention after the pandemic, people are becoming health conscious and switching over to more traditional ways. Using stainless steel in cooking is one of them. It’s both beneficial for your health and the environment – given the fact it can be melted again.
How to sell
Apart from your own brandstore, you can think of selling on various marketplaces including Amazon and Flipkart. Also, mention the benefits and the quality of your utensils in the marketing copy to entice the attention of visitors.
Quick tip: If you are having a problem selling on marketplaces, let us assist you with our robust marketplace management solution. From account management to growth planning, we help you establish your mark while boosting your sales. To know more, request your free DEMO today!
“The union budget 2021 highlights Rs. 1,500 crore for the proposed scheme to promote digital modes of payment.”
2. Nylon Apparels
It’s the best chance to showcase your creativity and invest in Nylon yarns to manufacture designer apparel. With a reduction of the Basic Customs Duty (BCD) on caprolactam, nylon chips, and nylon fiber & yarn to 5%, businesses can improve their production in fashion clothing. With its wrinkle-free properties, nylon is one of the best synthetic fabrics people love to buy. Be it formal wear for office or sportswear for the gym, the fabric is highly versatile.
How to sell
Influencer marketing campaigns work the best for marketing fashion and lifestyle products. If you are low on budget, you can look for micro-influencers with more niche market audiences.
3. Cotton and Silk Yarns
Union budget 2021 states to increase the Customs duty on cotton from nil to 10% and on raw silk and silk yarn from 10% to 15%. Upsurging the demand for Indian manufacturers of silk and cotton can be beneficial for both the economy and the local businesses. Starting your e-commerce business in cotton and silk handicrafts could turn out to be beneficial in 2021.
How to sell
The best way to sell raw materials over the internet is via social media and google marketing campaigns. Start with persuasive copy, reflecting the sustainable techniques you have used to produce the yarns.
4. Food and FMCG
In the union budget 2021, the government has come up with various schemes and investment plans to boost growth momentum for India’s fast-moving consumer goods. Investments in rural infrastructure and the extension of farm credit will trigger the consumption boost for food items. Products such as vegetable oil, millets & grains, wheat flour, etc are beneficial for businesses to invest in.
“Operation Green Scheme’ to be extended to 22 perishable products, to boost value addition in agriculture and allied products!”
How to sell
One of the best ways to sell FMCG and food products online is via online stores. You can establish your own brandstore, showcasing your offerings.To get the best out of it, start your brandstore from scratch with Kartify – our brandstore tech made in India. Request your free DEMO now!
5. Gold and Silver Jewelry
To make Indian jewelry more competitive in the global markets, the Indian government has reduced the import duty on gold and silver to 7.5% from 12.5%. This move not only gave relief to the consumers but also helped the businesses, broadening the prospects of India’s rich heritage to global markets. From more intricate designs to ethnic jewelry designs, the deduction in the duty will help the jewelry manufacturers.
How to sell
To sell jewelry online, social media platforms such as Instagram and Snapchat work the best. You can start with Instagram sponsored posts and stories, showcasing the jewelry design especially amid the festive and wedding season, grabbing more attention.
The union budget 2021 highlights reforms and guidelines to increase Indian production. So this is your time to launch your own brandstore. Also, we might have missed some of the other product category recommendations, but all the products on the list are carefully chosen and thoughtfully analyzed.
India’s tourism never fails to amaze us with its diverse nature. From cool mountain roads to sun-kissed foreshores, the rich heritage offers great attractions to tourists all around the world. And to celebrate the beauty of it, January 25th is celebrated as the National Tourism Day around the nation.
The tourism industry of the country has been one of the largest contributors to the nation’s GDP in recent years. But the outbreak of the COVID-19 has badly impacted the industry. Sectors such as hotels/lodging, recreation, and entertainment, transportation, etc. have been severely affected by the onslaught of the pandemic as traveling and vacationing was on a complete halt.
The National tourism day 2021 can in time help us move afar the pandemic by letting us invest in our nation’s rich heritage and culture. While keeping a few things in mind, you can jump on the adventurous short trip for the love of Indian Tourism!
Are you an avid traveler, needing a day to yourself to freshen your mind and soul? We have curated a list of essentials you must keep when you plan to go on a trip. All these products mentioned below are offered by ANS Commerce’s partner brands!
Mind you, this list is created keeping the precautions in check. So let’s just snag our buddies and get ready for a short trip?
10 essentials to carry while traveling post COVID-19!
1. Face masks by Being Human
Starting from the mandatory yet the most important thing. Face masks have become a go-to aid no matter when we plan to step out of our homes. Not only does it protect you from the virus but also prevents others from getting infected. Keeping the vogue factor on point, Being Human has popped up with the most amazing collection we can’t take our eyes off. With a plethora of designs, the brand has an amazing combo of masks. You can choose from pastel shades to quirky designs matching your outfit. If you have a love for unique motifs, you definitely need to get your hand on these.
The next most important thing you can’t afford to miss is a bottle of pocket sanitizer. They might be staged at almost every public place, but it’s always important to keep a personal bottle to reduce the chances of spreading the virus. Keeping your hygiene in check, Bath & Body Works comes with two different variants of hand gel. Most sanitizers make skin dry and chipped, leaving you annoyed and itchy. Infused with soothing fragrance, Bath & Body Works sanitizer won’t just protect you from viruses but also nourish your hands on-the-go.
When you go on a trip, you can’t avoid using public property, leading to the spread of germs and bacteria. But if you carry a surface disinfectant, you can wipe the surroundings, making it clean to sit. Be it sitting on a chair, or eating a meal at a public restaurant, a surface disinfectant often comes in handy. Having a strong formula to kill germs, Savlon’s surface disinfectant is all you need. Be it a virus, bacteria, or molds & fungi, you can go anywhere carelessly if you have a tiny bottle in your backpack. And it’s #1 in the Disinfectant Sprays and Liquid category on Amazon. So why don’t you get your hands on it?
With an increase in the levels of pollution, face wipes have become an essential part of our life. To keep your face refreshed and hydrated throughout the journey, you must keep a packet of face wipes with you. And if you have acne-prone skin, you surely need to get your hands on this. Kaya Youth’s Oxy-infusion face wipes are suitable for all skin types, adding a bit more freshness and adventure to your day.
A towel is a bit too personal bathing essential. During the tough times of the pandemic, you can’t neglect the hygiene factor and use a towel provided by the place you’re staying at. While buying a towel, don’t forget to buy the one in cotton, as it folds easily, giving you plenty of space to adjust other essentials. With Pure Home + Living’s combed cotton towel, you get a variety of color options to choose from. Also, it’s quite soft and easy to fold in your small backpack.
If you are going for an adventurous sport such as hiking or trekking, make sure to pack some good quality runners or sports sneakers. It’s always good to wear the most comfortable walking shoes to save your day. Khadim’s collection of sports sneakers is great for the times when you don’t want to spend too much money. With dirt-cheap prices, Khadim’s footwear comes in many different sizes and colors, giving you a variety of options.
Small cravings come at the weirdest of times. And what could be better than popping a handful of nuts and dry fruits to curb the immediate hunger pangs? They are one of the healthiest ways to keep you active throughout the day without hogging on junk snacks. To satiate your cravings, snag a packet of dried berries from the assorted collection of berries, nuts, dry fruits, and whatnot by Wonderland Foods. From dried berries including Cranberries, Kiwi, Mango, Blueberries, etc. to an assortment of nuts such as walnuts, cashews, almonds, etc. you will get superior quality of food by them.
Who doesn’t love sunglasses, particularly when you actually have a reason to flaunt them off. Maybe a pair of aviators are perfect for a day at a shorefront. Or maybe a pair of wayfarers are perfect for when you are ready to hit a swanky place! And, if you are someone who wears contact lenses, carrying sunglasses while traveling has to be on the top of your list. To help you choose the best sunglasses, Sunglass Hut has a quality collection with some of the top leading brands. From Dolce Gabbana to Gucci to Rayban, you name it and they have it.
Keeping a bottle of fragrance is indeed important while traveling. A good fragrance uplifts your mood every time. While there have been perfumes containing paraben and other harmful chemicals, there are a few having natural scents with the goodness of skin-nourishing agents. Lafz is one of those brands, offering our most favorite oud and attar based fragrances with an inexpensive price range. Ingredients such as dry hay, amber, oakmoss, etc. forming the base give you a unique scent.
A fine afternoon by the beach sounds perfect. But to make your summer vacays a little more instagrammable, complete your #OOTD with a causal cap. Are you looking for one but can’t find one? Drop by Celio to get premium quality caps and hats. From solid Gatsby caps to traditional Fedora hats, to classic Baseball caps, you will find each and everything on their brandstore.
We have tried to include each and every important thing. Stick to these essentials, and you are set to take a short trip this National Tourism Day. Also, don’t forget to practice social distancing to steer clear of the virus. Explore the beauty of nature, and be safe!