How to Save up on Logistics Costs

An oft-neglected area while planning an ecommerce business is logistics. Logistics is the actual process with which your product is stored, transported and delivered to your customers. So, while it is important to fiddle with your website UI to make it more engaging, and promote your venture online so that people shop on your website, it is also important that you sort out your logistics and keep checking up on those systems in regular intervals.

A typical company will spend around 5% to 50% of their costs on logistics and supply chain management, depending on the sector. The costs incurred on logistics are also some of the most volatile numbers that you will encounter. The main reason for this is that they are influenced by multiple factors, like the rising fuel prices, government policies, changing tariff laws, warehousing costs and in case of overseas shipping, international trade laws, etc. A typical overseas package will get delivered in about eight to ten days, while actually being in transit for only about 5% to 10% of the time. The rest of the time it will be sitting in a warehouse along with hundreds of other boxes, waiting to undergo security and customs checks, loading and offloading and other paperwork.

So how to make your logistics more efficient on the pocket? Here are a few tips that can help.

Tips to Cut Down on Logistics Costs

  1. Understand Your Supply Chain

The first step to cutting down logistics costs is to poke around under the hood and thoroughly understand your supply chain. If you are an online retailer, start from the point when you purchase your goods. These goods are then transported to your warehouse. Once an order arrives, the product must be packed, tagged and handed over to your logistics provider.

Most large online marketplaces offer their own logistics services if you sign up with them, but for your standalone website, you have to make an effort to find a trustworthy shipping partner. We previously made a comprehensive list of shipping partners, along with their pros and cons, which would be helpful here. Once your product is deployed, it lands first and foremost in your shipping partner’s warehouse. Here it is sorted according to its destination zone, and shipped off.

Then begins its journey, replete with pit stops and sorting, until at last it is delivered to your customer’s doorstep. Of course, the details of every product’s journey vary, but this is a general gist. Understand the true costs of shipping your product as it passes through these phases and check for bottlenecks.

  1. Warehouse Efficiency

Warehouse efficiency is a pillar of good supply chain management. We previously wrote about why you should be conducting a weekly audit for your warehouse. An efficient warehouse means that you can locate, tag and ship your product off in the least amount of time. You need to test the warehouse to see if there is wastage of space, whether products are stored in a way that they are easy to access, whether there is a virtual record of all the products moving through the warehouse and whether the packing and tagging processes are fast enough. Be on guard to find a few bottlenecks and sort them out.

  1. Use an Inventory Management System

You can save a lot of time and money by using an inventory management system to do the grunt work for you. An inventory management system is essentially a service that helps you manage multiple aspects of your job as an online retailer. All your inventory and orders are saved online, which means it is easy for you to track them down. Your customers are provided with automated emails informing them of the status of their package. Spending a little on an inventory management system ensures that you save up by making your transactions and logistics highly efficient. Try to automate as many processes as you can.

  1. Consider Having Multiple Shipping Partners

Thoroughly compare the shipping costs of various shipping partners. You don’t have to choose one and stick with them. Instead, you can sign up with multiple partners depending upon their efficiency, reliability and cost effectiveness in different geographic zones. A particular shipping company may have a better reach, or higher efficiency in a particular geographic area. Why deprive yourself of this benefit? Similarly, if you have multiple suppliers from a particular geographic area, don’t hesitate to consolidate.

  1. Reverse Logistics

We repeatedly stress how important returns are for your business. Providing a free returns policy is a must in today’s world. But what about return shipping? Reverse Logistics, as it is known, must not be taken lightly. Talk to your shipping partner about reverse logistics and streamline the processes related to it using periodic audits and automation.

These are a few things you can do to make your logistics more cost efficient. To know more, just get in touch with Browntape. We are always happy to help!

Everything You Need to Know About Drop Shipping

Sales is an evolutionary entity, and evolution happens at a very fast paced rate with it. The subdivision of wholesale and retail, the emergence of catalogue based sales, the idea of malls, and finally that of selling online are things that have come up in less than the past hundred years.

Drop shipping is an alternative model to the now predominant model of wholesale-retail. It has its advantages and its risks, but it is worth it to look into the phenomenon and know something more about it. So in this article, we will try and answer some basic questions about drop shipping.

FAQ About Drop Shipping

What Exactly is Drop Shipping?

Drop shipping is an alternative model to sell products to your customers. The usual way it works is that a retailer buys a bunch of products from a wholesaler and keeps them in a warehouse. Customers then buy products directly from the retailer, who adds a profit markup for himself/herself, and the cycle continues.

Drop shipping, on the other hand, is when the retailer, instead of pre-buying from the wholesaler, just transfers customer orders and shipment details to the wholesaler, who then ships the goods to the customer. This model can be seen in many marketplaces today, like eBay and Amazon.

Of course, there are many ways with which drop shipping can work. A retailer may have a brick and mortar store with samples of products that can be ordered and shipped to the customer directly from the wholesaler, or the retailer may also have a website or an e-store to do the same job. Finally, the retailer becomes more of a middleman between wholesale and customer, and in essence, gets paid in commissions.

What are the Benefits of Drop Shipping?

Drop shipping has many advantages for online retailers. Some of them are:

  1. Elimination of up-front Inventory: You don’t have to handle and manage inventory, which saves a lot of time and money.
  2. Wider Product Selection: Since you don’t actually have to sell the products to the customers, you have a larger range of products that you can showcase.
  3. No Shipping: You don’t need to handle the shipping, which means you can grow geographically without constraints and not worry about things like packing, labelling and tracking products.
  4. Flexibility: Since you are just a middleman here, your job becomes highly flexible. You can scale through brands, categories and demographics without much strain to your operation.

What are the Risks of Drop Shipping?

Of course, drop shipping has its own share of risks. These are:

  1. Back-Ordering: What if you place an order to your wholesaler and the product is sold out? Since you are the customer’s only contact, it becomes your responsibility to deal with the situation.
  2. Product Returns and Shipping Mistakes: Again, since you are the middleman, the customer deals with you. And you have to handle issues that are beyond your control, like shipping or testing of the product. The wholesaler’s incompetence might cost you your reputation in these cases.
  3. No Control Over Inventory: You can only sell what your wholesaler has.

Who Should Drop Ship?

Drop shipping is generally better suited for retailers that sell niche products that either need to be made to order, or can be customized. Drop shipping popular wholesale items like iPods is an option, but you might end up making less profits on them as compared to retailers who stock the same product.

All in all, it’s good to know that drop shipping is out there. It can turn out to be a good plan for some, while not so much for others. You can also think about mixing up the two – drop shipping and stocking your warehouse, for example, you can drop ship only the products that are a pain to store and ship, etc. For more information get in touch with Browntape. We are always happy to help.

 

“Bylane e-commerce surprise” (Browntape in Times of India)

This is what Times of India had to say about us ..

Even as Laxmikant Parsekar’s government struggles to boost investment and create employment, a small yet innovative e-commerce start-up has shown the way, just meters away from the chief minister’s secretariat office.

A stroll along the empty streets of the Journalist’s colony in Porvorim leads you to Browntape. Ask around and you discover that the company’s three offices are actually residential houses. At the main spread the scene is typical—young faces, spartan furniture, a very active coffee machine, stacked packets of instant noodles, and the soft hum of dozens of computers.

Browntape, the brainchild of Gurpreet Singh, Piyush Goel, and Ian Morgan, offers online retailers a platform to manage their e-commerce operations across multiple portals. Two types of services are on offer—one for established retailers who just need a tool to efficiently manage retail operations, the other an Enterprise Service Offering for retailers who don’t have the knowhow.

In the latter case, the client outsources the entire multichannel e-commerce to the company, which in turn creates accounts for the client across e-retail websites, builds catalogues, photographs products, and optimizes prices and sales, for which it charges a commission.

“We have quite a few clients in Goa who have been able to scale their e-commerce business,” says Singh, “The key thing is Goan entrepreneurs are selling all across India, are on an annualized run rate of multi-crore sales on e-commerce.”

The company to date has processed nearly 3 lakh orders of goods worth nearly $9 million. The platform boasts of 1,200-plus sellers.

So, how did Browntape take shape? In 2008, Goel and Morgan were in the UK, completing their PhDs in Artificial Intelligence. Short on cash and looking for a way to fund their bachelor lifestyles, they took to selling stuff online. When it became difficult to manage the ever-increasing orders and customers, they designed a programme to track orders and shipments. The tool, Scrobbld, gave birth to Browntape.

Singh, in the meantime, was in Goa, heading a web development team at a software company in Dona Paula; and like most who visit the state, was smitten. Fortuitously, Piyush joined his team. Itching to start something of their own, the two, along with Morgan, began to tinker with the idea of their own firm.

By April 2013, basic platform in place, they began touring the country, looking for funding. “The first couple of offers we got were more like traditional businesses where they (investors) would probably own more than half the business if they were investing,” recalls Goel. Singh throws light on the dilemma they contended with, “It is difficult to leave multi-crore offers on the table when you don’t have money to hire the next employee.”

That’s when they decided to enter GSF India’s Global Accelerator Program which is a 13-week intensive programme for internet-based start-ups. “GSF was more of an incubation kind of an investment and our first investor was Seedfund and with them K Ganesh joined,” says Singh.

Seedfund Advisors executive director Paula Mariwala says, “We basically liked the team; they had the technical knowhow as well as the passion, the drive to understand the nitty-gritty of e-commerce.”

Browntape’s choice of Goa, when tech start-ups usually head to Bengaluru, Hyderabad or Mumbai, was a worry. “We were very concerned whether they would get good employees in Goa, and initially we even put it in the clause that they would have to move to Mumbai if they wanted the funding,” says Mariwala.

Goel and Singh nod in unison on the misconstrued image most people from outside the state have of working in Goa equalling to soaking up some sun on the beach, beer in hand. “Luckily for Browntape, Goa doesn’t have a dearth of IT-savvy people,” says Mariwala, pointing out that 60 of the 100 employees are Goans. The rest “jumped at the chance to work in Goa”.

For the next few years, Browntape is looking to grow exponentially in a phase that Singh calls “land grab”—cornering a larger market share. Seedfund foresees revenue generation in the proximity of hundreds of crores. “E-commerce is definitely a hot field and there will be people eying them, so I am confident that there will be multiple acquisition or exit opportunities,” says Mariwala with a smile.

Better Order Management: The Secret to Your Success in Online Retail

Although the modes of retail have changed drastically over the years, the concept remains the same – the sale and purchase of goods or services from a business to an end-user. What once used to be chains of physical stores and multitudes of storehouses to provide for each of them is now steadily becoming online mega-stores, websites and apps. Transactions are happening at a much faster rate than they used to, as new markets keep being discovered. But a basic tenet of sales stands the test of time and technology: better order management results in better sales. Here we give you a few good reasons why you should drop everything else and start making your order management better.

How Better Order Management

Leads to Better Sales

1. It Helps You Deal with the Growing Number of Sales Channels

It is imperative that adding new sales channels in your arsenal means that your business is growing steadily. But new sales channels come with their own set of problems. New sales channels mean integrating them to the existing inventory, making sure that the warehouse is stocked to provide for the new customers, managing shipping through new sources and territories, etc. Having a multi-channel order management system goes a long way in integrating and managing your new sales channels. Even when your business grows to an extent that you are seriously contemplating a dedicated website or even a mobile site, an order management system will be your best friend while adding new sales channels.

2. It Drastically Reduces Errors in Shipping, Packing and Inventory

A growing business also means a growing amount of paperwork. Invoices need to be printed, shipping labels need to be organised and correct orders need to reach the customer in time. For a small sales channel or two, this can probably be done manually. But this will take you only a small way. After that, you need automated assistance to curb confusion, manual errors and oversights. An order management system automatically prints your correct invoices, takes care of shipping labels and updates and tracks inventory till the end of an individual sale process.

3. It Helps Avoid Overstocking and Under-stocking

A delicate balance connects a warehouse to the sales channel. A healthy warehouse is a ‘well oiled’ warehouse where products keep moving and getting replaced. Mistakes in inventory management lead to understocking and overstocking – case one where there is demand for the product but it is out of stock in the warehouse, and two where the product is eating up space in the warehouse but is unable to move because of lack of demand. Avoiding both cases requires stringent planning and foresight. With the data that is recorded with an order management system, the job of strategizing a bulk sales cycle becomes much more clinical and efficient, thus avoiding under-stocking and overstocking.

4. It Reduces Staffing Costs

Better order management, and employing an order management system reduces staffing costs. This is quite easy to understand – since an order management system is the virtual brain of your business, it takes care of various areas of operation like reception and recording or orders, transitioning them to the warehouse, updating and tracking inventory, managing customers through automated emails, printing shipping labels and invoices, etc. This means that instead of employing individuals or teams to handle these jobs, you can rely on a trusted order management system.

5. It is the Key to Customer Satisfaction

Like we said in the introduction, however evolved the modes of retail are than before, the key to success still remains customer satisfaction. Better order management results in a tight ship, where every order is taken care of with due diligence. A customer is kept informed of the status of his/her order throughout processing, and is never kept in the dark. Since the internal systems and links between the inventory and sales channels is strong, unpleasant situations like back ordering and out-of-stock don’t arise and the customer can be sure that their order reaches them in time. Result, the customer is satisfied.

To know more about better order management and other queries, get in touch with Browntape. We are India’s leading e-retail solution providers, and we are always happy to help.

Why Stock Count Audit Should be a Critical Part of Your Weekly Process

Auditing inventory is not the most exciting part of an online retailer’s life, but it is one of the most important. There is no doubt about the fact that accurate inventory is a cornerstone of the sales business. While moving hundreds and thousands of products every week, it is no wonder that one might fall into one of the many pitfalls that come with managing inventory. Failure to keep track of your stock accurately can lead to potentially embarrassing situations for your business and may also lead to much graver problems. In this post, we will tell you exactly why it is so important for you to do a stock count audit on a weekly basis and ensure that your warehouse is running like a well-oiled machine.

Why should you audit your stock

on a weekly basis?

1. Because it prevents items from going out-of-stock

The warehouse is a very busy place with complex mechanisms. It is usually delicately balanced between the extreme ends of supply and demand. The dominance of either end leads to a very unhealthy warehouse. Nobody wants to admit to their customers that the item they want to purchase is out-of-stock. Not only is this a mark of unprofessionalism, but it is also one sale lost. This is why the statistics of the warehouse should always be up-to-date and refreshed regularly.

2. Because it prevents overstocking

Then there is the other extreme – overstocking. Every product in storage is an expense, because you are spending a certain amount of money towards its storage. Ideally, products must keep moving through the warehouse, replaced by new ones. Being lethargic towards your weekly stock figures can lead to overstocking of products. One must especially keep an eye on the slow moving products and their shelf life.

3. Because it benefits your balance sheet

Everything you buy and sell has an asset value. It will appear on your balance sheet as a tangible profit or loss. If you are making a balance sheet on a weekly basis, to check the position of your investments on the go, it makes sense that you parallelly make a stock audit. Maintaining your inventory audit will thus lead to up to date accounting.

4. Because it minimises theft

You don’t want to audit your stock after three months only to realize that a few items are missing/stolen. These instances happen all the time in warehouses, and the most efficient way to minimize them, apart from a few handy security cameras, is regular stock audit.

5. Because it gives you a unique sales perspective

If you do have a great month, your balance sheets will reflect it. What they won’t reflect is the type of items sold and their popularity. Doing a weekly stock audit means that you will have information handy on which of your products are hitting popularity in the market in real time. This is a very agile way of doing business, which means that you can easily take a decision to push or pull products in the market for short periods of time based on your stock analysis, making the most of a sales boom.

6. Because it will help you on your yearly audit

Year-end audits tend to be painstaking procedures and the one thing that can make them simpler is your weekly stock audit reports. Now, instead of trying hard to tally SKU codes with sales reports, all you will need to do is collate your up-to-date weekly audit reports and tie them up with the yearly sales report. It is simple data confirmation as opposed to the more time consuming data entry.

For any doubts or queries, get in touch with Browntape. We are India’s leading multi-channel inventory management solution providers, and we are always happy to help!

How to Manage Your Offline and Online Stores Together.

Although with every passing year, the realization that one can not only survive, but also thrive solely on the basis of an online ecommerce business, is gaining impetus among online business owners, owning and operating a ‘real’, offline store still holds its own value. We have not (yet) entered a virtual age so drastic for offline stores to become obsolete, but at the same time, it has become an absolute prerogative for an offline store owner to have an online presence. So how does one go about merging the physical and virtual world together? The inner workings of the physical store and the virtual store differ drastically, though there are places where they coincide. To attain maximum efficiency out of your outfit, it is necessary that you carefully evaluate this online-offline relationship and lay down processes that bring out the best of both worlds.

Online and offline stores, both have their own place in the commercial market. It is important, as a first step, to recognize the advantages and limitations of both. A physical store is the traditional choice for a business operator. While a physical store gives you the opportunity to be able to actually ‘sell’ a product to your customer, it limits your geographical and demographical range while increasing your display and rental costs. An online store is more impersonal and extremely competitive, but this competition is negated by the fact that your target market size increases many fold, in the online world. Working with both online and offline stores requires a few adjustments to your business practices. Let us look at 3 major issues you can improve on to make your online-offline business a success.

Working Online-Offline Together

1. Synthesize Your Technology

You may have different philosophies for the basic functions of your online and offline stores, but in the end, they serve the same purpose – selling your product. So, even though you might want to segregate the day to day marketing and operational procedures for each, they should both stem from the same root. This root can be an interactive inventory management system like Browntape. In Browntape, you can list and treat your physical store along the same lines as your multiple online stores. All your sales, from all your channels, both offline and online, will reflect in your final tally. The inventory will come from one source for all your channels and the profits will be reflected in one column. Thus, it is better to treat the system like a tree with each channel, offline or online, as its branch. Here are a few ways with which you can integrate your online and offline channels using technology.

 

  • Listing all your stores, offline or online, on Browntape. Browntape recognizes both offline and online stores as channels, and funnels all the transactions from each into one database.

  • Combining mail order delivery for online and offline stores.

  • Issuing a common purchase order for online and offline stores.  

 

2. Bridge the Gap Between Offline and Online

A few years ago, the idea of online sales was in its inertia phase, with people preferring to see the goods they were buying. The situation has turned upside-down now. A typical customer prefers buying from the comfort of his/her home. We prefer to read the reviews of other customers, see the seller rating, discuss the product online and make impartial comparisons while buying a product. If the offline store has to survive in a situation like this, it has to make a few changes in its operation. The business owner can incorporate many of the above-stated features in his/her offline store to make a hybrid shopping experience for the customer. Other ways of bridging the gap are, allowing customers to pick up online orders from your offline store, letting customers scan the product QR code to read online reviews, etc.

3. Offline-Online Marketing

You can combine both your offline and online forums to compliment each other in terms of marketing strategy. By understanding the mechanics of offline and online marketing, you can make the most of your business. If, during the course of your analysis you realize that your online revenue stream is much larger than the offline one during a certain time period, you can employ methods like discounts or free gifts on online purchases and market them through your offline store. Another way is to give out offer codes on the next purchase only to the customers who visited the offline store. An important thing to do is collect the online details like email addresses of your offline customers too, and add them to your customer database. This way, a one-time, primarily offline customer becomes an online asset.

 

These were some tips on effectively managing your online and offline stores. For any queries or more information, get in touch with Browntape. We are leading manufacturers of multi channel inventory management systems, and we understand the Indian ecommerce market. Let’s make your online business a success!

 

5 Reports You Should Make Every Week as an Online Business Owner

Owning and operating an online business can be a hectic task. Especially when you start getting established and recognized as a trustworthy seller, the orders just seem to keep flowing in. It is therefore important to cultivate certain ‘good habits’ in terms of operating your business early on, so that they stick even when the business grows in scale, and one of the most important ones is making reports. We see many business owners being lethargic about making weekly reports about their business and that reflects upon their operations. Reports are a way to formally collate and store all the relevant information about your business which can be used for many things in the future. A good report can be utilized in many things – from market analysis and prediction to tax planning. This is why it is important for all online business owners to create and store a few key weekly reports. Here is more information about the 3 most important reports you should make as an online business owner.

The Absolutely Vital Weekly Reports You Have to Make

1. Sales Report

A sales report tells you the company’s sales statistics in a given period of time. It is one of the most important metrics for a business owner because it directly reflects whether the business is successful or unsuccessful. A sales manager can look at a sales report and identify market opportunities or areas where the sales volume can be increased. Since sales are generally seasonal and are dependent on holidays, festivals and special occasions, it is good to have week-to-week sales reports for the previous year handy, while planning for the current year. The prime metric that a sales report reflects during analysis is product demand. It is important to know whether the product you are selling in the market is relevant, and if so, what are the factors that contribute to its demand or lack of it. These questions are answered through a sales report.

2. Items Sold Report

Items sold report is simply a weekly list of items sold, arranged according to the quantity of each order. It is a different way of looking at the sales data, in the sense that the metric in focus in not the number of individual orders, but the number of individual items sold. This perspective unearths additional precious information about trending products and stock levels.

3. Stock and Inventory Reports

A stock report is the third most important report that a business owner will have to create. While the sales report talks about demand, the stock report is all about the supply. As a business owner, you must be adept in being able to quench the demand that the market has. This can only be done through a well stocked inventory. An inventory report tells you exactly where you are at the end of the week, and how far behind are you for the next week. You can then work on stocking up for the future based on the numbers acquired from the reports.

4. Manifest Reports

It is important to create individual manifest reports for every courier service that you employ. Each of these reports would then contain the weekly delivery details of orders assigned to that particular courier company. This is a good practice because it helps you keep a better watch on your products in transit.

5. Customers Report

Finally, customers report is filed to get information about your customers and create a database out of it. It is better if the database is designed in a way that it recognizes recurring customers and notifies you of the same. Having a contact list of all you customers goes a long way in online marketing. After all, with digital word-of-mouth, these customers are going to be your biggest advertisers.

These are some of the most important reports that you must file diligently every week. Of course, one can file additional reports like an Item Sales by Country/Region/etc. Report according to their discretion and needs. The key behind making and storing reports is that they must all function like clockwork – different reports complement each other and might exhibit similar information in novel ways. If you have any queries about reports or any other aspect of online business, get in touch with Browntape. We are India’s leading multi-channel inventory management system providers, and our experts are happy to help you in your journey to become a successful online seller.