E-commerce or e-retailing is a form of business that depends upon a digital presence for connecting with customers and doing business.
The pandemic made companies realize they can have a robust online business without needing a physical store. Digitization made it possible to give a first-rate feel of the products virtually, so customers are comfortable purchasing online.
Suppose you can give them a bonus experience of faster shipping and uncomplicated returns. In that case, an e-retail business can work out great, owing to its ease and convenience.
Check out our blog to understand how to manage overflow inventory due to multiple returns.
The UAE e-commerce market is growing at an accelerated pace and is forecasted to reach a US $11782.3 million revenue by 2023.
The supportive environment in the country, where the government promotes all kinds of trading with business-friendly policies, encourages even SME enterprises to do business here.
The promising sectors in the e-commerce business in the UAE include fashion, electronics, beauty, and lifestyle. But the business's success depends not just on the brands and the products you offer your customers. The experience also matters.
Customers today do not like to wait. They expect quick and easy service from selecting, paying, and receiving their purchase. They also expect a smooth return or exchange for their product. Suppose one company cannot offer a satisfactory experience; plenty of others can provide better.
The speed with which the product reaches the customers matters in the success of an e-commerce company.
Distributed warehousing - What is it?
Distributed warehousing model is an approach where companies use multiple warehouses for carrying out their business.
The warehouses are strategically placed closer to their market. As you store the inventory closer to your customers, it is easier to deliver them faster. When customers have such high expectations from e-commerce deliveries, it only makes sense for companies to adopt the distributed warehouse model.
Although distributed warehousing appears expensive, the benefits outweigh the disadvantages when running your business through multiple smaller warehouses at different locations. Satisfied customers would mean more business for the company!
A centralized warehouse means the business has one inventory to store and manage all its goods. Some of the advantages include
1. One location to conduct entire operations
2. Easy to track the entire logistics
3. Outbound and inbound shipments are managed more efficiently
4. Personnel cost is lower, as only one warehouse exists.
But post-pandemic, consumers worldwide have turned online to purchase even everyday household essentials that they would have never even considered for online purchase.
But, as per research, the success of the eCommerce business is mainly dependent on the speed and accuracy of its deliveries. It is one reason the eCommerce giant Amazon came up with programs like Same day delivery and 2-Day deliveries to gain a competitive edge in the online marketplace.
Additionally, as per the research by Shopify on eCommerce trends, more than 80% of customers chose free shipping services. Thus, offering fast and free shipping is essential to customers' satisfaction, so they return for future purchases.
E-retailers do not have a marketplace with definite geographical boundaries as you deliver directly to customers. Suppose your shipment is far from your warehouse. Or there are disruptions in order fulfillment due to unforeseen circumstances in the supply chain. In such cases, shipping is going to have delays. Maintaining a same-day or even 2-day delivery for your orders may not be practical.
How will distributed warehousing benefit e-commerce?
Distributed warehousing involves multiple smaller inventories at various locations. The sites are based on customer demand, order trends, or even considering regional preferences. The warehouses keep a fixed stock of goods at places close to customers. Shipping of goods is faster, and at comparably lower prices, so it is possible to consider free shipping services to customers.
Keeping up with your customer
Compared to shipping from a single warehouse, as with centralized warehouses, distributed warehousing places stock closer to the customer. The customer does not have to keep waiting for his order to arrive.
Shorter Supply chain
When the shipments are closer to the customer, transportation costs are reduced. There is no need to consider expensive freight modes for faster deliveries in such cases.
Sustainability is the key
More and more businesses are moving towards sustainability. Distributed warehousing helps reduce carbon footprint due to a shorter supply chain, as there is less transportation required to reach the customer.
- Flexible warehousing solutions for distributed warehousing
Distributed warehousing has become a realistic concept in recent times due to modern on-demand warehousing solutions. It is no longer necessary that multiple warehouses need to be owned or leased by the business when you can opt for storage as a service. It becomes cost-effective, as you have to pay only for the area used and its use time. - Flexible warehousing solutions are excellent choices when it comes to distributed warehousing as
1. Warehouses are always available on demand.
2. Possible to Choose the warehouse closest to your customers.
3. Choice of multiple warehouses so you can choose one with the required facilities and nominal rent.
4. Pay for the space used only for as long as you use it.
5. You can scale up or down the warehouse space as per your requirement.
Cargoz offers flexible warehousing solutions across the UAE, making it easy to find storage facilities of different types in various emirates. In addition to this, we also provide warehouse management as a service, saving you time and money to manage your warehouse. - If you are considering distributed warehousing for your business, Cargoz can help you find a suitable space in your preferred emirate at the lowest possible cost.