Any online business, big or small, needs to be aware of and equipped with a wide variety of e-Commerce shipping solutions in India to ensure optimum order fulfillment and good customer experience. Alongside, they also need shipping or logistics or courier aggregators that can help them in implementing the courier API integration and full-fill the customers order on time. That’s what we’re going to be discussing in this article.
This includes understanding what 3PL (3rd party logistics) service providers are, how to select the ideal shipping partner, when you need to reach out to multiple shipping partners, how to negotiate with them and engage with them in the long-run.
You’ll find that having knowledge of what logistics and shipping services are available can help you to actively reduce delivery exceptions and RTO percentage.
What are 3PLs?
3rd party logistics partners, better known as 3PLs, are basically companies that handle either overall or specified parts of end-to-end logistics management. This can include warehouse and inventory management, supply chain management, and distribution and shipping management.
When an order is placed on a merchant website, the work of an integrated 3PL begins. The order is created on their respective platform, airway bills and shipping labels are generated and then the order is assigned for pick-up. Some 3PLs maintain warehouses when inventory can be stocked. Others arrange for pick-ups from the e-commerce company’s warehouse.
3PLs handle transportation of the goods in the first mile, during in-transit storage, and in the last mile of delivery to customers. They also handle stuck shipments and failed deliveries, making multiple attempts for successful delivery, and provide reverse logistics. With the help of 3PLs, you can make use of streamlined logistics solutions, supported by advanced technological capabilities, to maximize your order fulfillment.
How to Choose the Best Shipping Partner for Your eCommerce Business in India?
Choosing a shipping partner for your eCommerce business is not always an easy task. With over 150 different shipping companies currently active in India, each providing their own range of specialized services for different prices, picking shipping partners is like looking for very specific strands of hay in a proverbial haystack. To make this task easier, there are 15 overarching criteria that should be considered when selecting a shipping partner. These include everything from serviceability to added services like customized packaging and cash-on-delivery, and finally to past-performance reviews. However, there are 4 standard criteria that every e-commerce business absolutely must think about prior to tying up with a shipping company. These are:
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First things first, any shipping partner must be able to fulfill the volume of orders you require within the locations and areas selected. In case the need arises, they may also need to provide you additional services for certain pin codes, like express or hyperlocal delivery or cash-on delivery.
Now that you know they deliver to the areas you need, you need to ensure that they offer you affordable rates for the volume of orders to be shipped. It’s also important to keep an eye on hidden costs like COD handling charges, labor fees and fuel surcharges. Determining these beforehand as well as your ideal rate to ensure profits are maintained can help you bargain for the most cost-effective prices.
It’s important to lay out clear terms and penalties in a service level agreement (SLA) before typing up with any shipping company. These include the shipping rate, including all hidden costs and bargains mentioned above, payment cycle (when you need to pay your shipping partner) and COD remittance cycles (from the company to you), among other things.
Visibility refers to your e-commerce business’s understanding of and access to technology. Making use of smart shipping APIs allows you to keep both your business and your customers updated on every step of the delivery process, by pulling real-time information and updates from the shipping partner website. For this, the shipping partner must be able to integrate via those APIs. Using tech-enabled solutions like shipping API integrations can improve transparency of deliveries to customers by ensuring they stay informed about their orders, enhancing their overall delivery experience and improving brand loyalty.
When Do You Need Multiple Shipping Partners?
In the initial phases of business, tying up with one courier partner is sufficient to fulfill a 100-300 orders per month. 10 orders daily can be handled relatively easily by a single shipping partner. However, once your monthly order volumes begin to grow upwards of 500+, you will start to feel a need for more shipping partners to help you handle the increased volumes. This can ensure that a single shipping partner isn’t overloaded with too many orders daily which will reduce the likelihood of delivery exceptions.
How to Negotiate With Shipping Partners
There are numerous steps to the process of negotiations, but we’ll be keeping it simple by giving you just a few tips.
- Create a shipping strategy. This encompasses your total order volume, delivery locations, expansion plans, viable shipping rates based on past cost, and basically everything to do with how your shipping experience has been till date and how you want it to be.
- Enter negotiations with a plan, but let them share their hand first. You add your terms on top of theirs.
- Project optimistically high volumes in your future plans, it will increase your likelihood of getting discounts. You can also bundle services together for cheaper rates.
- Have detailed penalty clauses for SLA breaches, to ensure that the shipping partner is held accountable for fake deliveries, an excessive number of delayed deliveries and other defined elements.
- Keep a strict time frame for completing negotiations and after the time frame ends, if no agreement is reached, be prepared to walk away.
Tying up with a shipping company, even multiple shipping companies is an ongoing process. It involves a series of calculated decisions, keeping in mind clear metrics and you are required to have absolute knowledge about the functioning of your business. Being informed and aware of what you need and how you can negotiate and communicate with shipping partners can not only enable you to lower costs and reduce losses but also to improve overall efficiency and profitability. Discussed above is everything you need to know about eCommerce shipping solutions in India to make an informed decision, whether it’s tying up with a new shipping partner or multiple shipping partners to get the best deal.