5 min read

Work in Process (WIP) Inventory – Concept and Formula Explained

January 26, 2021 by Srishti Arora - 5 min read

eCommerce inventory management is a complicated task. More often than not, if your inventory is not synced with your incoming orders, it can lead to huge blunders and spoil the customer experience due to delayed deliveries and incorrect orders.

Therefore, it is essential to understand each type of inventory and its significance in your e-commerce business. If you are a manufacturer, who makes their products and runs a D2C brand, it is essential to understand WIP or Work in Process inventory. This will help you know the production supply chain and how you can manage inventory better. 

What is WIP Inventory?

WIP or work in process inventory refers to the total cost of unfinished goods currently still in production. It is a common term used in the production and supply chain management of e-commerce businesses that manufacture their products.

If you have a WIP inventory, it is usually considered an asset. It consists of items that are yet to be finished and sold. It differs from finished goods as they are items that are ready to be sold as-is.

For example, if you run a craft store that sells handmade jewelry like earrings, necklaces, bracelets, etc., the WIP inventory would refer to the products that are still under production or assembled by your production team.

WIP inventory is a universal concept that applies to every business size consisting of large product manufacturing businesses or direct-to-consumer businesses that run on a small scale. 

What Does WIP Inventory Include?

Determining the cost of WIP inventory is slightly more complicated than the cost of finally finished goods. As there are many different components involved and many dynamic items, it can get slightly complicated. Here are a few of the terms and calculations you will need to know to determine the WIP inventory.

Beginning WIP Cost

The beginning WIP cost is usually the first step in determining the WIP inventory. It comprises the assets section in the previous accounting period. To determine and calculate the beginning WIP inventory, it is essential to decide on the ending WIP inventory of the last period. The ending WIP inventory is carried forward from the previous period to the new financial period. 

Manufacturing Cost

Manufacturing costs are the total costs associated with the manufacturing of the final finished product. This essentially includes the cost of raw materials, labor, and overhead costs. If other expenditures go into the production process, they will also be included in the manufacturing cost. 

If the WIP inventory is higher in the production process, then the manufacturing costs like raw materials and labor costs will be higher. This will eventually impact the final cost of the manufactured goods. 

The formula for manufacturing costs is as follows – 

Manufacturing Costs = Raw Materials + Direct Labor Costs + Manufacturing Overhead

Cost of Manufactured Goods

The third aspect of determining WIP inventory cost includes the cost of manufactured goods (COGM). COGM refers to the total costs required to manufacture a final product. You can calculate the COGM by summing the total manufacturing cost with the beginning WIP inventory costs. Finally, you will need to subtract the ending WIP inventory, which will give you the final cost of manufactured goods. The formula is as follows – 

COGM = Total Manufacturing Costs + Beginning WIP Inventory – Ending WIP Inventory

How to Calculate Work in Progress – Formula

Once you have all the data mentioned above with you and have calculated your manufacturing cost and COGM, you can determine how much WIP inventory you have. 

The formula for calculating WIP inventory is as follows – 

Ending WIP Inventory = Beginning WIP Inventory + Manufacturing Costs – COGM

Outsourcing Manufactured Goods & Importance of Calculating WIP Inventory

In today’s day and age, you need to have a superior delivery experience along with expedited delivery options. Therefore, it has become essential to outsource your eCommerce fulfillment operations to 3PL fulfillment centers. 

One such 3PL fulfillment company is Shiprocket Fulfillment. Shiprocket Fulfillment helps you deliver products quickly to customers by storing products in fulfillment centers located in significant cities across India. You not only deliver products 3X faster with Shiprocket Fulfillment, but you also save considerable amounts in the shipping costs. Along with that, you get exceptional fulfillment services and 99% accuracy in all of the operations. 

Suppose you are a seller who takes care of their in-house manufacturing. In that case, it is vital to keep track of your WIP inventory, as you will need to continually stay in touch with the numbers that you are sending to your fulfillment center’s warehouse. In case the numbers are not correct, your entire inventory can be mismatched, and you will have to pay a hefty price in the form of a negative customer experience. 

Hence, track your WIP inventory regularly to stay abreast of your inventory count. This will help you process orders faster.

Final Thoughts

WIP inventory is critical for the manufacturing and production supply chain. Make sure you keep a thorough track of it and maintain it to boost your eCommerce assets. For other fulfillment operations and end-to-end logistics and warehousing solutions, you have Shiprocket Fulfillment. 

Jan 26, 2021 by Srishti Arora

6 min read

What is Warehousing? Key Elements & Complete Guide

January 21, 2021 by Rashi Sood - 6 min read

A critical part of the supply chain, warehousing, is regulating and controlling different elements of the inventory. Warehousing ensures everything runs optimally – from managing inventory, maintaining equipment, tracking in and out of products to packing products, shipping orders, and implementing an apt warehousing management solution. You must have an idea of the elements of warehousing to understand more.

elements of warehousing

Although warehousing may seem like a complicated process, we will try to make it easier for your understanding in this article.

Warehousing: An Overview

The process of storing products until they are sold is called warehousing. In a warehouse, products are stored securely and safely in an organized way. They can be easily located or tracked. All the essential information related to them is stored – for how long they will be stored and how much quantity is in hand.

A startup or small business can easily store its products at home. A retail setup can store its products in a warehouse until they are moved to the retail store. However, in an eCommerce setup, the products are stored until an order is placed. Once the warehouse keeper receives an order, he packs and directly ships the product to the buyer.

Essential Components of Warehousing

elements of warehousing

It goes without saying that warehousing is the process of storing products before packing and shipping them or moving them to another location. The following are the functions of warehousing:

Shipment Hub

The warehouse becomes a shipping hub when the products are placed in it. When you receive an order, the products are shipped from the storage facility to the customers directly.

Assembly Line

If the manufacturer delivers the products in an unassembled form, the company allows areas in the warehouse to assemble products for the end consumer.

Rental Storage Space

If owning and maintaining a private warehouse is costly and too big for your business, you can consider renting some space in your warehouse to other businesses.

Elements of Warehousing

elements of warehousing

Warehousing is not just a place to store goods. It is an assembly line, fulfillment center, and much more. There are various elements of warehousing that can help you with the protection, storage, and transportation of products:

  • It acts as a storage system that offers storage space for goods and easy access.
  • Offers climate control to the goods that require a warmer or cooler environment.
  • Warehousing comes with inventory management software/solution that helps keep track of inventory in and out of the warehouse.
  • Sufficient and experienced staff to process orders in and out.
  • Warehousing solutions also offer transportation and moving equipment to transport and deliver goods to and from the warehouse.
  • It has ample security to keep the products safe and secure at all times.

How to Choose the Best Warehousing Solution?

elements of warehousing

Several considerations can help you choose the best warehousing solution. Be sure to think them through to find the best solution.

Storage Costs and Number of SKUs

Stock Keeping Units or SKUs help track the inventory you have in hand to sell. But you must calculate the storage fees and the space you will require in the warehouse to store your inventory. For example, you will require a place to store different sizes, colors, and styles for every item you sell. So, you will have to pay for additional storage space for each variation. If you have a few SKUs, storage will be less expensive for you. However, if you have 1000 products, it will be costlier.

Most fulfillment companies don’t work as standalone warehousing solutions. They wish to turn inventory by fulfilling orders quickly as and when they are placed. This means you also need to restock the inventory quickly to keep up with the demand and not get stuck paying high warehousing costs.

Business Seasonality

Seasonal variations in demand and supply can make storing and tracking inventory in a warehouse complicated. If you also have seasonal sales fluctuation, leasing out a dedicated space in the warehouse may be costly for you during the off-season or lead to space shortage during peak season. This is why a 3PL logistics supplier can be beneficial for your business.

Warehouse Location

The location of the warehouse depends on your needs. Suppose you wish to store products in bulk for a more extended period of time. In that case, you can consider warehousing at a facility located at a rural location near a transportation hub. On the other hand, if you wish to deliver products faster to your customers, you can store your products in a warehouse near your customer’s destination.

Warehouses located in urban areas deliver products to larger populations quickly and conveniently. This reduces RTO and helps meet customer expectations, as well. Besides, it also reduces shipping expenses and promotes repeat sales.

Different Warehouses to Store Inventory

As the business increases and grows, logistics and order fulfillment become more complex. To reduce shipping costs and optimize fulfillment operations, you can store your products in different warehouses situated at favorable conditions in terms of geography and size.

That said, you must have enough space to meet all your current as well as future needs. This will help prevent you from outgrowing the current warehouse.

To recognize your warehousing needs, you can pay attention to the sales trends to monitor when most of your orders are shipped and when you need more space. If you ship to different zones away from the warehouse, you will have to pay higher shipping costs. Besides, the products will take a longer time in transit. Having warehouses in different regions or areas near your customers can help you offer same-day or next-day delivery to your customers, and it will also reduce abandoned carts situations.

For example, Shiprocket has fulfillment centers in Delhi, Gurugram, Bengaluru, Kolkata, and Mumbai. This lets eCommerce retailers take advantage of different locations by distributing their inventory over the extensive geographic footprint.

Using different warehouses will require real-time visibility into your stock levels across different locations to make informed decisions. Also, ensure that you have enough products at all locations to meet all orders promptly.

Value-Added Services

In case you require additional services apart from traditional warehousing services like picking, packing, and shipping. It would help if you found a company that can handle all your requirements, like kitting, assembly, B2B orders, cross-docking, etc.


Warehousing is a complex task. It can be simplified by combining different strategies and implementing them aptly. Choosing the right solution can benefit your business, help you save money, and meet customer demands and expectations. You can also outsource to a third-party logistics company, like Shiprocket Fulfillment, to store your products and pack and ship them when you receive an order.

As said above, order fulfillment is a complicated task, and it plays a critical role in online business. If you wish to know more about the order fulfillment chain and know expert tips, download our eBook – A Complete Guide to Order Fulfillment.

Jan 21, 2021 by Rashi Sood

5 min read

Warehouse Order Picking Strategies for Guaranteed Success

January 19, 2021 by Nishtha Chawla - 5 min read

The COVID-19 pandemic dashed through the busy aisles of the world of commerce and changed it, not just for the worse, but also for the better. Overnight, we changed the way of doing business! For instance, eCommerce started witnessing eye-opening success, and the shift from offline to online began to come naturally to us. And let’s not forget that online sellers started witnessing an upsurge in order volume, hence, giving traction to third-party fulfillment centers and logistics facilities.

It is important to never forget that once you get an order from a customer, a series of events happen to ensure that it is delivered to their doorstep in a seamless fashion. And to enable a streamlined logistical experience, it is crucial to partner with an eCommerce fulfillment brand with the right tools and expertise. Hence, as an online retailer looking for the perfect warehousing model for their business, you must have a fair idea about the various warehouse picking procedures.

Types of Order Picking Procedures 

Discrete Order Picking 

This may be the simplest way to pick an order in a warehouse, as it requires a bit of a manual touch. The picker has to select and scan every order one-by-one, which entails higher accuracy. Do you know why? Because if the picker selects and scans the wrong product, the machine will alert him of the same, immediately. And this way of warehouse picking may be simple, but is also the most effective one of the lot. Fewer mistakes in locating the right product mean that you get to deliver the right product to your customer, implying a great level of satisfaction. Usually, this method of order picking works when the storage facility is small and the staff count is considerably low.

Batch Picking

One of the benefits of this method is the reduced travel time in the warehouse. Pickers and packers choose a batch of orders at the same time, one SKU at a time. For example, the warehouse receives multiple orders with the same SKU – it would be advantageous to opt for this procedure of order picking because the picker would only need to travel to a single location where the product with the same SKU is placed. This way, it would be easier to fill multiple orders at once, without having to travel around the floor. 

Zone Picking

This is also known as the ‘pick and pass’ method. Every storage facility is divided into different zones. Each zone is allotted to a picker, who must pick all the SKUs located in that zone, even if for multiple orders. In case, an order is decorated with SKUs that are present in different zones, the order is completed after it passes through each zone. 

This method of warehouse picking is effective in a large warehouse that receives a huge number of orders. Also, the chances of error decrease as each picker gets familiarised with their assigned zone. 

No wonder third-party warehousing is basking in the glory of high demand these days! Because it blesses your business with the power to provide streamlined order fulfillment experiences to your customers. 

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Cluster Picking 

In warehouse storage – a group of orders are pieced together into a cluster, for picking. This methodology allows the picker to process multiple orders at once. As opposed to batch picking, this method of order picking allows the warehouse executive to pick an assortment of SKUs for multiple orders. There are different ways to conduct this procedure – 

Pick to Cart 

The picker will make a single pass through the picking zone and drop the SKUs in the cart from the picking location, as per the provided orders. This helps to reduce travel time for the picker and increase productivity, hence reducing the chances of error. 

Vertical Lift Modules (Carousal Operations)

This mechanised way of warehouse picking involves a series of carriers whose mobility is powered by a motor. To pick an SKU, the picker may move this automated vertical rack forward or vertical. It’s an advanced way of picking an order because the picker doesn’t have to go to the SKU himself to retrieve it. 

Wave Picking

You’re looking at a way of picking orders that is somewhat similar to discrete picking but not quite there. Wave picking is all about coordinating with the different parts of the order fulfillment process like dispatch and transportation plans of a particular order. Orders are assembled and picked in batches at several specific times of the day (also known as ‘waves’). This helps to optimize the shipping operations and enhance the productivity of the picker, as well.

Shiprocket Fulfillment – Partner with this Efficient Army of Order Pickers Today! 

If you’re wondering why you have to sit through an article about the various methods of warehouse picking for frictionless order fulfillment, let us assure you that the above information is instrumental for someone who is looking to find assurance in a third-party warehousing model. There is an army of specialists waiting to process orders on your behalf and deliver them to your customers safely. For more information on the importance of partnering with dynamic warehousing services – you must click here to read extensively.

With Shiprocket Fulfillment – your business can easily accommodate a last-minute spike in order volume, get access to cutting-edge technology for effective order processing, avail speedy delivery, and reduce RTO. And all of this without having to pay for the first 30 days of storage! 

Because there’s one thing that the ongoing pandemic is teaching us right now – Work Smart, Not Hard! And what smarter than making use of cost-effective automated warehousing and order fulfillment solutions? We can’t think of a good alternative. Can you? 

Shiprocket Fulfillment features
Jan 19, 2021 by Nishtha Chawla

6 min read

All You Need to Know About the eCommerce Fulfillment Process

January 14, 2021 by Rashi Sood - 6 min read

Fulfillment is the process of preparing, packing, shipping, and delivering a customer’s order. While bigger businesses handle their fulfillment process themselves, several eCommerce sellers and smaller businesses outsource their order fulfillment process to 3PL service providers.

what is the fulfillment

What Is Fulfillment?

eCommerce fulfillment is the process where a seller completes the order by shipping and delivering the order to the customer. One always wants to streamline their logistics process and make their order fulfillment process smoother. To avoid unpleasant customer experiences, it is important to have an efficient order fulfillment process in place.

The Steps to Order Fulfillment

what are the steps to complete your fulfillment process

Receiving Inventory

eCommerce companies handle their inventory in two ways. A seller can receive and stock the inventory in-house or outsource the process to an eCommerce order fulfillment company. An eCommerce order fulfillment company can stock the inventory and perform the rest of the steps.

In case you opt to stock your inventory yourself, you will be responsible for taking stock, examining it, labelling it, and managing the inventory. If you choose to outsource the process, the order fulfillment supplier or partner will handle the process.

Storing Inventory

If you wish to warehouse the inventory yourself, you will have to fulfill a list of tasks. The first and foremost task is to place the inventory on the shelf and record what products come in and what goes out. Keeping an eye on this will help you ship your orders without any delay.

Order Processing

Businesses that outsource their order fulfillment process don’t need to take care of their order processing. They simply accept the order and pass it on to the order fulfillment company to take care of it.

For businesses that manage their inventory by themselves, this is where the order is picked from the shelf/warehouse, inspected for damages, packed, and labelled.

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Shipping the Order

Depending on the package’s size, weight, and requirements, the best shipping option is determined.

Handling Returns

For online buyers, the convenience to return sold items is a significant aspect of their purchase. To offer a flawless returning, replacing, and refunding process, you need to have a well-defined return policy that your buyers, as well as your staff, can easily understand. However, having this step automated can help you avoid unnecessary errors.

Order Fulfillment Process

what is the fulfillment

The process for eCommerce fulfillment is easy and straightforward. As discussed above, it comprises of receiving the order, processing it, and shipping it. Let’s take a look at the eCommerce fulfillment process in chronological order:

  1. Order is received – on the phone, online, or via email
  2. Order is generated in the inventory system
  3. Order is confirmed, and its confirmation is sent to the customer
  4. Order request is sent to the in-house or outsourced warehouse
  5. The warehouse keeper locates the order and picks it
  6. Order is packed, labelled, and prepared for shipping
  7. Order is shipped, and the customer is notified
  8. Order is delivered
  9. In case of a return, returns are handled
  10. Refund is granted, and inventory is updated

Types of Order Fulfillment Models

what is the fulfillment

There are three types of eCommerce order fulfillment models, and each one of them has its own merits:

  • Drop Shipping: drop shipping order fulfillment mode is the easiest one to implement. When you receive an order, you simply place an order with the supplier and provide them with the customer’s address—the drop-shipper ships the products straight to the customer on your behalf.
  • In-House Fulfillment: in this model, you complete all the steps in the fulfillment procedure internally and yourself. You need to invest in software and automation wherever necessary to make the operations easier.
  • Third-Party Fulfillment: outsourcing the fulfillment process is the right option if you don’t have enough resources to package, label, and store products locally. You can outsource the fulfillment process to a third-party company. This will also help you invest your time in promoting your business.

What Is a Warehousing Solution?

Warehousing and fulfillment centers are often used interchangeably. However, warehousing is a company that stores the products for some time. It is a large storage center that is designed to store products and inventory in bulk. It involves equipment like containers and forklifts, with shelves stacked with inventory in large quantities.

There are private warehouses in the market that primarily offer warehousing solutions to wholesale and retail companies. Some big companies have their own warehouses to store excess inventory, while small companies rent space in private warehouses.

Typically, leasing a warehouse is more cost-effective than owning and maintaining a warehouse. Notably, the pricing depends on the lease terms. Some small eCommerce sellers even store the inventory at their home until they outgrow the space.

Warehousing VS Fulfillment Centre

what is the fulfillment

Let’s now take a look at the difference between warehousing and fulfillment centers:

Short-Term VS Long-Term Storage

The main goal of the fulfillment center is to turn inventory quickly. Ideally, the inventory must not sit in a fulfillment center for long, or the business owner may have to pay higher warehousing fees. However, the sellers must also send enough inventory to the fulfillment center to ensure there are enough products to handle the shipment.

A warehouse stores products, whereas a fulfillment center meets customer expectations around shipping. This can be completed when retailers store inventory in a warehouse or fulfillment center that is located near the customers. It reduces shipping costs, transit time, and enhances customer satisfaction.


A warehouse is static and inactive. On the contrary, a fulfillment center has a continuous movement of products and has more complex operations. A third-party logistics provider offers a variety of order fulfillment services, including:

  • Receiving products
  • Generating pickup lists and picking products
  • Grouping and assembling items
  • Packing and labelling products
  • Shipping products
  • Managing returns

The main action that occurs in a warehouse is inventory in and out. Not a lot of additional services are offered.

Frequency of Pickups

An order fulfillment company can tie up with different shipping carriers. A fulfillment center fulfills direct-to-customer orders as soon as the orders are placed. A fulfillment center requires shipping carriers to pick the shipments on a daily basis. This ensures that the orders are delivered on time.

The Final Words

Managing inventory is critical for a business. With the help of a warehouse or an order fulfillment center, you can manage inventory, package products, and ship them efficiently. They can help a business keep its customers satisfied.

All things considered, a business owner needs to make a well-informed decision with regards to order fulfillment. It is crucial to figure out the right order fulfillment company to efficiently run the business and make more profits.

It makes more sense to outsource the order fulfillment to a team of experts. In fact, it is critical to leave everything at the hands of a 3PL company that is experienced in handling warehousing, maintaining inventory, packing, labeling, and shipping products.

Shiprocket Fulfillment features
Jan 14, 2021 by Rashi Sood

4 min read

The Importance of Safety Stock for your eCommerce Business

January 12, 2021 by Nishtha Chawla - 4 min read

Imagine one of the products on your catalog catches the eyes of your customer and shortly after, they realize that it is out of stock. What do you think will happen? It is highly likely that the customer will take the business to another retailer. Therefore, it is important for your online business to deck up on safety stock to avoid such an unpleasant scenario. 

What is Safety Stock – A Glimpse 

Storing an extra quantity of products in the warehouse to avoid an out-of-stock situation is called safety stock (also known as buffer stock) for your business. This particular feature helps to keep you in touch with the fluctuating demand for your products. 

Why is it Important for your Online Operations?

Ease of Order Fulfillment

Wouldn’t it be reassuring to have safety inventory stored in the warehouse? Because then you wouldn’t have to fret over having your customers see that out-of-stock sign on the website/online marketplace. And it can be really disappointing for the customer to see that sign because it entails that they won’t be able to purchase the product that caught their attention. Given the current competitive scenario in the eCommerce space, we are sure that your customer will move on to the next brand providing them with similar products. Clearly, this will be a case of losing out on business. Nevertheless, keeping safety stock can help you mitigate it in the best way possible. 

High Customer Satisfaction 

There’s no doubt that your customers will be happy with your brand if they find their favorite product in stock on the online store. And isn’t that the end goal of your business? By keeping sufficient safety stock inventory in the warehouse, you will ensure that you keep coming back for more. This will result in higher revenue and positive word of mouth among the community. 

Smooth Functioning of Supply Chain

Buffer stock is the level of stock that helps to ensure the smooth operations of your business’ supply chain. When you forecast the demand for the coming days/months and store the products accordingly in the storage hub, you’re automatically making sure that there’s no incompletion in the supply chain circuit. You wouldn’t have to wait to source more products in case there’s a spike in demand (or in case of an out-of-stock situation), and hence, this will lead to efficient eCommerce fulfillment for your business.

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Compensate In Case Of Inaccuracy in Demand Forecast

There could come a time when your business exceeds your expectations. What if your business receives more orders than what you’ve already predicted? If you already have the safety stock in place, rest assured you’ll be able to handle such inaccuracies in the demand forecast with ease. 

Mitigate Price Fluctuations for Increased Cost Efficiency

The market is uncertain. From an increase in the price of raw materials to the sudden introduction of government policies that might affect your business directly, you must ensure that the warehouse has enough safety stock level to keep you from such embittering scenarios. Moreover, it will help you enable cost efficiency in your business, at all times. 

Choose the Fulfillment Partner that Empowers You to Fulfill Last-Minute Order Spikes with Ease!

The vitality of storing safety stock for a successful business has been established. At the same time, it is also instrumental to partner with a third party fulfillment facility that helps you keep your customers happy and maximize your profits. Shiprocket Fulfillment is a warehousing automation and eCommerce fulfillment solution that can help you enable seamless doorstep delivery to keep your customers happy. Get the best of Shiprocket Fulfillment’s services that comprise speedy deliveries by 3X, free storage space for the first 30 days, no minimum lock-in period, the advantage of shipping products across 27,000+ pin codes PAN India, lower weight discrepancies, and more. You can avail all of these amazing benefits at a reduced shipping cost by up to 20%. 

For a successful business, the need of the hour is to forecast any store-related contingences and contain them with the help of sufficient safety stock. Pick the fulfillment partner that helps you do all of that and more so that your online business sees growth for years to come. 

Shiprocket Fulfillment features
Jan 12, 2021 by Nishtha Chawla

6 min read

Things to Keep in Mind When Outsourcing Apparel Fulfillment

January 7, 2021 by srfulfilment - 6 min read

According to a report by Redseer, the fashion market in India is growing at a CAGR of 11%, with online fashion growing the fastest at a CAGR of almost 32%. This indicates that the apparel and lifestyle industries in India are multiplying, and more and more D2C brands are entering the market. Customers today are also resorting to online shopping for apparel. 

With an ever-expanding internet population and active penetration of internet users across the country, it is essential to stay organized and systematic in your entire eCommerce approach if you want to stay ahead of your competition.

If you sell clothes, accessories, or similar products, you need to be extra cautious about your fulfillment operations so that you can fulfill orders on time. Today, with marketplaces like Myntra, Flipkart, Amazon, etc., investing in apparel, it is essential to deliver products seamlessly, so your service stands out. 

To do so, you need to tie up with 3PL fulfillment providers to ensure your reach is widespread and you can enhance your customer’s delivery experience. Here are a few things you must keep in mind when tying up with a 3PL fulfillment provider for your apparel business. 

Centralized Inventory Management

Centralized inventory management is essential for brands that sell apparel online. Since the fashion industry is ever-growing, it is evident that you will not be selling only from one platform. If you sell on multiple sales channels like your own website, marketplaces, social media, etc., you must have a central inventory management system for all your incoming orders. It helps to process orders faster and tracks inventory in a much more efficient manner. Ensure that your 3PL fulfillment provider has a centralized inventory management system for your business, and you can track inventory from any place. Since you are the one who has to send an inventory to the warehouse, it is necessary to have all the information and data around it. 

Pan-India Coverage

The next essential aspect of successfully running an apparel eCommerce business is delivery across the country. Most companies that fulfill orders themselves are not able to deliver within a few days to their customers. People these days don’t settle for standard shipping of 7-10 days. They want a delivery of the products within 3 to 4 days of ordering it. Most times, even that seems a long time. Therefore, it is vital to choose a 3PL provider that has fulfillment centers located across the country. This helps you store your products in different zones, and you can deliver faster to every pin code in the country.

Warehouse Management

The next thing you should look out for in your 3PL fulfillment provider is warehouse management. If the warehouses are not managed efficiently and the workflows are not defined, there is a high risk as the orders would not be processed systematically. Since apparel orders usually come in bulk or require a thorough check in terms of SKUs etc. A warehouse management system and a systematic process must be in place to ensure seamless order processing. 

Shipping & Distribution

It is essential that the 3PL fulfillment provider you tie-up with has a vast network of pin codes and multiple courier partners that can help ship your orders. If your 3PL fulfillment provider depends only on one courier partner, there is a chance that you might skip out on several orders because you cannot service them. As India’s internet penetration is increasing, orders are flowing in from all parts of the country. If you cannot deliver seamlessly, it is difficult for you to make a mark in the industry.

Packaging Solutions

3PL fulfillment providers must have varied packaging solutions for your business so you can associate specific SKUs with designated packaging. This will help you streamline the process, and you will be able to save on additional costs due to efficient packaging. Shiprocket Fulfillment uses packaging material provided by Shiprocket Packaging. This material is efficient and designed for durability. You can buy packaging material by Shiprocket packaging and deliver products in a tamper-proof package.

Accurate Weight Measurement

Several weight issues can arise when shipping apparel. Since these products are light and usually packed and flyers, etc., many times, the weight of these packages is mismeasured. This often leads to an undue rise in the discrepancy issues, and you are directed to pay a considerable amount to courier companies. Your 3PL fulfillment provider must measure your final package’s weight before shipping it to avoid such complications. In such cases, if there is any claim by the courier company, you do have a thorough record of fighting for your request.

Marketplace and Website Synchronization

Since you sell on several platforms, your 3PL fulfillment provider must offer you integration with different sales channels and marketplaces like Shopify, Magento, Amazon, etc. This will help you integrate all incoming orders into one place and improve order accuracy.

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Shiprocket Fulfillment – Your Solution to Seamless Apparel Fulfillment

Shiprocket Fulfillment is an end to end eCommerce warehousing and fulfillment solution for D2C brands in India. 

We have fulfillment centers located across the country Inn different locations, and you can store your inventory with us. But Shiprocket Fulfillment, you can provide your customers with faster delivery options like one day and two-day shipping and process orders at a reduced shipping cost. 

We have an automated weight management system in place that helps you lower weight discrepancies that come in by courier companies. You can easily outsource fulfillment for your business while we process and ship orders to your customer’s doorstep. 

Final Thoughts

The apparel and fashion industry in India is booming. Online fashion is the next big thing as people are now turning to digital alternatives for shopping for clothes. Now is the right time to turn to a 3PL fulfillment provider to make apparel fulfillment a much more simplified task for your business. Reach out to Shiprocket Fulfillment today and let us take care of order fulfillment for your business. 

Shiprocket Fulfillment
Jan 7, 2021 by srfulfilment

8 min read

Understanding the Pros and Cons of Fulfillment by Amazon (FBA)

January 5, 2021 by Srishti Arora - 8 min read

One of the significant challenges any seller faces is growing inventory. After a certain point, it is evident that you will need more space to store your products, or you will have to find a location somewhere else. What can you do in such cases?

We are all aware of the FBA model offered by Amazon. The Fulfillment by Amazon model is one of the most popular eCommerce fulfillment models provided by the marketplace as it reduces the order processing time and delivery speed. Over 66% of Amazon sellers opted for the FBA-only model for their e-commerce orders. 

But one question remains. What about the sellers who do not use Amazon for their sales, or is it the ideal model for all sellers using Amazon?

As an order fulfillment offering, Amazon FBA provides all the requirements that any seller looks for. But, the cost is slightly higher, and there are other shortcomings in the model. Let’s find out the benefits and disadvantages of this model. 

What is Amazon FBA

Amazon FBA refers to fulfillment by Amazon. It is one of the most advanced fulfillment networks offered by Amazon. 

With Fulfillment by Amazon (FBA), you store your inventory in Amazon’s fulfillment centers, and as you get incoming orders, Amazon packs and ships your orders to your customer’s delivery location. 

How does Amazon FBA Work?

Once you opt for Amazon FBA, you have to send your inventory to Amazon fulfillment centers. Once you receive an incoming order, Amazon takes care of the entire eCommerce fulfillment process. This involves the storage and warehousing of the product, picking, packaging, shipping, and returns management. Amazon assumes the whole responsibility of your inventory once you send it to the fulfillment center.

For using Amazon FBA services, you need to incur an FBA fee. This phase includes a referral fee (starts from 2% and varies by category), a closing fee that goes by the product price range, a shipping fee that begins at Rs.28 per item, and an FBA specific fee for the services offered. 

Let’s have a look at a few of the pros and cons of Amazon FBA.

Should You Use Amazon FBA?

Amazon FBA is an incredible opportunity for sellers willing to sell on Amazon only. If you want to sell your products on multiple marketplaces, you will need to arrange your own fulfillment solution.

Competition is fierce on the platform, which is why it might not be the best option for small and new businesses. However, when sellers use Amazon FBA, they receive the prime badge. This helps the seller build credibility and expand its reach to customers that prefer prime sellers over others. 

If you’re on the fence about using Amazon FBA, this article covers all the necessary information you need. Using Amazon FBA has its fair share of advantages and disadvantages. Consider your pros and cons and make a decision fit for your business.

Amazon FBA Or Self Fulfillment: Which Is Better?

Amazon FBA is a fantastic opportunity for online sellers to tap into the true potential of the eCommerce industry. However, like every coin has two sides, Amazon FBA has its downside. 

Which is why many sellers opt for self-fulfillment. For your online business, it is essential you choose and decide what fulfillment method works best and is the most profitable. Here are some key differences between Amazon FBA and self-fulfillment-

  • When you are self-fulfilling orders, you can sell and ship orders on Amazon as well as other marketplaces. However, under Amazon FBA, you can only fulfill orders from Amazon and not any other marketplaces.
  • Under Amazon FBA, once you receive an order, the picking, packaging, shipping, and return management is taken care of by Amazon. When you’re self-fulfilling orders, you are responsible for packing and processing every order.
  • With Amazon FBA, the warehousing of products and inventory management is Amazon’s responsibility. While, when self-fulfilling orders, the seller is responsible for organizing storage space and accounting for inventory.

Benefits of Amazon FBA


Amazon FBA is very convenient for any Amazon seller. It makes the process super easy as you do not need to worry about the entire order fulfillment process after you get an order. Amazon fulfillment centers are equipped with the best technology to fulfill orders and higher skill resources to ensure hundred percent accuracy. Amazon FBA also helps you reduce processing and shipping time. 

Amazon Prime

Sellers who opt for Amazon FBA access the Amazon prime tag that provides greater credibility to any seller. A large chunk of the Amazon user base uses Amazon prime. Therefore, this tag brings a lot of advantages to the seller’s marketplace store and product listings. 

Customer Service and Return

Amazon has an exemplar customer service team that can help resolve any customer query within record time. Opting for Amazon FBA gives the advantage of utilizing this customer service and return order management. Amazon handles customer queries promptly and deals with complaints while taking returns also. 

Unlimited Storage

If you look at it theoretically, Amazon Fulfillment gives you a chance to store unlimited products in their fulfillment centers. As orders are processed, you can keep sending more inventory to their centers without any capital investment for warehouse and inventory management

Disadvantages of Amazon FBA

No Multi-Channel Fulfillment

Amazon FBA does not offer multichannel fulfillment in India. If you are selling on multiple channels like your own website, the marketplace, social platforms, etc., you will have to arrange for your shipping and fulfillment for other channels. This comes as a significant blow for FBA users as they will have to invest twice to fulfill incoming orders. Amazon FBA is only suitable for sellers who use Amazon as their primary platform but not for other DTC sellers who utilize several different platforms for selling their products. 

Slightly Expensive

The storage and processing fee for Amazon fulfillment is slightly on the higher side as they charge you for several aspects and consider the shipping, storage, referral, and closing fee. This adds up to a considerable amount, and you need to have a particular number of orders to maintain this arrangement. 

Limited Pincode Coverage

Amazon shipping network is exceptionally experienced and resourceful; however, the pin code reach is not pan-India. They provide only a limited pin code reach where the process orders with a hundred percent accuracy. If the pin code reach is not included in the FBA offerings, you have to arrange for your delivery.

Lack of Inventory Tracking

Once you send your inventory to Amazon fulfillment centers, you need to rely on them for complete support, and there could be a lack of inventory tracking that could often lead to the accumulation of dead stock. This is harmful to your business as you need to pay extra for maintaining the stock.

No Company Branding

Amazon FBA ships its orders under the Amazon packaging and branding. This can also lead to a loss of your brand name. For someone looking to grow their indigenous label and develop a brand name among your target audience, you must utilize your product packaging and shipping to impact your customer. With Amazon FBA, it can get challenging to achieve this.

Extensive Preparation

Before you ship your products to the Amazon fulfillment centers, you need to carry out a certain amount of preparation for your products. This can get time-consuming and expensive for several sellers. 

Amazon FBA Alternatives – Shiprocket Fulfillment

So what can you do if you are not selling on Amazon or if you want to fulfill multi-channel orders? You always have the option of outsourcing your inventory to 3PL fulfillment providers like Shiprocket Fulfillment. 

Providers like full Shiprocket fulfillment give you all the facilities that an Amazon fulfillment center provides. You can fulfill orders with our advantageous services and experience a broader reach across India. 

Shiprocket fulfillment offers you fulfillment centers across different locations in India so you can store products closer to your customers and fulfill orders 3X faster. 

Not just this, with state-of-the-art fulfillment capabilities, our fulfillment centers are equipped with the latest technologies to help you reduce weight discrepancies and also reduce shipping costs by a large margin.

Head to fulfillment.shiprocket.in to connect with a fulfillment expert today! 

Final Thoughts

Amazon FBA is a pioneer when we talk about e-commerce fulfillment in India. However, it is not the only solution to help you achieve this goal of seamless and hassle-free fulfillment. Tie-up with 3PL fulfillment providers with Shiprocket Fulfillment so you can get Amazon FBA-like services at reasonable rates and with more features.

Jan 5, 2021 by Srishti Arora

5 min read

The Concept of Inventory Forecasting Explained

December 31, 2020 by Srishti Arora - 5 min read

One out of three businesses has missed a shipment deadline because they’ve sold an item that wasn’t in stock. This is the outcome of poor inventory planning and stocking. Such situations are the nightmare of any eCommerce business. That is why it is essential to have the right data to predict the inventory you will require.

This is where inventory forecasting comes into play. With this article, let’s look at what inventory forecasting is and how it is essential for your business. Along with that, we will also look at how you can conduct it for the best results. Let’s dive in and get started. 

What is Inventory Forecasting?

Inventory forecasting refers to the process of calculating the inventory required to fulfill customer orders that are about to pour in in the future. This essentially means that you will predict the sales and stock up inventory accordingly. This calculation accounts for historical sales data, promotions, external forces that need to be accurate as possible to give you a specific prediction. 

Now, let’s have a look at the benefits of inventory forecasting for your business. 

Benefits of Inventory Forecasting

Inventory Estimation

The primary advantage of inventory forecasting is inventory estimation. It tells you the right amount of inventory to purchase. If you do not get a correct estimate of the inventory required, you might store products in bulk in your warehouse, which will eventually lead to debt stock accumulation. This will be too harsh for your inventory carrying cost, and you will have to pay extra for maintaining this inventory or getting rid of it. With inventory estimation due to inventory forecasting, you can help your cash flow and even reallocate resources for other business areas. 

Avoid Stock Outs

The next advantage of inventory forecasting is avoiding stockouts. Once you have a precise prediction about the sales you are going to make, you do not have to go through the trauma of an out-of-stock order listed on your website. You can optimize your sales of the existing items without dealing with additional stock or lesser stock. You can also delve further into your marketing campaigns and optimize them channel-wise based on the predictions and supplies you have.

Reduces Overhead Expenses

As you have a correct estimate and forecast your sales and the required inventory, you will save up on many overhead expenses required to manage additional inventory. This will also help you save up on labor and warehousing costs because you are better prepared to handle any changes and reduce manual labor. 

Efficient Production and Sourcing

Lastly, with inventory forecasting, you would be able to source inventory better and plan your production more systematically. As you know the production time, receiving times, and the amount of stock you need, you can plan well ahead and stay prepared for the sales.

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How is Inventory Forecasting Carried Out?

To forecast inventory, it is essential to know a few variables. Let’s have a look at what they are. 

Forecast period

The forecast period refers to the length of time that will be considered to determine the exact inventory quantities. The right forecast period will depend upon your manufacturing production cycle, turnover rate, and sell-out period. It is directly proportional to the time in which you exhaust your inventory. 


Trends referred to the change in demand over a fixed period. So you need to analyze your business’s sales trend and identify periods where sales will be high and low. This way, you can locate your peaks and forecast inventory for definite periods. 

Maximum Stock Level

Maximum stock level refers to the amount of inventory you can accommodate for a given SKU. This depends upon the inventory storage space and the funds you have. 

Reorder Point

Reorder point refers to the point at which your stock needs to be replenished. Once you sell your orders, the stock begins depleting. The reorder point is an indicator for you to stock up again.

The reorder point considers the manufacturer’s delivery time, the inventory turnaround time, and the safety stock available.

The reorder point is calculated with the formula that takes into account the reorder quantity for an SKU.

The reorder point formula is – 

Optimal Reorder Quantity for an SKU = Avg. Daily Units Sold x Avg. Lead Time

Best Practices for Inventory Forecasting

The best practices for inventory forecasting help you conduct this exercise efficiently. Here are a few best ways to get you started. 

Track Inventory in Real-Time

Always track inventory in real-time to have the correct number of SKUs in and out of stock. This will help you estimate your inventory better and faster and give you a more realistic number when forecasting inventory for the future. 

Use the Right Software

Using the right inventory management software will help you view the stock levels in real-time and accurately predict future demand. It also gives you several other insights like the most preferred product at which time of the year. Insights like these help you plan better, and you can also optimize your marketing campaigns and forecast inventory! 

Gather Insights

Gather insights from how you have made sales in your past quarters and years. This sales and inventory data can be beneficial in guiding you for your future decisions. With rich insights regarding sales, incoming orders, and order processing times, you can be proactive with your choices rather than reactive.


Inventory forecasting is very relevant for eCommerce businesses today. With the fast-paced nature of eCommerce businesses and the sudden rise in demand for online shopping, your business studies must be equipped with the stock levels. One mistake of an out-of-stock item being sold and delayed delivery can lead to a negative customer experience that can be quite harmful to your business. 

Shiprocket Fulfillment features
Dec 31, 2020 by Srishti Arora

7 min read

Types of Inventory Management System

December 24, 2020 by Rashi Sood - 7 min read

Maintaining a healthy supply chain is a challenging task that involves various processes for different industries. A reliable inventory management system must maintain the supply chain’s health and positively affect how the business operates. Which inventory management system is the best for your business? What are the best practices? How can you choose the best fit? Knowing the answers to these questions can be beneficial for your business.

In this blog, we shall discuss the inventory management system in detail and its types to help you make an informed decision.

What is an Inventory Management System?

An inventory management system is crucial for all businesses. It gives insight into the various aspects of the products and helps understand the customers. It is a tool that allows you to track goods across the entire supply chain and optimizes the whole supply chain – from order placement to order delivery. Notably, it maps the complete product journey.


Ramesh starts an online business selling food items. He has different suppliers who sell products in bulk. Some of these products must be split up and repackaged.

Ramesh creates an excel spreadsheet on a computer, and he updates it whenever he receives products, assembles them, and makes a sale. This excel spreadsheet is his inventory management system, and he is dependent on the same to know how much stock he has in hand. It also includes the expiry date and the number of products he can sell.

Why Do You Require an Inventory Management System?

inventory management system

All businesses require a system to track and control inventory. Without a proper system in place, you will have to work on an ad-hoc basis. And most of the time, you will be in a situation where you will be either overstocked or understocked. Inventory systems tell the component numbers and ingredients that you require to assemble the end-product. Without any relevant information, you may have excess stock or insufficient stock to meet your customers’ demands.

But when you choose an inventory management system, it is up to you which one you choose. There are different options that you can adopt, ranging from simple to comprehensive solutions.

Types of Inventory

inventory management system

While this blog majorly talks about the inventory management system types, it will be helpful to know the types of inventory. For example, a business operating in the medical sector must comply with different rules, regulations, and compliances than a company that sells apparel or fashion accessories. The clothing company has its own set of rules but nothing too stringent than storing and shipping medical supplies.

The following are a few inventory types that companies deal with:

Raw Materials

Raw materials are used in the manufacturing process. They are used to create finished products. What the raw material is for a company may be a finished product for another company. For example, a company creates components for machinery and equipment. For the company that manufactures it, it is a finished product. However, for a company that manufactures machinery or equipment, it is a raw material. Raw material can be anything, like paper, steel, nuts, bolts, wheels, chemicals, and other such items.

Work in Progress

Work-in-progress inventory is items that are currently being processed. WIP can include raw materials and components that are still in the manufacturing phase and yet to reach the finished product stage. This stage can also have finished products that are pending for inspection or quality control. Notably, the goods whose all steps are completed are considered as finished goods.

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Finished Goods

Finished goods are those which are ready for sale and to be used by the final customers.

MRO Goods

MRO is maintenance, repair, and operating supplies. MRO inventory consists of items that are necessary to operate, like machinery and equipment. Basically, MRO inventory is the inventory required for maintaining infrastructure. So, it can also include the products that are raw material, but in reality, they are spare parts.

For example, nuts and bolts. When a company has them in hand to assemble a finished product, they are classified as raw material. However, when a company keeps extra nuts and bolts in storage for possible future repair requirements, they are classified as MRO. Other such products that come under MRO include brooms, mops, packaging material, gloves, uniforms, and office supplies like pens, papers, writing pads, calculators, and printer ink.

Types of Inventory Management Systems

inventory management system

In order to remain ahead of the competition in the market, businesses need to know their inventory. Inventory management can use a variety of methods, but choosing the right method is critical for your business. Depending on the size and type of your business, you can choose between one or more of the following methods:

The Periodic Method

In the periodic method, the inventory data is uploaded after a certain point, usually after a year. Mostly smaller organizations employ this method as they can easily maintain records since they have smaller amounts of product. Physical counts are easy, and estimations tallying the cost-of-goods are not much complex. However, there are a few drawbacks of this method:

  • This method doesn’t provide any information related to the sold goods’ costs or ending inventory balance during the period where the count is not accounted for.
  • When a count doesn’t occur, the cost of the sold goods can’t be estimated. This may require adjustments when a complete count happens.
  • Obsolete inventory can’t be accounted for during the countless period. So, this will require adjustments when the count happens.

While there are a few drawbacks to this method, it works best for small companies that maintain minimum amounts of inventory.

The Perpetual Method

There’s a lot of difference between the periodic and perpetual methods. Here, the company continually updates its inventory records. The most significant advantage of this method is it keeps you up to date with the inventory’s physical count information. If the inventory counts are updated continually, the employees don’t continually check on stock levels. This saves time and money.

However, when considering the perpetual method, the companies must keep in mind the technology they require. Your company must have a strong inventory management system along with some sub-systems to make the method efficient. These technological inclusions have a number of benefits as well. However, there are a few drawbacks, such as:

  • This system relies on software and equipment. This can add a considerable sum to maintaining the business.
  • The systems require continuous updates, and this can be costly.
  • The recorded inventory does not necessarily reflect actual inventory, and this can lead to discrepancies.

The Barcode Method

Many inventory management systems have barcoding as a standard feature. This feature helps us organize and speed up all the tasks, boosting overall accuracy and efficiency. The employee has to scan the product in and out, and the inventory levels are updated automatically.

The following are some benefits of this method:

  • Automatic inventory updates
  • Optimized reporting
  • Speedy inventory counting
  • Fewer mistakes as manual entries are minimal

The Radio Frequency Identification Systems Method

RFID systems increase the accuracy from 63% to 95%. The readers scan items and the data is added to the inventory systems. The following are the drawbacks of the RFID system:

  • Expensive than a barcode system
  • This system suffers interference issues

The way a business manages its inventory makes all the difference in its business health and supply chain. Whether a business is small or big, a perfect inventory management strategy is required to keep products moving efficiently.

Shiprocket Fulfillment
Dec 24, 2020 by Rashi Sood

5 min read

eCommerce Order Fulfillment Trends To Look Out for In 2022

December 24, 2020 by srfulfilment - 5 min read

The eCommerce sector in India is growing at an exponential rate. According to a report by IBEF, India’s eCommerce sector will reach US$99 billion by 2024 from US$30 billion in 2019, expanding at a 27% CAGR, with grocery and fashion/apparel likely to be the critical drivers of incremental growth.

With the global pandemic and nationwide lockdown, the demand for eCommerce has grown by many folds. This has also led to the establishment of several warehouses and fulfillment centers that eCommerce companies are utilizing to fulfill eCommerce orders quicker. 

With the need for fulfillment centers in warehouses increasing, several advancements are happening inside them too. Let’s look at some of the trends that will shape the order fulfillment space in 2022.

eCommerce Order Fulfillment in India

According to a report, the warehousing and logistics sectors will grow by 35% in 2022. This indicates rapid growth in the industry, with various eCommerce players investing their money in elaborate infrastructure to fulfill eCommerce orders.

Along with that, sellers are also looking for storage options in large warehouses located in tier 2 and tier 3 markets to simplify the supply chain and deliver to her larger ground area. 

The warehousing market in India is expected to be worth INR 2821 Billion by 2024.

eCommerce companies, fast-moving consumer durables, fast-moving consumer goods, manufacturing industries, and 3PL fulfillment providers are the primary occupants of India’s warehousing spaces. This suggests that the trend for eCommerce fulfillment is only seeing upward growth in the coming years.

Let us look at some of the future eCommerce fulfillment trends that you can look out for in 2022. 

Order Fulfillment Trends to Watch Out For 

3PL Fulfillment Providers

The demand for fulfillment centers increases, and not every SMB and social seller can afford to invest in colossal capital infrastructure for warehouses. This is where 3PL fulfillment providers come into the picture. 3PL full payment providers manage all fulfillment operations starting from inventory management up to shipping and delivery. Since 3PL fulfillment providers are equipped with the latest technology required to fulfill orders quickly, eCommerce sellers reach out to them more than ever to outsource inventory and order management. 3PL fulfillment providers also have a vast distribution network across the country to ensure that orders are delivered faster. 

Shiprocket Fulfillment is one such 3PL fulfillment provider that helps you deliver orders 3X faster to customers and gives you an option to offer one day and today delivery. You can reduce your shipping costs and lower rate discrepancies by leveraging the technology we provide at our fulfillment centers located at prime locations across India. 

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Omnichannel Fulfillment 

The next big train to watch out for omnichannel fulfillment. The focus is shifting only from digital eCommerce to an all-round eCommerce offering that includes providing a consistent experience to buyers across different channels like brick and mortar stores, eCommerce websites, kiosks, etc. The concept of a centralized fulfillment channel is coming into the picture, and sellers are not opting for a centralized inventory order management system to process orders faster. This advancement enables you to process orders from all sales channels similarly, providing a consistent shopping experience to your buyer. 

As the faces of a brand are increasing and buyers are reaching out from all directions, sellers are looking for options that make the work easier and simplify their business’s fulfillment supply chain. 

Greater Use of Technology

The inclusion of technology in fulfillment centers is an up-and-coming trend in the warehousing and logistics industry. Technologies like artificial intelligence (AI) and machine learning (ML) are being implemented to simplify the fulfillment process tasks. By 2019, 37% of organizations had already implemented AI, and the numbers are only expected to grow. AI is primarily used to reduce manual and repetitive tasks in the supply chain, which reduces errors that can lead to a setback. 

Automation is the next big thing and can also lead to a more expedited process. Fulfillment centers use automation to simplify inventory management and collect data and real-time to synchronize and process incoming orders efficiently. This is an upcoming trend in the industry and is expected to catch more pace in 2022 as we see a rise in fulfillment centers across the country.

Internet of Things

Data is the goldmine of eCommerce, logistics, and order fulfillment. Rich insights and data are being used to develop and implement IoT (Internet of Things) technologies to monitor their inventory. Technology, like big data, is also being used to centralize the entire process and automate operations. 


With many ecological changes happening daily, another notable trend that is catching up in supply chain management and fulfillment operations is sustainability. Brands are now looking to become more cost-effective and environmentally friendly to minimize the environment’s effect and adopt more eco-friendly strategies to run their business. As consumer trends are also changing, and the newer generation is looking for sustainable products, brands are also changing their approach to match the demand and move to a more sustainable supply chain


Order fulfillment is growing into a much bigger industry. Trends are anticipated to become more significant in the future. We hope that these trends give you an insight into what you can expect in the coming year and how you can optimize your fulfillment process to match the industry trends.

Shiprocket Fulfillment
Dec 24, 2020 by srfulfilment

6 min read

Importance of Warehousing for Your Business

December 22, 2020 by Rashi Sood - 6 min read

Warehousing is the process of storing goods safely and securely. It has become one of the pre-requisite requirements for most businesses, whether operating online or offline. However, warehousing is not only limited to storing goods in a safe environment. It also involves keeping track of inventory, increasing order accuracy, and executing quicker shipping.

importance of warehousing

While many may see it as an expense, warehousing can significantly boost productivity and save money as well. The customer journey is not limited to just placing an order, but it ends when customers receive their order. In this sense, a warehouse gives better control over the inventory and ensures customers receive products on time.

Basics of Warehousing

  • Inbound: as the warehouse keeper receives the products, he checks-in and logs the products. He puts the products in the correct bins for their easy packaging and dispatching. This is also known as cross-docking.
  • Layout and Slotting: products that move fast should be kept in the front. Products that are generally brought together should be kept together or close to each other. Also, products that are often mistaken should be kept separately.
  • Picking and Packing: the journey time between receiving an order and shipping can be minimized if the pickers can find products conveniently. Besides, orders can also be aptly packed with an accurate address slip and delivery manifest for dispatching products.
  • Shipping: warehousing helps in shipping the orders on time. It helps keep the products at the right time in the right vehicle and with the correct delivery address.
  • Product Returns: the returned goods are first unloaded from the vehicle. The goods are checked off against the original order, and the information is reflected in the business owner’s account.

Types of Warehouses

importance of warehousing

There are three types of warehouses:

  • Public Warehouse: public warehouses offer storage facilities to small and big businesses in exchange for a sum of money. It can be owned by an individual or a group of individuals. It works in accordance with government rules and regulations. Not all small businesses can afford warehouses because of huge capital investment. Therefore, they keep their products in public warehouses. The facilities are available 24×7 at a low cost.
  • Private Warehouse: as opposed to public warehouses, private warehouses are owned and maintained by a company. It is a company’s private warehouse where it keeps its products securely. Big companies with surplus money can afford to have private warehouses. They have different warehouses across different cities of the country to manage their shipping.
  • Bonded Warehouse: this is a government licensed warehouse used to keep imported goods until their owner pays the customs duty. A bonded warehouse is generally located near ports that are operated under customs authority or government. It doesn’t provide products to the owner until the customs duty is paid.

Importance of Warehousing

importance of warehousing

Here are some of the top reasons why warehousing is important for your business.

Improves Order Processing

When buyers make a purchase, the sellers are often worried about the products’ timely delivery. Customers, too, are worried about the timely delivery of their product. Hence, excellent shipping and delivery services are crucial, and warehousing plays a vital role here.

Warehousing helps improve order processing. It helps avoid all the potential fulfillment issues by stocking the product securely. The products are available for packaging and shipping whenever an order is placed. So, you gather the products quickly and reduce potential delivery delays. In a nutshell, warehousing improves order accuracy and decreases all the delays in shipping.

Central Storage Location

If you keep all your products at a central location, it helps you decrease the gap between products and the customers. This means you can store, ship, and deliver products conveniently to save time.

You can choose a warehouse at a central location to quickly receive, store, and distribute products with much ease. Once the products are stored in a warehouse, the warehouse keeper’s responsibility is to handle the product shipment.

Once you ship all your products to the warehouse, they will sort the products and keep them on different shelves. Once the order is received, the products are grouped and packaged to ensure their completeness before they are shipped. Having products kept at a central location, the process takes lesser time, and the products are shipped faster.

You need to choose the location that makes sense for your operations and is closest to your customers. Also, choose the location that can be accessed by you and your staff at ease.

Increase Stock Visibility

Professional warehousing services help provide accurate inventory insights. They have an automatic inventory keeping application, which they utilize to track shipment and inventory data. Access to real-time data enables you to understand your inventory requirements and shipping operations.

Customer Satisfaction

The process of manufacturing a product and shipping can be complicated for businesses. But with the help of warehousing solutions, you can easily deliver the products in a timely fashion. Notably, timely delivery depends on the proper management of inventory and transportation and ensures customer satisfaction.

importance of warehousing

Additional Storage Space

You require additional storage space to store your extra products in the seasons or time-periods when you sell more. For this situation, you can get additional storage space from the warehouse. Besides, you also get safety and protection from robbery for your products. The warehouse is the best place to keep surplus products when you don’t need them immediately.

Better Inventory Management

Many small businesses don’t track their inventory. However, this can lead to late shipments, delayed order fulfillment, and, lastly, low customer satisfaction. The warehouse acts as a central location to keep all the products, track their movement, and manage the inventory. By investing in warehousing, you can store, ship, and distribute products efficiently.

If some of your products go out of stock, you will know about it right away, and you can offer alternative options to your customers rather than asking them to wait for days or weeks.

View Inventory Objectively

The inventory gives a sense of worth. But if you see excess merchandise that is not selling, it will be easy for you to determine what you can do about it. You can quickly discover what is not moving at all and mark it obsolete. Or maybe you can consider selling it at a cut-rate price.

If you offer lower prices, customers might start buying it. This alone can be a great initiative to sell the products off the shelves.

Leverage Seasonal Growth

With the warehousing facility, you can also scale your business when the season comes. As per your warehousing figures, you can determine the purchase trends, and accordingly, you can stock the inventory for seasonal sales. Besides, you can also save your inventory securely when your sales are low.

The Final Say

As a business owner, you get the choice to choose between private, public, or bonded warehouse. It is up to you to choose. But with the discussed importance of warehousing, it does only make sense that you start utilizing warehousing services to streamline your supply chain and boost business productivity.

Dec 22, 2020 by Rashi Sood