What needs to be remembered about cost of storage unit in e-commerce
Increasing the number of orders, expanding the product range, new sales channels, etc.. The business is growing and evolving on a daily basis. Almost everything can be a source of profit, which is certainly a reason to be happy.
Along with multiplying sales, one should also ensure product availability and retain a standard in the speed of customer services and shipping. And every single one of these elements is associated with cost of storage unit.
Logistics principles at an e-Commerce shop
When your business is large enough that you don’t want to or don’t have time to manage it all by yourself, and you are facing a decision whether to employ people or outsource activities, learn the rules that must be applied so that the customer is satisfied and your shop generates profit.
When making a purchase decision, customers usually pay attention to the price and the speed of processing an order, product availability and range, timeliness and low delivery costs.
Such activities should be made a standard in order for customers to return. What should the attention be paid to? Everything is associated with logistics.
All its characteristics are written under seven rules (7R):
- Right product
- Right quantity
- Right condition
- Right place
- Right time
- Right customer
- Right price
Optimising logistics processes
Proper customer services start when the order arrives in your system’s panel. To make sure that customers will return, they must be kept satisfied with your services at every stage of order processing.
What composes all logistics processes at an e-shop? Collecting orders from sales channels as well as their picking and preparing for shipping, creating transport documents, ordering carrier services, possible communication with the customer, shipping, analysis for assessing profitability of activities, managing returns and complaints, etc.. The list goes on.
Cost of storage unit that you have to keep in mind
All entrepreneurs naturally aim at increasing profit and optimising costs. This applies to every department at the company but it is the most visible in logistics.
What are the main costs generated by a warehouse? Everything depends on the industry and specifics of company operation. Nevertheless, in e-commerce, a large part of expenses is similar.
When planning sales, you have to remember such expenditure as:
- Lease of warehouse space or developing a warehouse and later costs of its maintenance – technical inspections, purchase of static equipment (racks, pallets, wrapping machines), maintenance of access routes and car park, purchase of mobile equipment (forklifts, transport means) and others, such as collectors and IT systems
- Servicing costs – to ensure safety, all equipment must be regularly inspected. This applies mainly to control and repair of racks, proper order of devices, illumination, etc.
- Media – bills have to be paid also at warehouse. Power, gas and heating – these costs may be high especially if you don’t own a warehouse that is adjusted to standard storage conditions or the goods stored in it should be kept in special conditions.
- Lease of equipment, removal of old equipment or consumables – some products may not be thrown out into standard waste bins.
- Other costs – costs related to goods and their storage – retaining smooth flow of resources, cost of product storage, expenses related to lack of product rotation or insufficient space for new products.
Particularly in the case of new companies, the business plan does not take into account all costs. Some aspects that may seem trivial at first, may later become a large burden in the company’s budget.
Hence, it is worth thinking about optimising and reducing cost of storage unit, right at the initial stage. Leverage the pricelist of our provided solutions and then you will be able to see how much cost of storage unit you can reduce.
BoxMe is the premier cross-border e-Commerce fulfillment network in South East Asia, enabling world-wide merchants to sell online into this region without needing to establish local presence. We are able to deliver our services by aggregating and operating an one-stop value chain of logistic professions including: International shipping, customs clearance, warehousing, connection to local marketplaces, pick and pack, last mile delivery, local payment collection and oversea remittance.
If you have any question about Boxme Asia or how we can support your business, please contact us directly by referring to our hotline. We are glad to be of service!