The E-Commerce sector in India is increasing rapidly. Today, more than 950 million people are e-commerce users. The e-commerce market was valued at $92.7 billion in 2023 and is expected to be $259 billion by 2032.
Imagine you are running an ecommerce business. You develop a product, research its target audience, stock the shelves, and list the product on the website. You will always think of offering products to a large customer base. Small businesses usually depend on self-fulfillment, which means they distribute their products. However, this method has limitations, such as the business investing a lot of money in transportation and storage.
Self-distribution can even restrict a business’s ability to reach new markets. A business may fail to deliver products to the customer at the right time. So, what should be your next step?
Finding the right distribution partner can increase customer satisfaction and make a business more profitable. Your e-commerce business can quickly enter new markets.
What Is A Distribution Partner?
A distribution partner is a third-party company that helps e-commerce companies distribute their products to end customers or from the factory to retail stores or warehouses. An e-commerce distribution partner also provides other facilities like marketing, shipping and logistics, order fulfillment, and reselling products.
In the B2B sector, a distribution partner’s primary function is to transfer products between warehouses, distribution centers, or physical retail locations. Simultaneously, the B2C sector’s main task is to distribute goods to customers promptly and adequately.
Difference Between Distribution Partner And Channel Partner
- Distribution partners focus on logistics and the physical movement of goods from one place to another. They handle warehouse and inventory management, as well as logistics and transportation. Distribution partners ensure that products are stored, managed, and delivered efficiently.
- Channel partners are involved more in sales and marketing. They interact with the customers directly.
- Distribution partners earn revenue through services associated with warehousing and transportation.
- Channel partners earn commissions based on sales performance.
- Distribution Partners work primarily on a logistical level, making sure products reach the preferred locations timely.
- Channel Partners engage on a sales level, and they directly influence businesses’ revenue by pushing products into the market.
When Do You Need A Distribution Company?
When You Are Not Able To Provide Fast Delivery
Whenever you sell your products on an e-commerce site, you need to ship them to various regions of India. Today, most customers expect to receive the products they ordered as soon as possible. A delay in shipping can lead to unhappy customers, who will not order products from that e-commerce site again.
Whenever you take care of your product distribution in various regions of India, you have to access numerous things. For example, you need to have multiple warehouses in considerable cities. It would help if you even contract with various logistics partners to deliver goods to the customers within time.
Building warehousing and managing transportation individually can be expensive for small-scale business owners. Partnerships with distribution companies can help small-scale business owners achieve fast shipping goals at low rates.
When You Need a Trusted Distribution Partner
Whenever you manage product distribution alone, then it’s quite common to make mistakes. A slight mistake can even cause a halt in the supply chain and can adversely affect your business. You should form a partnership with a good distribution company. They have years of experience that help them avoid common mistakes when distributing products. The Company uses advanced technology and automation to resolve all your issues in supply chain management.
When You Don’t Want to Compromise Delivery Standards
Are you observing that your customers are getting the wrong or damaged product? If so, then you have to consider a good distribution partner for your products. It will ensure good order accuracy and enhance customer satisfaction.
When You Have to Ship Products Internationally
Are you thinking of shipping your products internationally? If yes, it could be complicated as you may not know diverse rules and regulations. But a distribution partner can make your work easier. The Distribution Company can get the necessary permissions and obtain discount import duties to increase the profit of your business.
When You Need Additional Value-Added Services
The services provided by one distribution Company may differ from another. If you wish to access various features like customized packaging, order tracking, and ultrafast shipping, choose the distribution service provider accordingly. You may have to pay extra costs to use the value-added and customized services.
When You Cannot Handle Fluctuating Order Volume
Does your ecommerce order fulfillment frequently? If yes, then your warehouse storage, inventory, and manpower requirements will vary within a gap of a few months.
You may upgrade the entire facility when the customer order is at peak level. Simultaneously, the business has to bear holding warehouse costs when the customer order becomes low. So, the business is looking for a distribution partner that can provide scalable warehousing infrastructure.
5 Key Considerations Before Outsourcing E-commerce Distribution Company
Choosing the right e-commerce fulfillment and distribution services can take your business to the next level. Your products can reach new customers within the country and abroad. However, it would help if you considered a few factors before outsourcing an Ecommerce Distribution Company.
Fulfillment Reach
The distribution partner you choose should effectively ship products to multiple locations within the country and abroad. It should have a vast network of fulfillment centers where products can be pick and pack, and shipped. It’s better if the warehouse and fulfillment center is close to the customers as it can reduce transit time and lead to faster delivery.
Infrastructure And Technology
The two primary components of effective distribution are proper infrastructure and modern technology. Most businesses lack these two things as they must invest massive amounts of money. Well, in such cases, an effective distribution partner can help.
They usually have a good warehouse and distribution infrastructure for storing products. Simultaneously, they have access to advanced technology that can automate various e-commerce fulfillment processes like inventory management, live tracking, order management, and many more.
Reputation And Reliability
Check the reputation and reviews before partnering with a distribution provider Company. A good Distribution Company will have positive feedback and reviews. It should deliver products fast and flawlessly to customers.
Scalable Warehouse and Logistics
The distribution partner should offer scalable fulfillment and warehousing services as your business grows. The Company should handle resources and accommodate products when the business grows.
Good Customer Experience
Delighting customers is one of the most challenging jobs for an e-commerce brand. Today, customers expect various things from an e-commerce brand, like fast and free shipping, good packaging, live order tracking, and many more. Managing all these tasks alone may be difficult for a business. Choose a good distribution partner that can meet the customer anticipations of every order.
Common Challenges In Distribution
Inventory Management
Inefficient inventory management is one of the biggest challenges in the distribution industry. Some businesses keep excess inventories to meet customer demands. Excess stock-up can lead to increased storage costs. Some products can become obsolete because they are stored for an extended period. Simultaneously, being out of stock can lead to dissatisfied customers and finally negatively impact brand reputation.
Logistics And Transport Issues
Delivering products promptly while controlling transportation costs is still a big challenge for the distribution industry. Vehicle availability, rise in fuel costs, bad weather, and heavy traffic are some factors that can cause delays in product delivery.
Why is AAJ Supply Chain Management the Best Choice For Fulfillment and Distribution partners?
AAJ Supply Chain Management is the best choice for order fulfillment and distribution partners for the following reasons.
- The Company manages various supply chain operations like a warehouse, last-mile delivery, transportation, and inventory management. This will allow a business to streamline all the logistics processes with one partner. It even reduces the complexity of contracting with multiple vendors.
- AAJ Supply chain management offers scalable warehouse solutions, which means it can accommodate products when your business expands in the future.
- AAJ SCM is equipped with advanced technology like an in-house WMS and TMS, data analytics, real-time tracking, and scanners. It increases accuracy and transparency in the supply chain management of a business.
- Multiple warehouses in India, such as Bangalore, Delhi, Mumbai, Hyderabad, etc, can make AAJ SCM the perfect choice for distribution to make a presence in multiple cities. That ensures fast and accurate distribution and timely delivery of products and improves customer satisfaction.
- With 18+ years of experience in managing complex logistics operations, AAJ is a reliable choice for your B2C and B2B Distributions.
Conclusion
Is your business growing, and can you not handle order volumes or face issues delivering products internationally? If so, choosing the right distribution partner can efficiently manage supply chain operations. It would help if you looked for a partner that offers scalable warehouse operations to support peak demands in a year. It should also be leveraged with modern technologies and have a good reputation.
AAJ Supply Chain Management
