Distributed Logistics for Digital Commerce Series, Article 4: Regional Inventory Visibility
Ecommerce marketers. What if I told you that you had a superpower? One you probably never heard of? And one your Ops guys would love to have but probably don’t know about?
It’s called “regional inventory visibility”. And believe me, it’s much more exciting that it sounds.
As marketers we understand the power of Amazon Prime and its one-and-two day guaranteed delivery program.
Walmart.com, eBay and other online marketplaces quickly followed Amazon’s lead and to offer their own programs. Now online shoppers expect fast, often free, shipping wherever they shop. Participating in these programs has become table stakes.
And the need to meet shopper expectations for fast delivery doesn’t just affect marketplace sellers. One study by Arvato showed that 24 percent of online shoppers would cancel their order if delivery estimates were not fast enough to meet their expectations.
The results of participating in marketplace accelerated delivery programs are dramatic: Amazon estimates that assigning the Prime badge to a SKU results in an average 52% lift in sales. Some studies have shown up at a 500% lift in other categories like perfume.
Basically there are two ways to participate in these programs:
- Amazon FBA. Solid, somewhat expensive and puts Amazon in control of your business. As recent events have shown, this became be a problem for some sellers when Amazon locked non-essential shipments out of FBA. FBA is a good alternative for the right products, but probably shouldn’t be your only option. And it’s pretty much limited to sales you make on Amazon, not sales made on your other marketplace channels.
- Do it yourself. Or have someone like a 3PL or fulfillment service do it for you. Here’s where it gets interesting.
Let’s say you have inventory in a distribution center in Salt Lake City. There is a geographic area around this DC where you can ship product profitability using two-day ground or other shipping options. In fact, you are probably already doing it.
So you need to create a “Shipping Template” that basically maps this area and communicates to Amazon and the other marketplaces that “for shoppers within this area, I want to participate in your guaranteed delivery program at this price. For shoppers outside this area, show my standard listing, price and shipping options.”
That’s where regional inventory visibility comes in – the process only works if you “know” you have inventory available in a location near the online shopper and then can communicate that to the channel so the channel can show the right listing based on your shipping template.
To learn more about using regional shipping templates and the four other requirements for participating in marketplace guaranteed delivery programs on a regional basis, read the rest of this article or watch the accompanying video on LinkedIn.