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Saving Cost in The D2C Business Model and How Delhivery Helps SMEs Achieve It

OCTOBER 14, 2021

When MamaEarth, a non-toxic skincare products company, started in December 2016 as a Direct to Consumer (D2C) business, they were up against FMCG giants like Johnson & Johnson, Procter & Gamble, Unilever, Himalaya, etc. Five years later, their unique positioning and greater connection with their customer base have helped them soar past the INR 100-crore mark with projections to become a 500-crore business by 2025.

For indigenous brands and global players entering the Indian market — across electronics, clothing, beauty, stationery, arts etc. — D2C has become an attractive channel. However, that doesn’t mean it’s easy or inexpensive to execute.

The logistics of shipping, packaging, warehousing, returns management etc., can be complex and expensive with traditional courier services.

Delhivery D2C simplifies that. In addition, Delhivery reduces the D2C logistics cost with robust shipping infrastructure and state-of-the-art technology. Here’s how.

#1 Delhivery improves unit economics

For a growing D2C business, it is critical to keep the cost of every unit low. Not only does it save costs overall, but it also has a significant impact on margins and profitability. By cost effective logistics, you can improve your unit economics, even at scale.

Delhivery competitive rates for our shipping and logistics services. So, whether you’re offering free shipping or charging your customers for it, you can keep your costs low.

We manage 80+ fulfilment centres across India and have an integrated warehousing system that ensures that every package takes the most efficient route possible. As a result, delivery times are improved significantly delivering shipping cost optimisation.

We operate temperature-controlled freights and take special care for delicate, large, or hazardous shipments. This reduces damages and saves overall logistics costs.

#2 Increases profit margins

To have a return on customer acquisition and retention investments, it is essential for businesses to have an in-depth understanding of their target audience. Delhivery enhances your customer knowledge by adding the logistics dimension to it: Who is buying what, how much does their shipping cost, which locations do most customers come from, what is the ROI on express shipping etc.

Based on this information, D2C businesses can optimise logistics expenses. For instance, if you learn that express shipping affects your top line, you can charge your customer for it or create loyalty programs or increase your prices.

#3 Lowers warehousing expenses

A fully equipped, temperature-controlled warehouse with 24x7 monitoring can be expensive for an early-stage D2C company. Moreover, when a D2C company has a centralised warehouse in one location, it would delay deliveries for customers located far away from it.

Delhivery solves these problems with our 80+ fulfilment centres. In addition to competitively priced shared-services warehousing, you can also effortlessly store your inventory across various locations closer to demand.

For instance, a Delhi-based company with significant demand in Bangalore and Chennai can have inventory in Delhivery’s local warehouses for low-cost express delivery.

#4 Optimises returns processing

Returns are inevitable in online businesses. But you can certainly minimise and manage them better. Delhivery ensures that in several ways.

Our Return to Origin (RTO) predictor leverages advanced AI techniques to help businesses identify the products that get returned frequently and customers who do so. This reduces returns..

Flexible slot-based delivery systems ensure First Day Delivery Success (FDDS), reducing returns due to the non-availability of customer or inability to find addresses.

Our reverse logistics system ensures that pick up from the end customer’s doorstep back to the business warehouse is done swiftly. This enables you to repurpose the inventory faster.

#5 Saving international shipping costs

Whether you’re selling to international customers or importing raw materials, Delhivery gets the best rates across air, sea, or land transport.

  • We also leverage our logistics analytics solutions to find the cost down strategy for you
  • We build the right combination of delivery methods to saves costs
  • Our global warehouses allow you to ship products in bulk, using the cost efficiencies of less-than-truckload (LTL) and full-truckload (FTL) models
  • It also offers near-location product inventory for key international markets, enabling low-cost local shipping

Save costs on your D2C logistics with Delhivery

At Delhivery, we are focused on achieving maximum logistics efficiency for our customers. An important goal in that endeavour is cost-efficiency. Through our e-commerce grade shipping services, warehousing, international connectivity and data science capabilities, we identify opportunities to save costs at every step of the way.

To see how we can save costs for your D2C business, speak to a consultant today.

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