Case Study #2: Helping Reduce Overall Freight Costs with Multiple Shipments
In this case study, we'll share how our customer-centric approach has made a real difference for an e-commerce entrepreneur just like you.
Our friendly team always ready to assist you to our innovative solutions, discover why Proboxx is the partner you can rely on for success.
Proboxx helps customer save on their bottom line when it comes to logistics.
Challenge Faced:
A Proboxx client requested 250 cartons be delivered as fast as possible to FBA Centre of GYR3.
Box dimensions are 55*42*48 and 8 KG per box. Total volume is 27.8 CBM.
According to the client he only has 35 days of inventory left and he prefers to pay extra for fastest sea service to remain in stock.
Main question the client raised was that he has very low margin on the product due to aggressive competition that has been established due to Chinese sellers entering into the market.
So it was important to him to stay in stock in order to protect his BSR.
To give you some context:
The main issue Proboxx faced with this client request was how Proboxx can ship all the clients cartons on time to FBA while also reducing the overall logistics cost and keeping the goods in stock.
Proboxx's first question to the client was how many units does your 250 cartons contain and what is your sales velocity for the product.
The reason this question was raised, is that in many cases, clients are not even aware that they can create multiple PO’s for the same amount of cartons and ship as a different shipment method.
In our case here, in each carton has 6 units with overall 250 cartons * 6 units per box = 1500 units in total.
But, according to the client his current sales velocity is about 15 - 30 sales per day.
Meaning that 1500 units can last about 50 - 100 days approx.
Considering the transit time by the Super Express service to GYR3 is roughly about 25 days
from departure day to delivery, Proboxx suggested the following:
Solution:
Split the goods into 2 batches.
First batch, we can ship 100 cartons by Super express.
They arrive approx.. 30-35 days - including pick up/ loading and vessel departure from origin till goods arrive at destination at FBA.
Total units sent will be 600 in total. According to the client sales velocity, this should last for about 10 - 40 days approx.
Meanwhile, we send another batch of 150 cartons - 900 units using the Regular Service with a transit time of about 45 days - including pick up/ loading and vessel departure from origin till goods arrive at destination at FBA.
While the first batch is keeping him in stock, the second batch will enter into the FBA Centre and keep the inventory topped up so he won’t be out of stock at any stage.
Cost Reductions:
Based on rate level of $250 per CBM for Sea Express service to GYR3 and total volume of the shipment was 27.8 CBM, client needed to pay 27.8 CBM * $250 = $6950.
By splitting the goods into 2 batches, total cost for both batches was:
* Sea Express- 100 cartons / 11 CBM * $250 per CBM = $2772.
* Sea Regular - 150 cartons / 16.6 CBM * $120 per CBM = $1992.
Total cost for both batches to maintain goods in stock was $2772 + $1992 = $4764.
With a total saving of $2186!
Wow!
Our Client Feedback on this Case Study:
The Proboxx whole team are great! They are highly professional and have lots of patience and knowledge.
I have sent numerous shipments with them from different places, and I know I can trust them to ensure that my goods are safe and arrive quickly at their destination.
Conclusion:
Logistics is a field all Amazon sellers are trying to avoid and simply give the freight to their supplier to handle or to a freight forwarding company.
But, knowing logistics and understanding the barriers, regulations that are forced by carriers, by Amazon are critical; to avoid major delays, decreasing overall logistics cost and have a better efficiency all in order to stay in stock for constant sales flow.
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