Paragon has its production unit in South India and 58% of the demand is generated in North India. This amounts to extensive shipping costs, sometimes as high as ₹87 per kilo. The regional utilization at the time was only 42%. The challenge was to develop an action plan to reduce shipping costs and reduce delivery time.
THE SOLUTION :
Onboarding local warehouses operated by marketplaces (FBM – fulfilled by the marketplace).
By implementing an effective regional utilization plan and working on a negotiated charge for pick and pack, the delivery time per order was lowered from an average of 7-10 Days on national to 3-5 days on regional. The cost per kilo was down from ₹87 to ₹46, a reduction of 47%.