What are the factors one needs to consider before expanding his business (warehouses) in multiple cities for B2B/B2C?
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Shweta Pandit
292 days Ago #1
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In pre-GST days, the number of warehouses ( stocking points) were largely driven by the tax structure of India. In post-GST scenario, it will change depending upon the company’s’ strategy and the trade-offs the company is willing to make in its supply chain. If the company doesn’t want to loose sales and is willing to keep inventory closer to the market for faster order fulfiment, it needs to have inventory at multiople locations which would increase the inventory carrying costs with better fulfilment rates. Alternatively, if the company wants to keep logistics costs lower, it might as well stock at few locations and fulfil over longer distances with the risk of not being able to fulfil orders on time, which eventually can result in customers walking away. However, it also depends upon how good is the company’s ability to forecast sales which is generally higher in B2B models and quite unpredicatble yet in B2C models