Amazon-Kirana store partnerships pay off; fulfilment cost 10% lower each year
Amazonwas the first totie up with kirana stores, in 2014, to improve the quality of its logistics. This it managed through an alternative supply chain initiative called theI Have Space (IHS) Programme. With kirana stores employed to take care of last mile fulfilment the etailer expected to:
Overcome the high percentage of failed deliveries
Reduce delivery costs
Speed up delivery
Results of IHS
During the period from January to March, the total number of orders fulfilled by IHS reached 28 percent,claimsRedSeer Consulting. Back in 2016, during the first half, the total number of deliveries handled by 4,000 kirana stores all over India amounted to 15 percent. With 400 stores in the first half of 2014, only 1% deliveries were fulfilled by kiranas. By the initial half of 2015, it was 5% of orders, as Amazon’s network of kirana stores rose to 1,100.
Amazon interests kirana’s in tying up with it, through an attractive fee structure. Every order delivery attempted by a kirana store earns it Rs.20-25. Plus, these partners are guaranteed a minimum of Rs.2,000-8,000 per month. So, on an average these stores make about Rs.25,000 in revenue every month.