What is the Buffer?
Buffer refers to additional stocked products in a warehouse or a low-cost protective material wrapped around a product to nullify damages during transit. There are several buffer categories, such as buffer inventory, buffer stock, etc. Any product or material stocked or used to mitigate forecasted risks can be referred to as a buffer.
Significance of Buffer in an E-commerce Shipping and Delivery
Buffer helps a company to manage unforeseen risks and ensure the safety of a product during its transit. They are used in several areas in shipping and e-commerce.
- Reducing product damage: Buffer stock, like bubble wrap, is packed alongside a product. This packaging method decreases the chances of products sustaining damage during delivery.
- Risk management: Product misplacement is a common phenomenon in a delivery cycle. While there are processes to mitigate such instances, there are still situations where this happens. A buffer inventory allows shipping companies and sellers to compensate for such a threat with a new product and a low turnaround time.
Prerequisites of Buffer and How It Works
Buffer does not have any prerequisite as it is a process to mitigate risk. Buffers are currently considered essentials for every shipment due to the mentioned advantages.
- Buffer stock packing: Here, a low-cost material, such as bubble wrap, is packed with the product to increase its resistance to shocks—some freight companies add padding to the walls of their containers to gain a similar effect.
- Buffer inventory: Additional inventory shipped out and stored by a seller without getting an order.
Use Case with Buffer
Suppose a seller in Manila pre-stocks a warehouse near Davao city with 100 units of watches and another 100 units within a storage unit in Cebu City as buffer inventory. Buffer inventory protects your company from unexpected delays and changes in supply.