I prefer using Labels over Folders at Zoho Mail strictly because of the visual segregation(different pane, colours, etc.). However, unlike the folders, which are very quick to use by simply dragging the message over to them, the labels require a number of actions to be used:
One could simply drag the message over to the label(compressing steps 1 and 2 into one) but the message still needs to be archived. This way the whole process requires 3 moves, as opposed to 1 move in folder management.
I propose that there will either be a dedicated "ARCHIVE" button in the reading pane as opposed to a dropdown menu, or the labels will function more like a folder - once you assign a label to a message it automatically gets archived. Once it's archived one will still be able to attach more labels to a message.(much like GMail does it these days)
Thank you for your great work. Zoho Mail is definitely an email provider of choice for me!