E-commerce Logistics- 7 Steps to Get You Started

The pandemic proved that e-commerce is here to stay, and more than likely, it will continue growing. As logistic supply chains become more advanced, people are only going to continue shopping from their couches. If your business does not already have an online store and a supply chain established, you could be behind the curve. With the right approach setting up an e-commerce store and building efficient supply chains is not hard. This guide covers everything you need to know about setting up an e-commerce business.E-commerce is when you build an online or digital store where your customers and purchase your product. It is referred to as e-commerce because there of the lack physical storefront. Since items are shipped to customers after the purchase, e-commerce relies heavily on logistics. Just like in stores, customers do not like to wait. So, if you have an e-commerce business but suffer from a poor supply chain, your business will also struggle. Building a successful e-commerce business depends on also establishing efficient logistics. The following section covers everything you need to know about e-commerce logistics

What is e-commerce logistics? And how is it different from traditional logistics?

E-commerce logistics is more complex than mass distribution supply chains. Since its process is B2C or business to consumer, there is more information involved in the process. For example, you own an online store that sells shoes in 12 sizes and colours. When your customers make a purchase, they are also selecting size and colour. Then ship it to the correct address. In e-commerce logistics, the supply chain must get every piece of individualized information correct. Or your customer is receiving the wrong item.

In e-commerce, this process is called e-fulfilment. As orders come in, your warehouse or distribution centre will have all your inventory available. They will pick out the individual product your customer ordered and prepare it for shipment. As you can see by the process, it is called e-fulfilment because you are processing or fulfilling your business’s e-commerce orders. Many companies decided to outsource their e-fulfilment to logistics companies like Amazon, UPS, and FedEx. The decision is common because handling e-fulfilment in-house is challenging.

Unlike B2B bulk shipping, e-fulfilment has many moving individual parts. In bulk logistics, shipping companies usually collect the same product or products in massive quantities. Most often these large batches, orders are going to the same customer. Traditional logistics involves moving massive quantities of the same item to the destinations. For example, transporting hundreds of thousands of avocados to the United States from Mexico is traditional shipping.

In e-fulfilment, many more moving parts are involved. First, your online store’s system collects information like address, product type, and specs, name from the purchase. It then delivers this information to the fulfilment centre. At the fulfilment centre, the order is processed and handed over to the picking process. Picking involves a person walking the aisle of your distribution centre and finding the correct item for the order. Then the item is prepared for shipping and usually sent off that day. As you can imagine, there is a lot of room for human error in this process. The picker, or the person finding the correct item for the process ordered, can grab the wrong object. They could also pick the correct item but mix them up later down the line. Furthermore, the person who processes the shipping information could put the incorrect label on the wrong box. The human element in the e-fulfilment process is usually why many businesses outsource the process to logistic companies.

7 steps to get your e-commerce started

If you are a startup or even an established business, starting e-commerce isn’t challenging if you follow these seven steps. These take you through the entire process of establishing a strong e-commerce section of your business:

1. Demand Planning

There’s no telling how quickly an e-commerce business could grow. When starting yours, you should access historical sales data for your company. If you do not have access to historical sales data, use data detailing your site traffic and visitors as a starting point for your e-commerce demand. Seasonal trends are also something you should consider once your e-commerce is up and running. Depending on the type of product you are selling, you could experience an uptick in sales. For example, windbreakers will sell quicker in the spring and fall. Anticipating demand is crucial for starting e-commerce.

2. Generate visibility in your online store

Once your online store is up and running, you are going to want to generate visibility. Customers want to see the available products. Make sure to design your online store to show what is immediately in stock. As orders come in, you should actively update your online inventory.

3. Streamline your shipping process

You may decide to handle your fulfilment in-house. If you do, be sure you have a process and staff that can process the amount of demand you anticipate. If you expect a high demand, it may be wiser to use a fulfilment centre. Companies like UPS, Amazon, and FedEx all offer fulfilment services. You want to pick that option that ships your products the fastest and saves on costs. Finding a logistics partner can be difficult. However, there are some basic things a good partner should have, like technology to track orders, offer shipping deals like 2-day, have a warehouse to store inventory and work to cut shipping costs for you. Your e-commerce logistic partner should be a company you trust to handle your inventory and deliver it as quickly as possible to your customers.

4. When picking a logistics partner, pay close attention to the last mile

The last mile is the final stretch of delivery service before it reaches the customer, and it often accounts for almost 30% of all shipping costs. Customers will judge your business on delivery services, so you want to ensure this last mile is the most supported without breaking the bank. Your logistic partner should focus on timely and secure delivery while simultaneously trying to cut costs.

5. Automate where you can

Fulfilment centres and any partnership with a logistic company will be a significant cost. However, if you can automate any part of this service, you can save your business a lot of money, thus increasing your profits. Many logistic companies may offer automated services should you investigate. Asking around might yield a logistic company that utilizes robots for the fulfilment, saving you money.

6. Create an efficient process for returns

The reality of running an e-commerce business is that at some point, a shipping mistake will occur. Maintaining the relationship with the customer depends entirely on your return process. You want to make it as easy as possible for your customers to return an incorrect item. Many companies include a return label automatically in the first shipment. Or they easily email a label once the customer processes a return. Whatever your preferred method, make sure it makes it incredibly easy for a customer to ask and process a return. Bad return service can lead to a burned bridge between your business and the customer.

7. As your e-commerce business grows, prioritize free or 2-day shipping

You may not have the resources available to offer 2-day or free shipping when your e-commerce business is first starting, but you should prioritize getting to the point where you can offer it. More customers that shop online are seeking 2-day or free shipping, and the longer you wait to offer it, the more customers you will lose.

Logistics are critical to e-commerce

A significant amount goes into e-commerce. On the customer side, it may seem easy to buy something in an online store. However, what we don’t see is the number of moving parts supporting the supply chain. Without logistics, many e-commerce businesses would fail. Big players like Amazon and UPS thrive because they have perfected supply chains and fulfilment centres. If your goal is to start an e-commerce business from scratch or an addition to your physical storefronts, you must think about logistics.

Bottomline is e-commerce is the future and your business will need logistics

If your business wants to adapt and survive, you need to start investing in e-commerce. It is the way people want to shop now as they move away from physical storefronts. Since you need e-commerce to thrive in this new business world, you also need to invest in logistics. Whether that is in-house or through a partnership, creating a process that ensures your customers receive the right product quickly is the future of your business.

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