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As the E-commerce industry grows, Logistics for delivering orders to customers have become more difficult, especially in light of the new coronavirus’s impact on entire e-commerce supply chains.
Consumers don’t enjoy waiting, which is one thing that hasn’t changed in these uncertain times.
During the COVID-19 pandemic, we witnessed this directly as even Amazon prioritised the fulfilment of vital supplies solely, resulting in delays of up to a month for other products.
The communicated speed at which customers will receive their orders can make a difference in whether they choose to buy from your online business or a rival’s at a time when people are selecting online over in-store to conform to social distance practises.
However, building the e-commerce logistics infrastructure required to satisfy consumer needs on your own is difficult.
How can your company position itself to offer faster shipping without spending the time, money, and effort required to open several warehouses?
We’ll discuss the specifics of e-commerce logistics in this piece, including how it varies from brick and mortar retail, how to provide better delivery alternatives, and the reasons that e-commerce businesses now routinely outsource fulfilment logistics.
What Do Logistics Mean in Online Commerce?
E-commerce logistics is the practise of storing and transporting inventory for an online company or marketplace. The transportation of inventory from the manufacturer to the ultimate customer is the start of the e-commerce logistics process. Online purchase selecting, packing, and shipping are included here, along with inventories.
Millions of shipments cross the country every day, and systems must be in place to keep track of them and make sure they get there on time.
Digital fulfilment, which covers the following, is one of the most crucial elements of e-commerce logistics.
- Inventory control
- Storing and warehousing
- The choosing, packing, and shipping of orders is known as order fulfilment.
Maintaining the seamless operation of each of these components, each of which is a universe of complexity unto itself, is no easy undertaking.
Businesses must make sure that a distribution centre close to the customer’s location has sufficient stock levels. If they contract out fulfilment, their 3PL must be dependable and able to complete orders quickly, even during busy seasons and holidays.
Any breakdown in your retail supply chain’s communication or execution could harm customers’ experiences.
E-commerce or modern Logistics: five factors from cart to customer
The relationship between suppliers and merchants was comparatively straightforward thirty to forty years ago. E-commerce has expanded to be a global channel, and as a result, the incoming and outbound logistics operations have significantly increased in complexity. More intermediaries and moving pieces’ assist make sure that goods reach buyers nowadays. For business owners launching a B2B e-commerce channel, organising logistics operations is even more difficult because the journey is divided into two parts: from producers to retailers and from retailers to end users.
Those who have goods on hand and are prepared to ship it to a business location are suppliers or manufacturers. Once a purchase order is placed, they produce the goods and send them to logistics or fulfilment centres.
- Fulfilment facilities
Each order is picked, packed, and dispatched as soon as it is placed to guarantee a prompt delivery. Fulfilment centres are the sizable warehouses that keep goods close to the end user. An e-commerce company may own or lease fulfilment centres, or a third-party logistics service provider (3PL) business, a seasoned retail fulfilment firm that works with numerous brands, may rent or own them.
- Hubs for distribution
For both direct-to-consumer (DTC) and business-to-business (B2B) orders, large ecommerce retailers have their products in several locations across the US or the world. Splitting your inventory enables faster shipping of DTC orders as opposed to storing everything in one place, which can result in longer delivery times and higher shipping costs.
B2B e-commerce orders, which demand distinct fulfilment procedures than DTC orders, may be handled in a separate facility. There are variations in terms of packaging needs, e-commerce warehousing requirements, final delivery locations, and customer kinds.
- Sorting resources
Facilities for sorting merchandise are typically used by large-scale e-commerce stores that move enormous quantities of numerous SKUs.
Transporting goods to their final location is handled by shipping companies. FedEx, UPS, USPS, and DHL are popular US carriers that frequently convey packages by truck and aeroplane.
Choosing the ideal middleman to facilitate speedier delivery
Faster shipping options increase sales for e-commerce companies, but not all brands have the necessary logistics infrastructure to handle this themselves. In order to handle ecommerce logistics like a 3PL, many people find a partner. However, because there are so many middlemen involved, orders may be delayed if a supply chain link is disrupted.
If you choose the best 3PL partner, you get:
- The capacity to store goods at a number of the fulfilment centres run by the 3PL, freeing you from the management of your own warehouse(s).
- Dependable technology that keeps track of your orders and inventories and provides comprehensive analytics
- The knowledge of e-commerce logistics required to enhance your supply chain
- Reduced shipping costs and the ability to receive bulk discounts
- The capability of providing expedited shipping choices, such as 2-day shipping
How e-commerce logistics differ from traditional logistics in brick and mortar
Operations for brick and mortar stores and e-commerce differ in a few ways. Brick and mortar logistics concentrates on getting things into stores, whereas e-commerce logistics is focused on delivering products to the customer’s home.
Number of final locations
Brick and mortar businesses are primarily concerned with distribution to and from storefronts or wholesalers, but ecommerce firms can send their shipments to billions of consumer addresses worldwide.
Volume of orders and shipment size
Hundreds of things may be shipped to one location on pallets by freight in shipments to brick and mortar retailers. To many different clients, many e-commerce stores dispatch orders containing anything from one to multiple goods, typically via parcel.
Home delivery versus in-store pickup
The trend is for more established brick and mortar companies, like Target, to use their locations as fulfilment centres. Retail establishments might provide clients with additional flexibility by allowing in-store or curbside pickup. The best convenience is undoubtedly provided by ecommerce logistics, which deliver items straight to customers.
Software for inventory management
Tight reporting and real-time visibility into amounts across SKUs and locations are essential for managing your inventory, especially when it is done outside of your office walls. Use software created for ecommerce logistics procedures instead of manual static options like inventory sheet templates or spreadsheets.
The digital logistics technology used by your 3PL should provide the following useful features:
- Monitoring current inventory counts
- Setting reorder points will help you to know when to ship additional goods.
- Simple SKU and product variation management
- Integrations with your technology stack Information on the number of days’ worth of inventory you now have
Systems for managing warehouses
A warehouse management system (WMS) is necessary if you manage all aspects of e-commerce logistics from your own warehouse. These technologies are used to monitor warehouse performance and offer insightful data that can help you optimise your warehouse procedures.
A competent 3PL will have a WMS of their own that feeds information and data to you directly.
Have a warehouse of your own?
For brands with their own warehouses who require assistance managing inventory in real time, lowering picking, packing, and shipping errors, and scaling with ease.
Information and analysis
Are your deliveries made on time? What does each order cost you? If you switched from one fulfilment centre to two (or two to three, etc.), how much would shipping cost?
You may instantly gain insightful knowledge into your e-commerce logistics systems and determine where you can save expenses and establish a leaner supply chain with the help of the proper reporting technologies.
Modern ecommerce logistics offers significant advantages.
Finding the correct 3PL partner is important for the success of your company. The objective is to locate an ecommerce logistics partner who can assist your online firm in maximising profitability through supply chain optimisation. The following can be delivered by the ideal partner:
- Two-day shipping options
Nowadays, a lot of e-commerce companies are concentrating on building the logistical infrastructure required to provide 2-day shipping to their clients. Distributed inventory is included in this. Because their inventory is spread out over the nation (or nations), they can ship orders from warehouses close to clients to expedite delivery.
For all e-commerce platforms, 3PLs additionally provide a 2-Day Express Shipping Express Programme, which enables 100% coverage in the continental US from just one fulfilment centre location.
- Important insights
Enterprise-level insights are still available through ecommerce technology at a price that is reasonable for ecommerce firms. You can see what is working and what isn’t in your supply chain with the help of contemporary reporting and distribution analytics.
- Improved return handling
Ecommerce refunds can be expensive and time-consuming to add to inventory. Today’s ecommerce logistics make it simpler than ever. Return processing can be done simply and economically by 3PLs.
With the aforementioned advantages, e-commerce businesses may grow much more quickly and still maintain the necessary logistics infrastructure to satisfy their clientele.
Three e-commerce logistics trends to watch in 2022
The foundation of ecommerce enterprises is logistics, which is rapidly growing. It either helps you set your customer experience apart from that of your rivals or causes breakdowns that leave you in the dust. Observe the following three trends in logistics in 2022 and beyond:
- Customers desire quicker delivery
The surge in same-day delivery choices can be attributed to urban millennials’ tenacity and high standards. In fact, 61% of consumers would be willing to pay more for same-day delivery, and 64% of millennials are more inclined to make an online purchase if it is available.
Fast delivery necessitates that ecommerce companies broaden their geographic reach in addition to having the appropriate technological capabilities in place. Otherwise, it costs a lot of money to physically ship something from one side of the country to the other.
Last-mile delivery is crucial.
The last leg of the logistics process, often known as last-mile delivery, is under added pressure due to a growth in online order volume and a rise in customer expectations.
Last-mile delivery is the movement of a package from a distribution centre to its final location, frequently via a shipping carrier, with the aim of delivering the cargo as swiftly and economically as feasible. Last-mile logistics are also huge business, with this year’s forecast placing their combined value at $1.35 billion.
Consumers frequently feel that the last mile is when logistics fall short. There are various things that can prevent a delivery at the last minute, but most frequently, the recipient isn’t home or the local courier is having trouble.
Major shipping companies like FedEx and UPS frequently transfer deliveries to USPS for the final mile in order to hasten local delivery and lower the likelihood of failed delivery efforts.
3PL companies are taking last-mile logistics to the next level for online business owners and their clients:
- To receive the best costs for business owners, obtain estimates from all major shipping companies. This ensures that both businesses and customers benefit from quick, cost-effective delivery.
- Examines client information to enhance shipping. When inventory is distributed, it is divided up into tactical fulfilment centres and then shipped from the warehouse that is situated closest to the customer. You save money and time in transportation when your orders go to lower shipping zones rather than higher, farther away zones.
- Provides real-time tracking of online orders. Communication is key when it comes to last-mile deliveries. Real-time access to shipment tracking data enables you to immediately send your customers this information.
When paying for expedited delivery, customers anticipate getting their products when and where they choose. A firm may suffer regrettable and detrimental consequences from a failure in the final mile.
- Brands must spread risk and use creativity.
2020 turned out to be a year like no other as the world battled with the COVID-19 pandemic’s effects and supply chain disruptions. Overnight, things changed.
More customers made purchases from online retailers than physical establishments due to the fact that many consumers were quarantined or refused to leave their homes.
Some e-commerce companies received more orders than ever. Others, though, witnessed a fall in sales. The people who had unconventional thinking were the ones who survived.
Here are some suggestions for handling pandemics and supply-chain problems.
- Possess “hoarding” opportunities for customers to buy (such subscription discounts, bundles, or huge supply at a discount).
- Make a special effort to spread the word about COVID-19, supply chain constraints, inflation, and other topics that people are now searching for. Don’t just assume that your existing shipping language will do. Your website should have a banner.
- Try out several discounting techniques. If something doesn’t work, make a quick change and try something else.
- Locations for manufacturing and fulfilment should be varied whenever possible. Given the current demand and uncertainties, that might take some time on the manufacturing side. On the fulfilment end, that can be accomplished considerably more quickly. Right now, the value of effective supply chain management is evident.
- Make sure you’re taking the necessary precautions if your own fulfilment production teams are still in operation. For example, increase how frequently you clean and disinfect the entire facility, require protective gear for all employees and visitors, such as carriers, extend sick time, and perhaps find ways to provide additional financial aid to those who require assistance with childcare or medical issues.
Businesses can’t always be entirely ready for situations like these, but you still need to move promptly and take the situation into account.
How online retailers may provide 2-day shipping
The most popular shipping choice among consumers now is 2-day shipping. Studies have shown that if delivery alternatives are too sluggish, 25% of buyers would abandon their carts. If e-commerce businesses want to continue expanding, they must provide 2-day shipping.
Setting up the logistics framework for 2-day shipment demands effort and a sizable financial commitment. More warehouses need to be leased, labour has to be hired, shipping discounts with carriers must be negotiated, software must be implemented, inventory must be ordered, and many other things. This isn’t practical or profitable for the majority of e-commerce companies. For this reason, they work with 3PLs.
In order to offer 2-day shipping, as a result, they acquire advantages including infrastructure, knowledge, and technology. Two-day shipping has been shown to boost conversion rates, which helps e-commerce companies gain both new and recurring customers.
Consumers are expecting more from all of the internet retailers they use. Strong e-commerce logistics partners can boost productivity, cut delivery costs, and deliver a wonderful customer experience.
The appropriate 3PL partnership can give your company the freedom and flexibility it needs to expand without requiring you to hire a logistics director or manage ecommerce logistics internally.