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18 May 2022 • Resources

Ecommerce logistics: Complete guide with definition, solutions, and tips

Ecommerce logistics: Complete guide with definition, solutions, and tips

With the recent health crisis, ecommerce market stats have skyrocketed! Online retailers have had to deal with a huge influx of orders. And while this is great in terms of sales for companies, it must be recognized that this sudden increase in activity is also a major logistical challenge to meet...

The success of an online business doesn’t only depend on the implementation of its marketing actions or its promotional offers. Logistics also has a major role, and companies must be competent in this area as well.

What is ecommerce logistics?

Ecommerce logistics refers to the entire logistical process related to internet sales. It includes different professions and requires an optimal organization so that packages are stored and then are delivered without hindrance to the end customer.

What is the role of logistics in ecommerce today?

Logistics is a central element in the ecommerce process for businesses everywhere. Its stakes are multiple:

  • Price: Having a good logistics process allows you to help reduce costs for your business. On the internet, price is a determining factor of choice. Most of your customers will probably not accept paying a high delivery price. This is an important constraint that you must absolutely get around to avoid cart abandonment.
  • Delays: Whether it’s for the preparation, the shipping, or the delivery of their orders, buyers expect quick turnaround times. They’re impatient and are even willing to pay a little more to enjoy their products more quickly. It’s therefore important to be able to propose several offers corresponding to consumers’ needs.
  • Return management: In case of dissatisfaction, customers sometimes want to return their purchases, without having to pay additional fees. This notion of cost has a major importance on the customer experience. You must therefore also consider ecommerce returns management in your logistics process.
  • Respect for the environment: Your logistics must also, as much as possible, reduce the carbon impact of your business. It’s nowadays unthinkable to be considered as a brand that sends its products in too big, over-packed, and over-plasticized packaging. This is very detrimental to the brand image of retailers.

Should you outsource your online sales site’s logistics?

Because logistics is extremely important and is a profession in its own right, you may have to outsource it. There are many reasons to outsource this activity:

  • Save money: Although the outsourcing of logistics has a cost, contrary to what one might think, in the long term, it allows you to save money... Most of the time, external service providers mutualize their transport purchases and spread their logistics activities over several customers within the same storage space. By choosing an external partner, you’ll benefit from more competitive prices per square foot to store your items or to transport them.
  • Not having a warehouse: Having your own storage space is a real headache! You have to find the space to keep your product supply, but you also need to have the necessary staff for its proper functioning and respect a lot of administrative and regulatory constraints... All this represents a significant workload and expenses.
  • Save time: Outsourcing allows you to refocus on your core business and save time on a daily basis. By choosing to delegate your ecommerce logistics, you’ll have all the time to focus on your marketing and sales actions, because you won’t be obsessed by this time-consuming task that is logistics.
  • Manage variations of activity: As with any commercial approach, internet commerce knows peaks of activity. This is particularly the case before the Christmas holidays or other busy periods. But these variations aren’t easy to manage in terms of storage or delivery of packages. What would you do if you had your own storage facility? You would be forced to sublet an adjoining room for your busy periods or to plan a larger warehouse for only a few months of the year... Unless, of course, you choose to outsource your logistics.
  • Benefit from the knowledge of an expert: Logistics is a profession in its own right that can’t be improvised. It’s a constantly evolving sector that requires constant monitoring and innovation. However, you can’t be on all fronts at the same time.
  • Benefit from support in case of international growth: If you decide one day to export your products internationally, you should know that you’ll be subject to many additional regulatory constraints, which vary from one country to another. In this case, the support of a logistics expert is a precious aid. The latter knows the local specificities of many countries.

What is the relationship between the e-merchant and their logistics provider?

You’ll have understood that the logistics provider is a partner in its own right. If you choose to outsource this task, don’t see it as an additional financial burden. Think of the provider as an expert in their field to whom you can refer if necessary... The relationship between an e-merchant and their logistics partner must be established on trust. It’s a win-win partnership.

For many online shoppers, delivery is one of the most important criteria when they make a purchase on the internet. In fact, many consumers who’ve had a single negative delivery experience may immediately change their ecommerce site the next time they want to purchase a product... For these reasons, the importance of using efficient logistics services is obvious!

Managing your ecommerce logistics internally: our tips

In spite of the situations previously exposed, perhaps you wish nevertheless to avoid losing total control of your storage and your deliveries. Similarly, the fact of benefiting from an additional lever to increase your margins or the desire to manage this area yourself may be sufficient reasons not to delegate your e-logistics. In this case, some advice will undoubtedly be useful.

Negotiate rates with your suppliers

First of all, it’s important to carefully read the conditions of your partnership with any storage company, supplier, or carrier. This will prevent you from being confronted with certain surprises along the way. Always ask for detailed quotes, as well as the insurance policy of your partners. These documents will allow you to know exactly what recourse you’ll have in case of theft, error, or damage. They’ll also help you to establish your forecasts in concrete terms.

Also, don’t hesitate to use the competition. Quotes are an excellent basis for negotiations.

Anticipate your needs in storage of your goods

Concerning the storage of your goods, if you choose to have your own warehouse or to rent a room, you’ll absolutely have to anticipate your needs in terms of space.

Some periods of the year will be slower. Others, on the other hand, will be marked by peaks of activity. You’ll need to juggle these two phenomena so that you don’t unnecessarily rent empty square footage for most of the year and also so that you don’t run out of space when you need to store more items

Find out about the best offers from carriers

Fedex, DHL Express, UPS, GLS, your national postal carrier... The carriers available on your country’s soil are likely  numerous, and it’s not always easy to know which one is the best for your needs. Some of them offer faster and more expensive deliveries. Other shipments are longer but cheaper. Some deliver to relay points while others don’t... The competition is very strong, and it’s essential to be well informed beforehand! Also, the fact of having perfect knowledge of this sector will allow you to negotiate more advantageous rates for the sending of your packages.

However, you should know that it’ll be complicated to negotiate the prices of the carriers if you don’t sell many items. Carriers are generally more inclined to give discounts to large ecommerce players.

At the same time, don’t put all your eggs in one basket... Working with only one carrier can sometimes be dangerous. What would you do if its staff went on strike? It’s therefore much better to work with several transport companies. This will allow you to have a fallback solution in case of need or to offer several shipping methods to your customers.

Pack your orders with economical and sustainable packaging

When a customer receives a package, its packaging is the first thing they perceive. It’s therefore the first image delivered by your company. To score points, I strongly advise you to prioritize personalized and ecological packages. It provides real added value, contributing to customer satisfaction and loyalty. Offer them an unforgettable unboxing experience!

Also note that environmental protection is now a major concern for most online buyers. As such, avoid over-packaging and go for recyclable packaging. Look for alternatives to plastic as much as possible and collaborate as much as possible with providers who care about their carbon footprint and their supply chain. Not only will the planet thank you, but you’ll also strengthen your brand image with your customers.

Determine your delivery and return policy

To ensure that your customers aren’t surprised and that their satisfaction is intact, be transparent... Your delivery and return policy must be clearly stated on your site.

According to Invesp, at least 30% of products currently purchased on the internet are returned. With the return rate in ecommerce being so high, you’ll inevitably be confronted with this problem. This is why your return policy must be explicitly highlighted on your site. In this case, you have several options: take care of the entire return or have the customer reship the package at their own expense if they don’t want to keep the product. Each option has its advantages and disadvantages. In any case, this must be indicated at the time of purchase.

Optimize your after-sales service

Of course, to keep your customer loyal, it’s not enough to send them their product. The consumer experience doesn’t end with the delivery. It continues even after the order is placed. So you need to ensure an efficient after-sales service. This requires competent and responsive customer service, which you can optimize by keeping an eye on your real-time ecommerce analytics and utilizing digital commerce strategically, but not only that... 80% of consumers nowadays ask for free returns for items they don’t want to keep. Admittedly, this can represent significant additional costs. However, it’s now a real business argument.

Solutions for outsourcing your ecommerce logistics

To outsource your logistics in ecommerce, several alternatives are available to you. Let me present to you these different options...

Dropshipping: sell without storage and without logistics problems

Dropshipping is an ecommerce system that consists of offering products that your business doesn’t have in stock. More concretely, when an order is placed on your website, you order the item yourself from the manufacturer or supplier so that it can be shipped directly to your customer. The advantages are numerous: dropshipping avoids taking financial risks, requiring product inventory, buying products, or renting a place to store everything. The initial costs are therefore very limited for retailers.

Fulfillment: optimize your delivery management

Fulfillment involves subcontracting all your ecommerce logistics to an external service provider. In this case, the entire process is delegated, from the placing of an order to the reception of the package by the customer, including the after-sales service and the management of returns.

However, unlike dropshipping, you own the products. Therefore, it requires a higher initial investment and good product inventory management, but it also allows you to maintain control of your inventory and to remain its owner.

Marketplaces: take advantage of the supply chain of these expert platforms

Finally, some marketplaces such as Amazon, Cdiscount, Spartoo, or ManoMano offer their merchants the option to subcontract their logistics and manage this aspect for them.

In this case, they take care of these businesses’ stock as well as the sending of orders and returns. Going through their platform allows you to benefit from a particularly extensive and efficient logistics network.

To simplify the entire logistics process, WiziShop has thought of everything! We’ve set up several partnerships, providing you with services that allow you not only to work with a freer and more serene mind but also help you to reduce your costs. As an example, we have a partnership with Packlink, a parcel shipping solution for individuals and professionals, founded in 2012. Its advantage? You only pay for what you send and you don’t have to subscribe to anything! Which is a way to considerably reduce your shipping costs in particular...

We also work with iTrack, an automated control server for all shipments, through which each carrier commits to deliver your national parcels within 48 hours.

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