e-Commerce Logistics Efficiency: 3 Strategies to Employ & 3 Benefits Gained
With the sale of Jet.com for 3.3 billion to Wal-Mart, e-commerce stores are once again in the limelight as is e-commerce logistics efficiency. Old e-commerce stores are working on improving further, because with the sale of Jet.com to Wal-Mart the competition has severely increased. Jet.com, Wal-Mart’s own website, and Amazon are soon going to enter into a battle for supremacy. Their battle for the U.S. market in particular is going to be cut-throat. That's why the smaller e-commerce companies and shippers who want to go online with products, need to focus on e-commerce logistics efficiency.
Focus on e-Commerce Logistics Efficiency to Compete with the Giants
While the giants are preparing for supremacy and the existing stores are looking to strengthen themselves in their own niches, there are still many more people entering in the online retailing market. Many of the new entrants have unique USPs (Unique Selling Point) and effective marketing strategies planned out; however to compete they have to focus on the core strengths of what makes an e-commerce successful. Pure play e-commerce stores do not have a brick and mortar presence so it really has to work hard on how will they get the product in the customer’s hands timely and cost effectively. The shipping cost and e-commerce logistics efficiency can make or break an e-store.
Shipping across the USA is difficult, and going global comes with its own unique challenges. And shipping cost is what makes the difference between a successful sale and the “shopping cart abandonment” dilemma that plagues many e-stores. Shopping cart abandonment is when the customer drops the idea of the purchase after seeing shipping fees or unnaturally long shipping periods.
3 Strategies for e-Commerce Logistics Efficiency
To undertake e-commerce logistics efficiency, there are three strategies:
- You sell a drop-shipper’s products and capitalize on their e-commerce logistics efficiency expertise
- You set up your own team
- You work with a third part logistics company which shall handle warehousing and order fulfillment
If you are one of the successful ones and your business is growing you then have the option of outsourcing your shipping to a third-party logistics company. Choosing the right third-party logistics company can bring a lot of advantages on the table. Let us look at some of them.
The Benefits of using Third-party logistics to Aid in E-commerce Logistics Efficiency
The most glaring advantage is that not only do you save time, but shipping is being handled by someone whose core business is shipping. They will, in most cases, be able to execute shipments much more efficiently than you. Beside this obvious advantage you get the advantage of faster business growth and possibly lower costs.
Avoid Long-term Leases
Most logistics companies have a flexible pricing model. This means that as your business operations ramp up, or when you have a seasonal slump in sales, they adjust their prices and services accordingly. Renting your own warehouse and setting up a delivery network is a fixed cost, but a third-party logistics company charges month-to-month for the amount of space occupied in the warehouse which leads to huge cost savings, especially during the non-peak seasons.
Setting up your own team leads to having more people on the payroll. Besides the obvious cost of salaries there are many other government regulations to be adhered to and also the dilemma of managing a greater team size.
By outsourcing your shipping you outsource a huge section of human resource. It will be the logistics company that shall be responsible for finding and retaining good people. Also in times of flux you will not have to worry about cutting jobs and depriving people of a livelihood.
Even warranty claims and returns can be handled
“Reverse Logistics” is what the shipment companies call the domain deals with handling returns due to customer dissatisfaction or warranty issues.
No, achieving e-commerce logistics efficiency is no easy task, and having someone else take care of it on your behalf really makes your life easier.
By outsourcing a very attention intensive operation to a reliable company, you gain the time to focus on long-term strategies on how to better compete, like entering the mobile market via a successful app launch, or concentrating your efforts into a new niche.