The ecommerce boom in the last decade has led to the rise of many ecommerce startups. This has been made possible by technological growth that has in turn transformed eCommerce logistics. Many services available today like delivery date estimation, shipping or delivery exception management, reverse logistics, etc., have made the market even more competitive.
To survive and excel in the ecommerce landscape startups must get the basics of ecommerce logistics straight. This means, knowing how to procure, store, and eventually fulfill. In this blog, we will be taking a detailed look into the most important things every startup needs to know about ecommerce logistics.
Things to know about eCommerce Logistics
The logistics industry supports eCommerce companies of India in several different ways. Here is our list of things about the logistics industry that are critical to the success of an eCommerce startup:
1. Planning for Demand
In order to fulfill customer demands satisfactorily ecommerce startups must learn to plan ahead. This means, calculating the amount of items likely to be sold in each category, and keeping stock levels flush during the sale season. Demand forecasting must be done after thorough surveys and statistical analysis. Many companies today use AI-driven modules to study customer buying patterns in depth.
Demand forecasting is especially helpful in avoiding stock outs during the sale season. Moreover, with proper planning, ecommerce startups can avert dead stock and sell more efficiently. After incorporating forecasting, startups are also better able to handle manufacturing or procurement delays.
2. Real-time Visibility of Shipments
Customers of today’s day and age expect businesses to ensure that they can view the status of their orders at all times. This includes ensuring that whenever the order is placed the customers can see where exactly their item is at a particular time and when it is expected to arrive. This can be done by improving tracking capabilities and extending them to the customer to help them view their orders.
For that, many brands use eCommerce shipping software that can send automated tracking updates to customers through email, WhatsApp, and SMS. They also offer live tracking via tracking portals that keep customers at ease.
3. Cost of Shipping
The main logistics cost ecommerce startups must be aware of is the shipping cost. How far one ships obviously affects shipping costs but other things like the weight and dimensions of the package, speed of delivery, or even the shipping carrier one uses have a big impact on shipping rates.
Other costs to consider include reverse shipping costs and handling fees. Beware of hidden charges, not explicitly included in shipping costs. These can remarkably increase overall prices. It’s also good to think ahead of the type of shipping you want to offer. For example, expedited or on-demand delivery always costs more than standard delivery.
4. Reverse Logistics
An ideal way to execute reverse logistics smoothly is to partner with an expert on the domain and monitor the process closely to avoid damage or loss of returning products. Here again, shipping softwares can help. They provide real-time return and refund tracking. Moreover, most of the returns management softwares can help turn returns into exchanges and boost your revenue.
5. Warehousing
An eCommerce startup needs a place to store their inventory and logistics companies offer the solution through warehouses. Businesses must store their products in locations that are closer to their customers depending on the demand, which allows them to reach their customers faster and also ensures the cost of shipping is reduced since the products are transported to the facility in bulk.
Proper warehouse management is even more important for hyperlocal delivery partners who have anywhere between 10 minutes to a maximum of a day to deliver orders.
6. Packaging
As evidenced by the numerous unboxing videos shared on social media, packaging plays a big role in improving customer satisfaction. Therefore, think about your packaging and find ways to make it personalized so that every customer feels valued.
It’s also a smart choice to buy packaging materials in bulk. Take a rough estimate of the number of orders you’ll likely ship in a month and buy packaging materials at once. You could definitely buy in bits and pieces but it ends up being costlier.
7. Performance Analytics
The growth of an ecommerce startup depends on how well it learns from its mistakes. The way to do that is by analyzing performance on all fronts. Performance analytics can also help you track how every carrier is performing; their SLA breaches, on-time delivery rates, cash remittance, and more. To support scalability performance analytics and regular reports are a must.
8. Exception Management
Shipping delays are common in ecommerce but when delays are not addressed quickly they turn into failed deliveries or RTOs (Return to Origin) and end up going back to the seller without being fulfilled. Delays can happen for a number of reasons but the important thing is to sort them quickly through exception management.
The first step to that is finding out the reason for the delay and then notifying customers and carriers so that the shipment may be delivered successfully at a later time. Exception management is also helpful in curtailing fake delivery attempts and is equally applicable for reverse shipments.
9. Estimated Delivery Dates
Estimated delivery dates (EDD) are becoming increasingly important in ensuring customer satisfaction and retention. As a startup, you must tie up with shipping carriers or shipping software that helps you project estimated delivery dates to customers while they are shopping to reduce abandoned carts. EDDs can be shown on the product display pages (PDP), the checkout page, and the delivery tracking portal. Ideally, the EDD must also be shared after order placement on customers’ email and through SMS or WhatsApp.
Conclusion
Ecommerce startups need to understand the importance of eCommerce logistics. Since the entire eCommerce industry cannot exist without logistics companies, the costs and importance of the sector are critical to the success of any eCommerce operation. Use this article as an introductory guide to understanding how to navigate through the labyrinth of logistics.