In e-commerce ventures, logistics are the processes of shipping order to customers or transporting an inventory to a merchant. … Logistics management is the practice of locating and identifying potential distribution and shipping companies, and evaluating their effectiveness.
Logistics is a congregation of various processes such as inventory management, warehousing, packaging, labeling, billing, shipping, payment collection, return, and exchange. All these put together turn into an exigent task, that requires a full-proof strategy to be accomplished.
Logistics are a vital part of any e-commerce business’s operations. In this article, we will look at 1) logistics for e-commerce, 2) important considerations in e-commerce logistics, 3) best practices, and 4) examples.
Logistics for e-Commerce:
A customer had the responsibility of becoming the last link in the supply chain by travelling to a store location and making their purchase. To facilitate and encourage customers, businesses would need to make significant investments in creating the perfect store in the perfect location. The costs associated with this would then be reflected in the final price of the good available for sale. The seller would also need to keep a particular level of inventory on hand and this would need to be regularly replenished.
Several changes have occurred to the system because of the shift towards online selling. The major changes include:
- The sellers
- Flexibility in locations
- Connecting to supply chain
Major Requirements of E-commerce Logistics:
As online retail has grown, especially in non-food related industries such as fashion or electronics, where goods are shipped to customers through postal or freight networks, there has been a need for four major functions from logistics:
Mega E-Fulfillment Centers
Parcel Delivery Centers
Shipping Costs: One common e-commerce dilemma for store owners are the abandoned carts. This happens when the customer adds in all the items but then gets either distracted or put off by the shipping charges. The additional costs are almost never factored in when the purchase decision is made and most often the item suddenly appears to cost more than its worth. When setting up e-commerce logistics, a store owner needs to have a clear shipping strategy in mind, which is a balance between being attractive to the customer as well as making business sense for the seller.
Charge the Customer What You Are Charged
Ship to Home
Ship to Store
Reverse Logistics Considerations:
Key Components of a reverse logistics framework include:
- A clearly stated Returns Policy
- An established process for Returns Preparation
- A process for Receiving returned items
- A process to Ship an item exchanged, offer a refund or store credit
- A systematic way to Inspect and Sort returned items
- An Asset Recovery System that may include things such as restocking, repackaging for sale, return to a vendor and disposal or scrapping.