Logistics is the backbone of eCommerce businesses. With the rise of eCommerce in the past few years, logistics management for online stores has become more complex. And you can ride this complex wave with proper inventory and supply chain management.
Over 2 billion people purchased goods and services online in 2020. In 2021, e-retail sales crossed 5.2 trillion USD worldwide, and it is expected to increase in the coming years.
Modern-day shoppers want their buying experience to be smooth and seamless. This is the reason to fine-tune your logistics process for scaling up your eCommerce business. Hence, it is crucial to provide a top-quality experience for your shoppers.
This guide will throw light on modern logistics services to amplify your eCommerce logistics and take your business to the next level.
Table of Content
What is the eCommerce logistics process?
Ecommerce logistics refers to storing and shipping inventory from the manufacturer to the end customer. The logistical process is an integral part of all eCommerce businesses.
By 2026, the global eCommerce logistics market will be worth 770.8 billion euros, a staggering increase from its value of 441 billion euros in 2021.
The eCommerce logistics process starts with moving bulk quantities of stock from the manufacturer and lasts until it arrives at the end customer’s destination. It includes inventory management, picking, packing, and shipping online orders.
Logistics is becoming a competitive advantage for eCommerce businesses that want to stay ahead of the competition. Some eCommerce businesses even report considerable risks if their e-commerce logistics process fails to meet customer expectations.
3 Types of eCommerce logistics
Online retailers need to have inventory management software for careful management of logistics. Now let’s take a look at different types of eCommerce logistics:
1. In-house Logistics
You’re responsible for your eCommerce supply chain when you manage your eCommerce logistics in-house.
That means tracking shipments from the supplier to the warehouse and to the various distribution centers or sorting facilities that you may have. Additionally, it requires using the analytics provided by your eCommerce platform to calculate the shipping cost for each shipment manually.
2. Third-party logistics providers (eCommerce logistics partners)
Third-party logistics providers or fulfillment partners help manage all aspects of your eCommerce supply chain to enable seamless deliveries.
They handle everything from customizing packaging and labelling to picking orders and shipping them out. So you don’t have to worry about hiring extra staff for cross-border deliveries or investing in expensive equipment.
Dropshipping is perfect for eCommerce platforms looking to snowball. It allows suppliers or manufacturers to send products–direct to consumers–without stocking them in warehouses. This eliminates warehousing costs but drastically adds to the delivery times since products are not stored in E-commerce fulfillment centers near customers.
Main components of the eCommerce logistics chain
The shipping process is a complex multi-step process, with each step reliant on the others. Here are some of the essential components:
- Suppliers: The role of the supplier is to create the product and ship it to fulfilment centers. Suppliers are those who ship inventories to a business destination. They send the product directly to customers if the brand is dropshipping. Otherwise, bulk quantities of products are made and stored in a warehouse.
- Fulfillment centers: eCommerce fulfillment centers are warehouses that hold inventory at strategic locations—close to your end consumer. When a customer makes an order, the fulfilment center packs and ships each product as soon as possible. Your eCommerce business can own or lease this fulfilment center facility, or your 3rd party logistics service provider can operate this.
- Distribution center: Distribution hubs are used by companies that want to maintain a large inventory with hundreds of items. These hubs split inventory between warehouses and transport modes. For example, you can use separate warehouses for DTC and B2B orders as they require different packaging.
- Sorting centers: The purpose of a sorting center is to receive large quantities of orders and then sort them into smaller shipments based on customer orders.
- Shipping carrier: You can use major shipping carriers like USPS, UPS, FedEx, or DHL to get your product from the warehouse to your customer. You can also rely on a private delivery carrier if you need something faster than standard shipping speeds.
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10 eCommerce logistics best practices
Use these 10 best practices for your logistics operations and see how much value it adds to consumer buying behavior.
1. Devise a strategy
Your eCommerce business’ success depends on the quality of your eCommerce logistics strategy to a large extent.
Ecommerce business owners should consider every aspect of their eCommerce supply chain to achieve optimal results. Your eCommerce logistics strategy should align with the goals of your business and understand the outcomes of events in the shipping process.
2. Collaborate with a good shipping partner
You will need to collaborate with a good shipping partner for discount shipping rates and express shipping. Third-party logistics (3PL) companies offer you access to economies of scale and infrastructure that you could not (profitably) deploy alone.
A 3PL can also help you avoid the hassle of hiring and maintaining staff, which will free up your time for more important things. The right third-party logistics service provider (3PL) can save you both time in transit and stress, so it’s worth the effort to find one.
3. Invest in packaging
Packaging is crucial to the success of your business, especially when it comes to making sure your products arrive in one piece.
You need to ensure products are packaged securely and in an appropriately-sized box so they don’t break during cross-border shipping. If you’re shipping something fragile, wrap it up extra carefully before dropping it in a box, and then seal it with tape.
4. Ensure quality
Online shoppers are accustomed to high quality, accuracy, and timeliness. They expect you to deliver their orders on time and as expected.
If you don’t meet expectations in terms of what your customers want, they will be more likely to switch brands. The quality of products and accuracy of shipping majorly contribute to the rapid growth of eCommerce brands.
5. Offer free and fast delivery
eCommerce businesses ship their packages to billions of consumer addresses around the globe. There’s a reason free eCommerce shipping is the top reason people shop online: it works.
Providing faster shipping options can be an excellent marketing strategy. But many sellers are missing out on the opportunity to attract online shoppers. To cover delivery costs, you can offer same-day delivery, free shipping, or shipping discounts only on select items or set a minimum order value.
If you’re selling a product on your eCommerce website that customers can find elsewhere, offering a competitive shipping rate is vital. The long-term goal is to get your product in front of as many eyes as possible, and using free shipping can help you do just that.
Also, 12 days of shipping doesn’t excite any customer. Timely delivery is non-negotiable. Nearly 65% of customers expect their products within 2-3 days after order.
6. Diversify the supply chain
It’s not always possible to avoid issues in your eCommerce supply chain. But, it is possible to reduce their impact across the entire supply chain network.
Try to diversify your supply chain wherever possible. Employee strikes at a logistics provider or issues with their supply chain can disturb how quickly and accurately you’re able to process your online orders.
7. Provide a precise ETA
The best way to ensure a positive experience for your customers is by providing them with an estimated delivery date and time of arrival. When you offer this information up-front, it helps to alleviate any concerns about the length of time it will take for their item to be delivered.
8. Keep your customers updated
Always send an order confirmation when customers place an order. It helps them know that they can trust you and that their product will be shipped at the earliest.
Next, send a shipment confirmation once the product has been shipped to the delivery service. This way, customers can see that their order is on track and moving forward.
9. Prompt reverse logistics process
Reverse logistics or eCommerce returns can be a logistical nightmare for eCommerce retailers. It was estimated that $102 billion worth of products were returned in 2020, a 70% increase from 2019.
Often, customers buy variations of a product with the intent of returning them, whether because they don’t like the color or something else is wrong with the item.
Efficiently planning the reverse logistics process—how returned products reach you from your customers—can help you promptly deal with the cost-saving process and improve your customer experience.
10. 24/7 customer service
How well eCommerce brands service customers, move beyond consumer expectations, and achieve customer satisfaction strongly determines how successful their business will be.
When your customer receives their package, everything must be in order. If it’s late, damaged, or doesn’t arrive, you’re most likely to lose them as a repeat customer.
If something goes wrong with the delivery of your package, don’t panic.
Once you’re made aware of a problem, call the regional carrier and immediately try to resolve the situation. For delays, you can give a discount on the next order or replace the item if it is lost or damaged.
Advantages of using eCommerce logistics solution
Here’s how using an eCommerce logistics solution can transform your logistics process.
The number of end-customer deliveries your business can make in a day is determined by two things:
- How many orders do you get within a geographical network?
- How efficiently do you plan your routes for your delivery drivers?
With the help of software solutions like Upper, you can make sure that your drivers are as productive as possible so that you can serve more customers every day.
It is imperative to plan and optimize your routes efficiently to scale your business and make more daily deliveries.
2. Valuable insights
With modern reporting and metrics, you can get real-time insights into your last-mile logistics. Upper can help you make smarter decisions because it helps track driver performance.
With end-of-day reports, you can get an overall idea of the total number of tasks performed and how well your drivers performed the assigned tasks. You can then tweak, improve, or maintain your strategy depending on the business performance metrics.
3. Faster product returns
Inventory returns are the bane of every eCommerce merchant. It’s a costly, time-consuming process that can harm your business and profits.
Thanks to modern eCommerce logistics solutions, getting products back from customers is easier than ever. Route planners like Upper can streamline your delivery process with quickly optimized routes and even quicker dispatch of all delivery tasks, you can quickly get those returns back into store inventory.
Ship Your eCommerce Orders Using Upper
If you’re an eCommerce business looking to ace in-house logistics, you can get Upper for managing multi-stop deliveries. It’s crucial to get the most out of every minute you spend on the job. That’s why Upper Route Planner could be the route planning solution you need.
It provides an easy-to-use user interface for scheduling and route planning needs. With Upper planner:
- Automated route planning minimizes your time and effort in generating a route plan.
- Automated scheduling enables you to generate schedules in advance.
1. Route planning
With Upper’s route planning and optimization software, you’ll consistently deliver your eCommerce shipments on time and eliminate all delayed deliveries. The route planning and optimization software helps your drivers with the shortest paths per their specific last-mile delivery constraints, such as driving preferences, time windows, and more.
2. ETA notifications
Upper sends automatic notifications regarding the ETA of last-mile delivery to your customers to save your drivers from failed deliveries or delivery attempts. It helps them get more deliveries done and ensures the items safely reach their final destination.
To know more about Upper and its route optimization process, sign-up for a 7-day free trial today.
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Three types of e-commerce logistics are commonly used by E-commerce businesses today:
- In-house logistics.
- Third-Party logistics provider/ eCommerce logistics partner
eCommerce transportation is the activity that facilitates the movement of goods from one place to another. The people who engage in this logistics network are called eCommerce transporters.
Third-party e-commerce logistics is a shipping option where you can outsource warehouse management and distribution processes to a logistics partner. They handle all aspects of the supply chain, from maximizing your efficiency with faster deliveries, and reducing shipping costs, to providing a great customer experience. Some of the 3PLs have a nationwide network of warehouses offering 1 or 2-day shipping.
The rapidly growing eCommerce industry has raised the expectations of modern consumers. It has also escalated the cost of shipping and tightened the delivery windows. Therefore, choosing an eCommerce logistics partner is crucial in the eCommerce industry.
Eventually, there should be a robust eCommerce logistics system to surpass the eCommerce delivery chaos. Referring to the best logistics practices will help to grow your eCommerce business. Moreover, you can take help from route planning and optimization software like Upper to perform on-time and efficient deliveries.
You can book a demo with us to learn about additional features of Upper Route Planner.