07.09.21

How to organize logistics for your e-commerce project

A well-thought logistics strategy and following the trends help the online store meet customer expectations. The main factors that influence the consumer experience of e-commerce are fast delivery, easy pick-up process, and detailed product information. About 80% of customers are reluctant to order from companies that provide poor service. How to properly organize the operations of warehouse management, delivery, and return of goods?
When a product is "two steps away" from the buyer
Large remote distribution centers usually delay order fulfillment. The distribution strategy to three or four small shipping centers allows businesses to deliver on the same day and even at night. For example, Google Express can deliver an order to a customer within four hours.

If you store products in mini-warehouses closer to the consumer, you can organize fast courier delivery around the city. Shortening the distance to the customer also decreases costs and improves customer service. A supply chain with multiple warehouses improves daily sales. Inventory allocation and planning become much more manageable.

Placing a warehouse close to the consumer is logical for e-commerce brands that want to deliver goods within 2 hours. European companies have been practicing the dark store format for a long time. Retailers rent premises in urban areas to use them as warehouses for online orders fulfillment. As a result, the buyer is satisfied with the speed of receiving the goods right into his hands and returns for repeat purchases.
Free and fast delivery: is it a marketing ploy or extra logistics costs?
According to the statistic, 53% of consumers name free shipping as the first reason to buy online. No shipping fees increase customer confidence and reduce cart abandonment.

Free shipping stimulates demand for goods but increases the costs of the shipper. Small and medium e-commerce businesses are forced to raise product prices to offset costs. When buyers realize that competitors are cheaper, companies lose profit again.

You can make free shipping cost-effective with two following ideas:
Set the minimum order amount. Customers will start spending more by adding more items to their shopping cart. Inventory movement will accelerate, and store revenue will increase overall.
Launch promotions and seasonal discounts. Marketing offers, such as "2 for 1", create demand for products. Free shipping costs will become less visible and align with sales revenue.
Before moving to free shipping completely, you should test the innovation impact on customers. For example, you can offer your customers temporary promo codes for free delivery and determine the result.

Some brands fulfill orders directly from their warehouses. This method allows you to control the packaging and shipping processes but increases costs. Same-day delivery can be unreliable and costly if it is carry-out with the internal shipping department. Working with a third-party logistics provider (3PL) helps you fulfill orders faster.

Placing goods in 3PL warehouses is a guarantee of timely shipment of goods. Products can be located in different regions, which helps to get closer to the buyer and save on two-day delivery. 3PL employees pack and send goods while the seller places an order, providing information on the parcel's movement. Accurate planning and discipline in the supply chain allow you to adjust costs.
The benefits of shipping direct to consumer
D2C, or "Direct to Customer" is one of the new trends in e-commerce logistics strategy. Brands that use the D2C model become more independent in supply chain management and reputation building. Companies can engage in dialogue with the customer, receive feedback, and collect data for needs analysis.

The advantages of the D2C model for e-commerce also include bold experiments with delivery options and individual choice of product promotion methods.

In this model, the business can personalize communications by referring to the customer by name and sending them thank-you-cards and individual offers. It is also essential when building long-term relationships with customers because the D2C model allows you to contact personally through various channels conveniently for the customer while maintaining the store's image.
Product returns as a reverse route of logistics
A hassle-free product return or exchange affects the relationship between the consumer and the brand. Logistics is "responsible" for the speed and correct execution of such a procedure. According to the data, 88% of shoppers want to return an item, and 95% of them say that an organized return process will turn them into repeat customers.

Managing the refund process takes a lot of time and money. Separating returned products from the new product supply chain allows you to adjust the procedure quickly. It is enough to provide part of the warehouse for returns and identify employees who will control the process.

Companies should consider return shipping terms that are appropriate for both parties. It is important to calculate the costs, consider the logistical implications of returns, and determine the cost of delivery, restocking fees, and the future of returned items (resale or liquidation).
Branded packaging for delivery
Choosing a recognizable brand package is no less important than optimizing logistics processes. For online stores, special packaging of goods can become a way to increase the audience on social networks and, consequently, the demand for products.

The package in the branded "cover" creates the first impression of the product and emphasizes the company's uniqueness. For example, Amazon packs orders in branded boxes with a smiley arrow. And if buyers have already formed specific associations with the sender, they will want to receive more such gifts soon.

It is quite possible to compete with famous brands if you develop product packaging with unique logos and find a unique way to track its parcels. Creating this delivery image increases customer loyalty and builds trust.

The effective interaction of logistics and e-commerce increases the demand for products and forms a decent reputation for the company. Experimenting with delivery strategies allows you to create a unique brand logistics model, taking into account all customer comments. Since consumers want to receive goods quickly and conveniently on the scheduled day and time, supply chain planning is critical for the company's future.

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