Thinking about working with a logistics company for your e-commerce business? Has logistics become a bottleneck in your current operations? Modern e-commerce logistics solutions from inventory management to fulfillment services to shipping options are streamlining operations for online retailers everywhere but where do you start in your search for ecommerce logistics solutions?
To help you with the search for an e-commerce logistics partner, we’ve put together this list of tips and guidelines to use in the process. Finding the right logistics support is easier when you know what to look for so use this list as a guide when trying to select a logistics operation.
What is e-commerce logistics?
It might help to first define what we’re talking about when we refer to “logistics”. In the context of e-commerce, logistics includes anything involved in the process of fulfilling orders placed through online stores. This starts with storing the items sold and warehouse management, selecting the goods from shelves or other warehouse space when they are ordered, packing and shipping them to end customers and sometimes extends to handling ecommerce returns as well.
In short, logistics start working in the background the moment a customer places an order and continues until the package is delivered to them. The logistics network involves lots of moving parts, from the supply chain to the transportation of goods to storage in an e-fulfillment warehouse to order packing and shipping — all the services that online stores need to deliver what they sell online.
What is included in logistics services for e-commerce?
Logistics for ecommerce includes all necessary steps from preparing a package for delivery to delivering ordered items to the end customer.
In fact, it can even start before that, with warehousing services that store goods in safe areas in environments appropriate for the conditions required for the goods. This can involve temperature and humidity control, custom security measures and more.
The first step taken by logistics companies after an item is ordered is picking it from the shelf space where it is stored. Then it’s on to packing it properly to keep it in ideal condition during the rest of the delivery journey before it’s handed over to a parcel service to get to the final customers.
So, from storing items to preparing them for shipment to turning them over to shipping agents for delivery, logistics partners take care of the complete order fulfillment process so you can focus on your business.
Should you invest in in-house e-commerce logistics?
“It depends” is never a satisfying answer but that’s what we’re going to have to give here in response to this question.
Of course, you can keep everything in-house and set up your own warehousing and order fulfillment operations. For various operational reasons, it might be the better choice for you until you reach a certain amount of volume or scale.
After your grow past a certain point, however, you are nearly always better off outsourcing your logistics needs to specialists. Why? For the same reasons you outsource anything else – it is not cost effective for you to do certain tasks and you can both save money and benefit from specialist experience and expertise by working with a third-party service provider.
When it comes to everything involved in the order fulfillment process, building, maintaining and staffing your own logistics operation on top of your sales and marketing teams creates difficult financial and practical challenges.
That’s why the great majority of small businesses that start out by fulfilling their own orders reach the point where they realize they’re much better off by working with a logistics partner.
What to look for when deciding to outsource logistics
Here are a few of the main areas you should consider when selecting a logistics partner:
- Shipping accuracy rate. This is an important metric that tracks how well logistics services for ecommerce do their most basic job – get the right product to the right customer. In massive warehouses with thousands of items, mistakes will be made even with the best technology but any logistics provider good enough for you should have an accuracy rate of at least 98%.
- Integration with CRMs and tech ecosystems. Digital integration means being able to access all relevant information about your shipments, returns and more. In many cases, it also means being able to get answers quickly yourself rather than relying on someone to respond to your call or email. Integration is a valuable asset that keeps you informed about deliveries, shipments in progress and other issues that you customers may inquire about.
- Secure facilities. You’re turning over your inventory to someone for safekeeping — are their facilities up to your standards? You have the right to ask about how the warehouses of your logistics partner are secured and protected. Always ask about security measures implemented at sites where your goods are stored. Modern ecommerce logistics warehousing should meet the highest standards.
- Customer support. Customer support is important for any service, and logistics is no exception. Always ask about available resources to help you when you have a problem, question or anything else that requires contact with the company.
- Flexible pricing plans. Per-piece charging is the industry standard - the more you ship, the more you pay. However, different ecommerce logistics providers may offer different plans that may be more appropriate for the volume of your business. It doesn’t hurt to ask and you may find that a fulfillment center is willing to be more flexible than you realized.
What additional solutions do logistics providers offer for online stores?
Many logistics partners will offer additiona premium services in addition to handling order fulfillment, including:
- Processing returns. Returns are a major part of ecommerce and handling them takes time and resources. Many fulfillment centers will process returns for you, meaning they will inspect the returned item to see if it is fit to be returned to inventory and return it to suitable condition if needed. They also forward the information about the return to you for return credit processing, etc.
- Custom packing materials. Many brands want to use their own exclusive packing materials as part of their customer experience. If that’s important to you, be sure to ask potential logistics partners if they allow such substitutions from the standard materials they use.
- Stock inventory. It’s important to reset your inventory from time to time to match what is reflected in your sales and purchasing records.
What impact does e-commerce logistics have on your business’ growth?
Logistics partners allow you focus on what you do best — optimize your online store and increase sales & conversions. As we mentioned earlier, when you grow past a certain point, taking care of your own logistics can become a time and resource-consuming process that makes no financial sense.
e-commerce offers many opportunities for fantastic growth but you have to be able to concentrate on what you do best while entrusting certain tasks to others. Logistics and order fulfillment is a great example of this. If you’re spending time, money and attention on these tasks, you’re not focused on being competitive in a crowded online marketplace.
Logistics is a crucial part of the performance of any e-commerce business. The efficiency of the logistics processes can influence the sales, reputation and customer satisfaction to take the business to new heights if done well. Choosing the right e-commerce fulfillment service is an important decision that is made much easier when you get answers on the topics we’ve covered here.
What is e-commerce logistics?
E-commerce logistics is the range of services needed by online stores to fulfill the orders they take online. They include all the steps required to get ordered items from warehouses or fulfillment centers to end customers.
What do e-commerce logistics processes involve?
E-commerce logistics processes include inbounding goods to a warehouse, picking and packing them when they are ordered, preparing them for shipment and transferring them to a shipping agent. In some circumstances, ecommerce logistics include returns management or help with conducting an inventory.
Is it worth outsourcing online store logistics?
As e-commerce operations grow, they typically find that the demands of an increasingly complex order fulfillment operation becomes difficult to manage. They need more space, they need more staff and the entire operation is much more complicated than it was with lower volumes of packages. Working with a logistics partner becomes the right move at this point since it allows the business to continue to grow without having to divert resources away from the central mission of the store, which is to sell.