Logistics for online shops – what you need to know

For any e-commerce start up, properly coordinated logistics are the key to your success.

You’ve taken the first big leap of faith, you’ve started your business and you’re ready to take on the world. However, if you are not prepared to properly navigate the challenges running an online business presents, you could very quickly find yourself on the fast road to failure.

Having Visibility

As your e-commerce logistics needs grow, the bigger picture can be forgotten in a flash. Companies that experience rapid growth may add logistics capacity in an ad hoc fashion, bolting on in a flash of panic to deal with a surge in orders or new products. Perhaps you’ve expanded to utilise several warehouses, drop-shippers or other logistics tactics.

Stock management is crucial; you need visibility of what’s in the warehouse if it’s being sold online. It’s truly a balancing act; keep enough stock on hand but not have excess inventory tying up cash and shelf space. It’s vital you partner with logistics providers who can help you develop the systems and operational discipline to make your inventory work smarter and harder for you. That includes your website, too!

Decentralised Warehousing

The latest trend of e-commerce is having the product as close to the customer as possible. This is best for reducing the transit time, and thus ensuring customers get their products in a timely fashion, keeping them happy.

This strategy shortens the last mile to the customer. These facilities could be mini distribution centres or dedicated fulfillment centers. Some offline retailers are converting retail locations into shipping centers, devoting some or all of the footprint to fulfillment, largely a result of the pandemic.

Whatever you choose, it’s important that you have effective use of space, with the right pick and pack options and an optimised distribution network.

Develop a loyalty system

Having a loyalty system is very important to retaining new and existing customers. Many brands we work with opt for a rewards point system online, so repeat custom is rewarded with a small discount.

Even though having a loyalty system set in place could give you a little bit of a deficit in cash coming into the business at points, it will mean potentially fickle customers are encouraged to return, spending more money and over time, will even itself out and ultimately end in the favour of your company. Think about the lifetime value of your customers as opposed to short term profits.

Don’t Invest in paid ads too early

Having ads to increase the knowledge of your business can be great and when you’re small and up and coming it can be the perfect opportunity to gain more traffic for your business.

Spending too early when your website isn’t optimised can hurt you in the long run.

If you can find ways to get your business advertised for free or with a more sensible longer term investment, that would be the best option for saving money and getting your business out there.

The world at the moment is very online orientated so there’s no better time to get your e-commerce business up and running. As the world emerges from the pandemic, it’s vital that businesses improvise, adapt and overcome.

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