If you run a business and sell online, you rely on eCommerce logistics, which accounts for a wealth of moving parts to get your package where it needs to go. Manufacturers send products to suppliers, and suppliers ship these products to stores.
Most small businesses can manage their eCommerce logistics independently. However, as a business owner, you may want to invest in help from an eCommerce logistics company to help your business grow substantially.
This article will help you better understand the eCommerce logistics process, and offer guidance on managing logistics at your eCommerce company.
The eCommerce Logistics Process
eCommerce logistics, also known as eLogistics, encompasses everything that happens between a customer placing an online order and receiving their package. Three major ways to run this process are:
In-house logistics: This is when your company manages all of your eCommerce and logistics processes independently. It can be more cost-effective but is not manageable for larger companies.
Dropshipping: This is when your manufacturer or supplier ships your product directly to your customer. You can save time and shipping costs with this route, but delivery times can be unpredictable.
3PL: 3PL stands for third-party logistics. This is when you outsource logistics management to a company that offers eCommerce logistics services. This option is convenient but comes with a loss of control over your logistics process.
While these are the three most popular eCommerce distribution methods, there are other options to choose from if none of these fit your business goals.
Whichever method you choose, the process typically follows the same steps. For example, let’s run through the process of someone ordering a new pair of shoes online.
The customer goes to your online store and purchases the shoes.
If it hasn’t already happened, the manufacturer makes the shoes and sends them to a supplier. If the retailer is not using the dropshipping method, the supplier will send the shoes to the retailer.
The retailer or supplier packs and ships the shoes to the customer.
Before they reach the consumer, the shoes first go to a fulfillment center. This is to make inventory management more efficient. During the fulfillment process, workers will sort products by location to streamline bulk deliveries.
A mail carrier such as FedEx, Canada Post, etc. will pick up the shoes from the center and deliver them to their final location.
Online Business Logistics Giving You a Headache?
Rest easy with expert help from our experienced team.
The Benefits of Properly Managed eCommerce Logistics
Online shopping is dramatically increasing. In 2020, 82% of Canadians shopped online, compared to only 73% in 2018. In 2022, this rate isn’t slowing down. Most customers expect retailers to offer an online option, even if they are primarily brick-and-mortar.
This expectation gives eCommerce platform owners a competitive advantage. However, poorly managed logistics can lead to a significant decrease in customer satisfaction. Ironically, this can put you at a disadvantage compared to your brick-and-mortar competitors.
With well-managed logistics, your eCommerce business gets:
1. Happier Customers
Smooth commerce logistics result in a better customer experience. Consumers expect their orders to arrive on time and without damage. Proper eCommerce logistics management helps ensure that this happens.
2. Reduced Costs
Improper management can make you pay more than necessary. Shipping costs in Canada can be expensive, and eCommerce logistics management can help you reduce them. Partnering with trustworthy eCommerce logistics companies can also help you significantly reduce costs.
3. Improved Warehouse Management
Part of good logistics is actively managing e-commerce warehousing. A well-thought-out eCommerce logistics plan lets you optimize the space in distribution centers and proactively restock popular items.
4. Increased Transparency
Knowing an item’s delivery status improves your inventory management and customer service. With full transparency into your supply chain, it’s easier for you to estimate when your customer will receive their parcel and detect lost items.
eCommerce Logistics Solutions & Tips
Establish Your Fulfillment Strategy Early
Think about your regular business practices and decide how you should fulfill orders based on them. Consider the advantages and disadvantages of self-order fulfillment to determine if it is right for you.
If you choose to outsource fulfillment, research which eCommerce logistics companies are best for your company. The right partner will help you get the most for your and your customer’s money.
Keep Your Supply Chain Options Open
Supply chain interruptions are out of your control. Unfortunately, these interruptions affect your delivery schedule. Compare the major shipping companies and diversify your suppliers to prevent business slowdowns. When more than one supplier is at your disposal, you can order from another if one has a delay.
Optimize Your Storefront for Mobile Devices
Canadians use mobile devices more than computers for online shopping. So, online stores must be mobile-friendly. If customers struggle to navigate your storefront, they won’t bother purchasing your products.
Remember that mobile devices come in a wide range of resolutions. Opt for an adaptable web design instead of a list of static size options.
Managing eCommerce Logistics Is Easy
Work with Canada’s most cost-efficient shipping company—save up to 70% off your shipping costs.
Consider your eCommerce logistics Canada-wide. Many Canadian customers live in remote areas that are not easily accessible for major shipping companies. If you want to deliver products to people in these regions, you will need to make an effort to find sufficient shipping solutions for hard-to-reach locations.
Canada Post has a universal service policy that guarantees its ability to deliver to remote locations. If you are struggling to find a carrier that can meet this requirement, Canada Post is probably your best bet.
Keep Your Customers in the Loop
Always notify your customer when their order is shipped. Consumers appreciate the update, and it’s an easy yet effective way to build trust. If possible, try to provide them with an ETA (estimated time of arrival) for delivery. Many consumers will plan to stay home if they are expecting a delivery.
Opt for small businesses shipping solutions that let customers track their delivery too. Most people expect to be able to track their delivery and become frustrated when they cannot.
Remember to Streamline Returns Too
As much as you want to minimize returns, it’s best practice to have a straightforward return policy. Good reverse logistic management means that returned items will get back to you without additional damage, making reverse logistics just as important as its counterparts.
An efficient return process will improve inventory management and increase the likelihood that the customer who returned the item will purchase from you again.
Streamline Your eCommerce Logistics With Ship Expert
Failing to follow logistics best practices can lead to lost revenue and a lot of mismanagement headaches. Luckily, with the right knowledge and tools, logistic best practices are easy to follow.
Before you open your online shop, make sure you know exactly how consumers will receive their purchases. Take the time to understand the logistics process in detail and seek the most effective ways to securely ship every order.
Greg Woo is a seasoned expert in the logistics and distribution industry, with a career spanning over two decades. He has a comprehensive understanding of shipping and distribution needs, and has extensive experience integrating with e-commerce stores as well as customer specific WMS (warehouse management systems) and ERP’s (enterprise resource planning software). His tenure in the industry and established courier and LTL partnerships have allowed clients to benefit from reduced shipping expenses, as well as improved operations through software and specialized integrations.
Greg is currently the Director at Ship Expert Inc., a role he has held since February 2015. Prior to his role at Ship Expert, Greg held significant positions at Juxto, a telecommunications and managed internet service provider.
Compare. Ship. Save.
Save money on shipping costs, provide better customer service, and automate your shipping.