How to Use Ecommerce Logistics to Scale Your Operations

Delivery is critical for return customers, learn how to use Ecommerce logistics to scale your online business.

How to Use Ecommerce Logistics to Scale Your Operations

Image Source: ShipMonk

Ecommerce Logistics Guide to Scale Your Operations Like a Pro in 2022

The eCommerce industry is soaring at an all-time high. Thanks to the times of minimal contact and social distancing that we experienced, even small brick and mortar stores are trying to reach out to customers online. 

Opening an eCommerce store sounds very appealing until you have to figure out how you’ll actually deliver the product to your end customer. 

It’s a tricky business. 

38% of shoppers do not buy from the same brand after a bad delivery experience and 50% of customers abandon their carts due to high shipping costs.

This shows that logistics bear the maximum weight of eCommerce success. They define the backend of your operations that ultimately ensure timely deliveries and a positive customer experience. 

A growing eCommerce business means growing logistical challenges. How do you scale your logistics to accommodate the increasing sales and customer demands? 

You’re about to find out in this guide. 

Let’s begin. 

Using Ecommerce Logistics to Scale Your Online Store

#1 Choose the Best Shipping Partner that Supports Scaling

Outsourcing logistics in eCommerce makes a lot more sense since it requires a different set of expertise altogether. Making the final call while choosing the right 3PL (third-party logistics) can be challenging. But if you manage to choose the right one, it will save you from a lot of stress. 

While choosing a logistics company, ask yourself:

  • Does the partner hold considerable experience in express delivery?
  • How reputable is the company in eCommerce logistics? 
  • Does it provide international shipping options?
  • How does it handle and mitigate logistical risks?
  • Does it have a sound technological infrastructure? 

When using Ecommerce logistics to scale your business, you need to look out for a logistics partner that is reliable and offers advantages from a cost perspective. 

Regardless of whether you offer same-day delivery or free shipping to your shoppers, you’re going to bear the expenses of delivering the product. So find a delivery service with competitive rates that also offers a top-notch delivery service. 

#2 Distribute Inventory for Reduced Cost 

If you’re using Ecommerce logistics to scale your business, it is likely that you’re planning to cover multiple geographic regions. In this case, it becomes essential to distribute your inventory and opt for local delivery options. 

Delivery solutions that span the entire country often have a one-size-fits-all solutions rule that can turn expensive and risky. After all, haven’t we all heard of the saying, “Never put all your eggs in one basket?”

According to statistics, the distribution of inventory can reduce shipping costs by 25% and result in 13% cost savings. Apart from cost savings, you can also speed up the transit time and provide same-day deliveries to customers. 

To effectively distribute your inventory and calculate the costs: 

  • First, analyze your previous zip-code data to reevaluate your optimal fulfillment locations
  • Next, determine a centralized warehouse location that makes it convenient to ship orders to maximum locations 
  • Lastly, calculate your shipping costs in case you opt for this strategy. Does it reduce your costs as compared to a one fulfillment warehouse? If yes, (which is likely) look for a local logistics provider. 

#3 Balance your Value-added Benefits 

eCommerce businesses that aim to scale face one common dilemma: How do you provide personalization to the growing number of customers?

A lot of eCommerce companies struggle to choose a shipping strategy that works best for the customer experience and cost optimization. Sure, a well-packed product adds a lot of value to the eCommerce shopping experience and brings about the much needed personal touch. 

But at the same time, value-added packaging considerably adds to the order complexity. This is the point when you’ll have to decide if your value-added efforts pay off in terms of costs and profit. Especially, if we’re talking about achieving logistical efficiency while scaling up nationally or internationally.

You need to draw a line and strike a balance between value-added benefits and profit. At the end of the day, customers seek faster deliveries. They won’t really care even if the product is well-packed if you don’t meet the delivery standards. 

#4 Automate What you Can

While you will choose a 3PL that has a modern technological infrastructure, you can look for processes that you can automate in the logistics cycle. For example, you can rely on eCommerce platforms like Shopify and BigCommerce for order management, customized branding, dashboards, and third-party integrations with logistics software. 

The modern supply chain is deeply rooted in technology and automation. Gartner predicts that by 2024, most of the supply chain functions like distribution and warehousing, order management, and after-market support execution will be supported by artificial intelligence and advanced analytics capabilities.

eCommerce companies are increasingly turning towards lean supply chain solutions. These solutions facilitate advanced stock management and inventory planning that helps them lower their costs. 

Automation can also help you consolidate data in a single place. It can streamline your supply chain process by filling out the data gaps and help you determine cost-effective ways to scale your deliveries. 

#5 Synchronize your Inventory 

Managing and forecasting your inventory is one of the biggest challenges when it comes to scaling your eCommerce business. You have so many questions. How much inventory is excess inventory? How much buffer time should you keep? Most importantly, how do you ensure that customers always get what they’re looking for at the right time? 

While figuring this out, inventory also blocks cash liquidity which you can use in other areas of your business. 

To effectively manage your inventory, you need to know its costs, demand predictability, and current stock levels.  

Since your goal is to scale, it is likely that the answers to these questions wouldn’t be simple. You’ll need to connect your warehouses, plan your reverse logistics, and diversify your supply chain. In this case, your best bet is to connect with experts like Zoho Inventory and Sku Grid that can help you synchronize your inventory. 

Wrapping up 

Having a growing eCommerce store is great. But the logistics challenges that come with it can be intimidating, so much so that even thriving businesses face complexities in shipping and order management. Ultimately, acing your logistics boils down to acing at three variables: costs, accuracy, and speed. If you get these right, you’re on the right track. 

Happy growth!