What is logistics and how does it apply to e-commerce?
The management of resources when in-transit or in a state of rest can be aptly termed as Logistics. As we talk of e-Commerce, logistics refers to the process of delivering orders to the customers or providing the inventory to the merchants. These days mobile or e-commerce app development has turned to this concept. A plethora of apps are available on the Google Play Store or the AppStore. With logistics becoming a part of e-Commerce, there has been a sharp decrease in the goods that earlier went missing or were delayed. Thanks largely to the attached devices that can provide the location of the vehicles carrying the goods.
The planning, implementation and administration of how the goods move from their source to the destination must occur within a given system meant to achieve specific aims, that may vary from one industry to another. Managing logistics can be divided into the following three steps:
- Discover and recognize possible or target suppliers and distributors
- Find out how accessible they are in terms of business production
- Form relationships with those who offer the most cost-effective solutions to your business
Big companies such as Amazon, Flipkart etc. may tend to work with a bigger base of suppliers and distributors to keep pace with demand. This may not be the case with smaller start-ups. For smaller companies, local businesses can serve their own purpose.
Logistics e-Commerce has started to grow along with the increase in popularity of e-Shops and delivery companies. Customers are now asking for quick deliveries more than ever before. The online markets are now offering fast shipping, high quality, and trustworthiness. So, every business requires to better their delivery speed as well as the quality of their products. Such companies are helped by tools and technologies in the logistics industry to organize their business and get the needed results. This will keep their market intact.
The most common way used to deliver goods has been through the Delivery boys coming on their bikes. Last heard, Amazon is planning to deliver the packages through Drones but it is still not in practical.
It’s not only that logistics is delivering goods to the customer, but it also has to be a process that works in reverse as well. If the customer is not satisfied with a product there has to be a system that will enable them to return the product in a hassle-free manner. Not only this is the right thing to be done, but it also builds the rapport between the company and the customer. The satisfied customer may return next time for another purchase from the same company.
Personalization is another factor that counts in e-Commerce. The role of a personal approach brings more profits for the company. Companies can improve their personalization techniques in some of the following ways:
- By providing personalized offers according to the likes of the user
- Having in place a 24x7 support system for the customers to rely on
- Shortened delivery periods
- Flexibility in the logistics process to accommodate the customers
- Special offers for the customers if they purchase maximum products from your company
Vendors today are using several ways to connect with their customers by the use of emails, newsletters, social media, advertisements, text messages and calls. In this manner, they can inform them about the status of their order and other services. Also, the behaviour of the delivery person is a crucial factor for building a rapport with the customer. The delivery personnel can be tracked by means of the software used by the company to know whether the delivery was on time. The feedback by the customer ensures how happy the experience has been with the company. The delivery personnel, also, should not be overburdened as their ill-mood can reflect in their work negatively and this may show up while they communicate with the customer. Retailers, as such, need to ensure that the firms they are working with are professional and by no means, the company will lose its customers.
As the company grows, it is bound to faces challenges from step 1 to the last. If uncontrolled, logistics can drain off most of the team’s resources. The steps mentioned below can help any e-Commerce company overcome the challenges faced by logistics:
- Discover an E-commerce Logistics Partner before you start trading in the e-Commerce market.
- Focus on Your Core Competencies and let others do the work you are not an expert at e.g. transferring goods across locations.
- Avoid making simple mistakes. Deliver the orders on time to start growing your business.
- Synchronize Your Inventory so that the customer does not order for an item that is unavailable. An unsynchronized inventory may lead to the loss of a customer.
- Connect Your Warehouses so that there are various options for you to fulfil the customers’ orders.
- Balance Value Added Logistics, Costs, and Focus. If the entire package has been pretty well packed, shipped and delivered but costs are booming because of the value-added services, better have a check on them and see which service can be avoided or at least try finding another partner at a lower cost.
- Free and Fast Shipping is what is desired by each and every customer. You will get more customers but see that such a service is affordable or not.
- Regionalize Inventory to Reduce Cost. If inventory can be localised, it would cut down distance and save on money for the company. This would also be a plus on delivering the product early on.
- Leverage Technology for Logistics Rates. Having different rates for different types of shipping saves a lot. However, to accomplish this technology needs to be used. A warehouse management system or a transportation management system could have such options built into them. Such type of systems may require the users to specify inputs such as zip code, destination, carrier, weight and dimensions of the package, etc.
Sudipto writes technical contents periodically and backs it up with extensive research and relevant examples. He’s an avid reader and a tech enthusiast at the same time with a little bit of “Arsenal Football Club” thrown in as well. He’s got a B.Tech in Electronics and Instrumentation engineering.