Starting your own business is easier today than ever before thanks to e-commerce, but creating a successful business still takes the same amount of intellectual effort and strategy as a brick-and-mortar store.
If you have an e-commerce shop or are looking to start one in the near future, it’d be best to brush up on how to handle logistics and fulfillment. For new e-commerce retailers, fulfillment is the process of receiving, packaging and shipping products and goods. Logistics is how you get your products to the customer.
Here are the logistics and fulfillment details aspiring e-commerce owners need to know.
You Can Pay Someone for Logistics and Fulfillment or You Can Do It Yourself
The beauty of e-commerce lies in the wide range of choices owners have when setting up their businesses; logistics and fulfillment offerings are no exception. Companies like Amazon, FedEx and UPS, among others, offer logistics and fulfillment options for e-commerce retailers. These services do come at a cost, though, and Amazon has more guidelines for e-retailers than most other platforms. However, Amazon also has a built-in audience, which is a major advantage to using their e-commerce platform.
If you’re not impressed with their offerings or think the cost of doing business on such platforms is too high, you can handle everything yourself. This will take up more of your time, which means your business may not be getting the attention it needs to continue growing. On the bright side of handling everything yourself, you’ll quickly see the money you’re saving, which can be put back into the business.
If You Pay for Fulfillment, You Have Little Control Over Details
At the risk of engaging in unoriginality, let’s use Amazon as an example because, after all, they are the e-commerce giant. If you decide to use Amazon’s platform and fulfillment for your business, you forfeit certain customization options. Amazon will have full control of your product and your customer’s experience. When your product arrives at your customer’s door, it will come in an Amazon box. Key personalization opportunities, packaging, the unboxing experience and your brand will fall to the wayside because Amazon will control all those aspects.
As costly as this can be in the long run, you also couldn’t generate the type of online traffic Amazon does on your own. Amazon captured 42 cents of every dollar spent online in 2017, up from 38 cents last year, and they’re expected to sell 12.6 billion items in 2020. Is the lack of customization worth the opportunity to be included on the largest e-commerce platform in the world?
That’s a question you’ll have to answer for yourself.
The Type of Product You Sell Can Dictate Your Shipping Method
Plenty of shipping services out there can handle everything from small packages up to oversized machinery. Whatever your e-commerce business sells, the size and volume will determine what kind of shipping service you’ll require. If you were to start a furniture business, for example, you’d need to find a logistics provider who could handle large, bulky furniture that’s not easily palletized. This type of commodity could require you to use a third-party logistics (3PL) firm who specializes in full truckload shipments. Pieces of furniture can quickly take up trailer space.
High Shipping Volume Could Lead to Consolidation Discounts
Once your e-commerce business starts to generate consistent shipments, your logistics providers can get into a routine with your orders. These patterns allow them to find carriers who are available when you need them and for better pricing than testing the freight market with a same-day shipment. If you have multiple shipments going to the same destination or the same general area, 3PLs will consolidate those onto one truck, giving you a better price compared to shipping each one separately. Third party logisticians can save e-retailers a lot of money with options like consolidation, storage and warehouse management.
Whether you have an e-commerce business or are looking to start one soon, make sure you have your business strategy tailored to what’s best for your business. There’s no one-size-fits-all solution in e-commerce. However, these logistics and fulfillment details aspiring e-commerce owners need to know will give you a leg up when implementing your business strategy.