Ecommerce success relies on a few different factors working together. The products that you’re selling need to meet the needs of your customers. The online shopping experience needs to be simple. Alongside those, you need to make sure that your deliveries are reliable, timely, and free from any issues. A lot of ecommerce businesses focus on the first two points without really thinking too deeply about their logistics. As such, they can easily run into problems that lead to not just customs dissatisfaction, but internal disorganisation and skyrocketing costs. Here, we’re going to look at the common logistics problems growing ecommerce businesses face, and the solutions that can help them get over them.
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Inventory Mismanagement
Tracking your inventory as your business grows can become increasingly tough. You’re going to be dealing with a larger volume of products across the board, and likely more varieties of product but, without accurate tracking and inventory management systems, it’s easy to run into issues like stockouts, where customers can’t buy the products they want, leading to lost revenue, or overstocking, meaning that you’re holding onto slower moving items for longer before you make your money back. Many growing brands rely on spreadsheets or disconnected systems, which can quickly lead to errors. Real-time inventory management tools and demand forecasting are vital for managing growing inventory needs.
Inefficient Fulfilment Processes
While you might have been able to handle a handful of orders every day at the very beginning of your business, the longer that you try to DIY your logistics, the greater your chances of slower deliveries and more errors. If you find yourself consistently behind schedule, stressed out, or facing greater levels of customer dissatisfaction due to errors in the delivery process, then it’s time to get in touch with 3PL providers who can handle the whole process for you. Without an optimised workflow that’s ready to handle orders at the scale you’re growing at, you’re not going to be able to keep up with your business, which means you might miss your chance to take it to the next level.
Your Shipping Costs Are Rising Too High
It’s very easy for shipping costs to spiral out of control, especially as your business expands. When you’re dealing with more orders, shipping them at the same cost-per-order can begin to eat into your profit margins much more than they should. Talking ot your logistics providers about their carrier rates, negotiating discounts for a higher volume of orders, and focusing on optimising your packaging to allow more products per delivery can all help you reduce your cost per order. International shipping adds another layer of complexity, with customs fees and variable pricing. If not managed carefully, these costs can significantly reduce your profit margins. Working with specialised regional providers can help you manage those costs. Otherwise, customers will notice these higher shipping costs, which can drive them to your competitors instead.
Losing Inventory Across The Supply Chain
The more complex your logistics grow, the more steps it might take for your products to get from your warehouse to the hands of your customers. This can make it a lot harder to see where your inventory is and how orders are progressing. Implementing a proper tracking and reporting system can allow you much more visibility of the whole supply chain, which can also help you spot issues like delays and bottlenecks that might otherwise go unseen. A lack of visibility means a lack of the necessary insight to make better decisions in how you improve or change your logistics. It also increases the risk of deliveries that straight up go missing, causing customer frustration and direct costs to you.
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Storage Issues
The more that your logistics grow, the more space you’re going to need to handle all of those deliveries, and you might be surprised just how quickly your current space can no longer meet your needs. Unless you’re having your inventory shipped directly from your supplier to your logistics handlers, you’re going to need to consider investing in the necessary warehouse space to house all of your products, as well as the staff and systems to make it as organised as possible. It’s important that you not only have the space to hold your inventory, but the means to find it and ship it quickly when an order comes in.
Increasing Returns And Reverse Logistics
Even if you do as much as you’re able to deliver quality products and make sure that they arrive in customers’ hands on time and in good condition, you’re going to have to inevitably deal with some returns. What’s more, you’re going to have to deal with more as your business grows, and managing these reverse logistics can become trickier over time. Without a clear process, returns can create confusion, delays, and additional costs. Handling refunds, restocking items, and managing customer communication all require time and planning. Providing a streamlined returns system can make sure that customers don’t become overwhelmed when trying to send products back. You might think this lets you hang on to more sales, but the lifeblood of any ecommerce business is not individual sales, but return customers. Even if they’re not satisfied with their last purchase, they’re more likely to come back if you do what you can to rectify the issue.
Evolving Customer Expectations
Ecommerce is a fast-developing space, which not only makes it an exciting opportunity for those looking to start a business, but it can also make it a tricky one to keep up with. Customers get used to standards set by your competitors, in terms of speed, affordability, reliability, tracking, and other tech that allows them more control and visibility of their orders. Meeting the expectations of your customers means working with logistics companies working to modern standards and clear communication of what, precisely, you do and don’t offer. Adapting your delivery strategy as you grow is essential to staying competitive and maintaining good customer relationships.
Never underestimate the importance of reliable, organised, and transparent logistics when it comes to the success of your ecommerce business. As your brand grows, it becomes more and more vital to your operations.
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