A Complete Guide to E-commerce Logistics

What Is E-commerce Logistics? E-commerce logistics is a complex, multistep process that an e-commerce brand uses to ship an order to the consumer. This article is a comprehensive e-commerce logistics guide that answers important questions. Logistics managers must transform their operations because their roles are critical to e-commerce organizations. Until the customer has received the product, the sale is not complete.

The Difference Between E-commerce and Traditional Logistics

The demands of e-commerce are very different to more traditional sales channels and the standard warehouse and distribution operations are not always set up to deal with e-fulfilment operations. Quite simply, e-fulfilment and e-commerce logistics is different. Operations set up to deal with medium size or bulk orders to retail outlets are suddenly faced with the realisation that the on-line buying habits of the consumer can have a serious impact on the picking and despatch operations.

The nature of the B2C e-commerce model means that the order profiles are likely to change as the B2C orders will be smaller (i.e. fewer items per order) as opposed to the medium or bulk B2B orders. This is further compounded by the increase in returns as the seasoned internet shopper will order many variants (e.g. size or colour) of the same product at the same time safe in the knowledge that they can return the incorrect ones and still receive the one they actually want on the first delivery.

Five Practical Tips for E-Commerce and Logistics

• Establish strict stock control: This is fundamental for Inventory Management Consulting and maintaining high customer service levels.
• Make free and fast shipping a top priority: The standards for e-commerce differ significantly from the standards for more traditional points of sales.
• Offer multiple shipping options: Providing variety helps in E-commerce Performance Optimization.
• Provide shipment tracking: This is essential for transparency and quality assurance.
• Leverage technology to automate documentation processes: Automate anything else that can be automated to improve efficiency.

Warehouse and Fulfilment Strategies

Operating both types of order profiles in the same facility is of course possible, however there are many different opinions on how it should be done. Having visited many warehouse and distribution facilities, we have observed the following strategies:

• Separate Pick Faces: Some companies keep separate pick faces for B2C and B2B orders, albeit for the same products.
• Batch Picking: Other companies change their pick regimes to batch or bulk picking and then finalise orders at a secondary pick location near to the packing benches.
• Outsourcing: A number of businesses outsource their e-fulfilment business as they have acknowledged that it requires a different pick regime and mind set to their traditional business.

Optimal pick-face layouts are more difficult to determine when picking B2C and B2B orders from the same pick locations due to differences in fast/slow movers – extending travel and pick times for e-fulfilment orders.

E-commerce Logistics Trends

Modern e-commerce requires staying ahead of the curve. Key trends currently include:

• IoT: Used for transparency and quality assurance throughout the supply chain.
• Branded shipping experiences: Enhancing customer retention through specialized packaging.
• 3PL services: Leveraging Logistics Outsourcing to handle complex fulfilment needs.
• Sustainability: Focusing on eco-friendly logistics network design.
• Emerging Tech: Blockchain potential, machine learning, and artificial intelligence.

Accounting for the True Costs of Internet Selling

Have the true costs of internet selling actually been accounted for? The e-tailer needs payment systems, administration, customer service personnel, warehousing, and stock management systems to provide the same service as a high street shop. Delivery costs of e-commerce B2C sales are usually a greater proportion of the total sale price due to smaller order sizes. Furthermore, it is not just the direct cost of return transport, but also the indirect costs of receiving and processing a return, carrying out a quality check, and returning the product to the pick face. All of these direct and indirect costs must be built into the total cost model of an e-fulfilment operation.

Key Logistics Services and Consulting

To master these complexities, businesses often utilize professional services:

• Logistics Consultants: Inventory Optimisation and Logistics Network Design.
• Warehouse Consulting: Warehouse Productivity Improvement and Automation and Robotics Design.
• Supply Chain Systems: Transport Management Systems and Demand Planning.