With the eCommerce industry growing at a tremendous pace, the underlying logistics behind delivering orders to customers is becoming more complicated. There have been numerous innovations in the eCommerce logistical landscape along with advancement in technological support to meet high demands. Today, online buyers can track their consignment from the date of dispatch until its delivery.
Before the eCommerce industry boomed, retailers sourced products from manufacturers or distributors. However, we now have myriad online shopping stores. Therefore, the intermediaries have ceased to exist. What this means is that deals are now directly done between the supplier and the end-user. Agents, distributors, dealers, and retailers have no role in this direct selling process now.
As businesses are no longer dependent on these intermediaries, eCommerce shipping has become an indispensable part of supply chain management. It has evolved into a highly specialized service.
A report by the World Economic Forum states:
“The logistics environment and its interaction with e‑commerce are complex, with different types of providers and services, competing, and cooperating.”
Logistics includes several processes such as inventory management, warehousing, packaging, labeling, billing, shipping, payment collection, return, and exchange. Besides, logistics also requires accurate knowledge about territories, regulations regarding the movement of goods, and transport laws. The ultimate goal of a logistics unit is to deliver packages much quicker and more carefully.
In this article, we will get into the details of how eCommerce logistics works, the importance of modern logistics, its benefits, and the latest trends.
What is eCommerce logistics?
Ecommerce logistics revolves around the processes involved in storing and shipping inventory for an online store or marketplace. It includes inventory management and the picking, packing, and shipping of online orders.
It begins with moving inventory from the manufacturer and ends when the consignment reaches the customer’s destination. Fulfillment is one of the most important steps in eCommerce logistics. It includes:
i) inventory management
ii) warehousing & storage
iii) order fulfillment (picking, packing, and shipping orders)
The fulfillment of orders placed online by a customer can either be undertaken by the retailer (“in‑house”) or by a third‑party logistics company (3PL) (“out‑sourced”).
Businesses must make sure that they have adequate stock levels in a distribution center close to a customer’s location. If they outsource fulfillment, their 3PL must be competent and capable of fulfilling orders at pace.
A lapse in execution within your supply chain can ultimately ruin the customer experience.
The evolution of eCommerce logistics
Ecommerce logistics evolved in various phases over the years. Given below is a very broad timeline:
1970: different retail stores were replaced and direct deliveries were carried out by suppliers and wholesalers
1980: retailers decided to streamline their store delivery through distribution centers controlled by them
1990: retailers started shipping nonfood products, global sourcing as practice began picking up, allowing different retailers to set up their import and delivery centers and exchange goods
The 2000s: the concept of e-commerce began developing, retailers started developing their e-fulfillment distribution network to meet people’s demand all across the world
The modern logistics chain
As you can see about 30-40 years ago, suppliers and retailers had a relatively straight line between them. However, with the advent of eCommerce and its growth into a worldwide channel, logistics has become much more complex. There are now several working components to ensure products reach customers.
Suppliers have inventories ready to ship to a destination. They manufacture products and ship them to fulfillment or distribution centers once buyers place their purchase orders.
2) Fulfillment centers
Fulfillment centers are large warehouses that store all the inventory products close to the end consumer. As soon as a buyer places an order, it is picked, packed, and shipped here to ensure rapid delivery.
3) Distribution hubs
Large eCommerce retailers keep their products in multiple locations throughout the world for direct-to-consumer (DTC) and B2B orders. Instead of managing your inventory from one location, which can lead to more delayed delivery times and expensive shipping charges, dividing an inventory allows for faster shipping of DTC orders.
You can choose to use a separate facility for B2B orders, which require different fulfillment processes in comparison to DTC orders. The differences involve packaging requirements, warehousing needs, and ultimate shipping destinations and customer types.
4) Sorting facilities
Facilities that sort items are usually for large-scale eCommerce shops that move bulk quantities of many SKUs.
Shipping carriers manage the transportation of products to their end destination. Some of the best carriers are FedEx, UPS, Blue Dart, and DHL and generally transport packages via truck and plane.
Advantages and benefits of modern eCommerce logistics
If you’re starting a new eCommerce business and looking for a shipping platform that can connect you to multiple online channels and courier services, choosing a shipping and logistics aggregator like NimbusPost would be your best bet. We are trusted by over 5000+ global sellers and help eCommerce business owners to focus on their entrepreneurial strategies instead of worrying over shipping and logistics. Here are some of its advantages:
Courier Recommendation Engine
Most eCommerce companies have a tough time trying to pick the right courier partner. Important metrics such as delivery time, freight rate, and customer satisfaction depend on the courier partner you choose. To help you make this decision with accuracy, precision, and ease, NimbusPost utilizes a machine-learning-based tool that recommends the best courier partner for each of your shipments. It takes into account return rates, delivery time, and cost-effectiveness for hassle-free shipping.
Post Shipping Experience
Nurturing a healthy relationship with your customers is essential for your business to evolve and grow. With NimbusPost, you can provide your buyers with a delightful post-purchase experience. You can update your buyers with detailed tracking information, establishing a trusted bond with them where they can rely on your store for future purchases. NimbusPost can also help you –
– send customized tracking pages to customer
– add your brand’s logo and support details to the tracking page
– share best selling product banners with your customers
Return orders can become a nightmarish problem for eCommerce owners if they don’t optimize their logistics with care. NimbusPost’s NDR Management tool manages undelivered shipments with ease. You can now keep a watchful eye on undelivered shipments and also know the reason behind them. Here are some features of our NDR panel:
– reduces the chances of a return shipment.
– reach out to your buyers in real-time
– immediate action by courier agent
– record undelivered order feedback via automated IVR & SMS
With such an automated workflow you can take action for undelivered orders in real-time, and reduce RTO by 25%.
NimbusPost provides the best eCommerce shipping solutions with the lowest shipping rates, widest reach, and professional customer support.